Comparison of Positivist and Phenomenological Methods

Comparison of Positivist and Phenomenological Methods Describe, compare, contrast, and critically evaluate the effectiveness of both positivist and phenomenological methodology adopted when studying society. Sociology is the study of human society, including both social action and organisation. Sociologists use scientific research methods and theories, and study social life in a wide variety of settings, this offers not only information but also a distinctive way of looking at the world and the position humans play in it. Whereas most people try to explain events by analyzing the motives of those involved, sociologists encourage a look beyond individual psychology to many recurring attitudes, actions and how these patterns vary across time, cultures and social groups. To look at the different ways people act and behave in society, it has to be seen from a sociological perspective. Within sociology there is no single method, but many. As stated by Haralambos and Holborn (1995) Science appeared to be capable of producing objective knowledge that could be used to solve human problems and increase human productive capacity in an unprecedented way. This assignment will look at the two main me thodologies, used by sociologists, past and present, and compare the effectiveness of the two. When the task of comparing and contrasting the two methodologies of positivism and phenomenology, adopted within the study of society, there are many things that leap to mind: Firstly, there is the factor of time or circa and secondly is the influence of certain acclaimed sociologists within the two different approaches. Methodology within sociology is the study of methods and deals with the philosophical assumptions underlying the research process, using scientific quantitative data collection under those philosophical assumptions. The broad methodology positions, positivism and phenomenology differ hugely. Positivism contains the underlying philosophical assumptions of research in the most pure and applied sciences, physics, chemistry and biology, based on ideas of the objective reality of the physical world, scientific method and empiricism. Just as positivism arose out of rejecting speculation an alternative view has arisen out of rejecting the view that scientific empiricism can be applied to the social world. There is no one philosophical basis, but phenomenology, which can be seen as the basis for what is the assumption that society can only really be understood through personal actions such as language, feelings and emotions. As stated by Kirby, Kidd, Koubel, Barter, Hope, Kirton, Madry, Manning and Triggs, (2000), that although not perfect the link between the methodologies is that the structuralist-minded sociologists tended to adopt a positivist approach and social action based sociologists tend to adopt a phenomenological approach. The positivist versus the phenomenological approach to the study of man and society is considered in terms of one of the major debates in social science research. Many of the founding fathers of sociology such as Marx (1818-1883), Comte (1798-1857) and Durkheim (1858-1917) believed that it would be possible to create a science of society based on the same principles and procedures as natural sciences. Positivist theorists believed that this approach would reveal that the evolution of society followed invariable laws and that it would show that the behaviour of man was governed by principles of cause and effect which are just as invariable as the subject of natural sciences. Kirby et al, (2000) states that positivists believe that only by adopting a position of total objectivity towards the subject matter or phenomena can unbiased knowledge or theories be produced. Comte believed in the hierarchy of science and that each study of science is dependent upon another. His theory ranged from the simplest to the more complex forms of science and that sciences above rely on sciences below stating that sociology was more abstract and difficult than other sciences. Originating from his hierarchy of science, as stated in Haralambos and Holborn, (2004), Comte widely believed that industrialization and the growth of scientific knowledge would lead to secularization, therefore devising his contribution to the study of social dynamics in that, the rule of societies passing through three stages defined by their social relationships. Theological law was a belief in superhuman or divine powers, Metaphysical, a belief in the powers of the individual human mind and the positive law was based on truth produced by collaborative, quantitative and scientific work. An appeal of the positivist approach is that scientific knowledge does not contradict or surprise the ex perience of the everyday world. It argues that factors, which are not directly observable, such as meanings feelings and purposes, are not particularly important and can be misleading, they therefore, form, reliable quantitative data. Phenomenological theorists such as Simmel (1858-1918) and Weber (1864-1920) propose that the consciousness is the proper area of study, for its study will reveal meaning. They seek to sense reality and describe in words rather than numbers, trying to produce convincing descriptions of what they experience rather than explanations and causes. Weber disagreed with Comtes theory, he believed there could be as many sciences as needed, Quantitative and empirical studies cannot tell people what to do, and it is important to go beyond simply recording events and to explain the reasons behind them. When referring to Webers idea of puritanism, a case study in the empirical construction of the protestant ethic, Weber, as cited by Ghosh (2003), clearly states that empirical sources are not tablets of stone, eternally available to the truth seeking historian; rather they have a history of their own. Weber believed that values play a crucial role before during and after research and that social a ction is governed by the dynamic of individual needs. Weber was committed to the study of causality, the probability that an event would be followed by another event not necessarily of a similar nature. In addition to this Weber also analysed the levels to which rationality was becoming institutionally embedded in modern industrialised societies. Marxs view of bureaucracy was according to Weber a form of organisation superior to all others, Weber wrote in one of his many books, that without this form of social technology the industrialised countries could not have reached the wealth and extravagance that they currently enjoy, (Weber, 1928) as cited in Haralambos and Holborn, (2004). He believed that this capacity for social order would lead to the evolution of the iron cage, and as a result, a society that was technically ordered, rigid and dehumanized. As stated by Giddens (1997) Weber sought to understand social change. He was influenced by Marx but was also strongly critical of s ome of Marxs major views, rejected the materialistic conception of history and saw class conflict as less significant than Marx. From a positivist stance, Marx believed that ideas were expressions of public interest and that they served as weapons in the struggle between classes and political parties. Class for Marx, is defined as a social relationship rather than a position or rank in society. Class struggle and owners of production determined economic order. In Marxs view, classes are defined and structured by work, labour, possessions, production, and the class structures of capitalism consisted of class struggle, political power and the development of a classless society. Marxs theory of society consisted of two categories of class and that economic order was determined by the two; Bourgeoisie, the capitalist class, the hierarchy, the wealthy, the employers and the Proletariat, who are the workers or the lower class. His view was that as the bourgeoisie employed the proletariat, who has to fulfill his basic needs, the capitalist class could not exist without them. As cited by Haralambos and Holborn (1995), Marxism has sometimes been regarded as a positivist approach since it can be argued that it sees human behaviour as a reaction to the stimulus of the economic infrastructure. Although Weber agreed with Marx in part, that as methods of the organisation increased efficiency and effectiveness of production, Marxs theory threatened to dehumanise society. Webers theories, stratification and views on economic behaviour were rooted from Marxs view on the economics of a society. Another positivist view came from Emile Durkheim, whose impression of society was of structures that function apart from human purpose and will. While he considered society to be composed of individuals, his theory was that it is not individuals behaviours, thoughts and actions that construct society, but that society has a structure and existence of its own. His thought was, that society was to have developed from traditional to modern society, through the expansion and development of the division of labour, of course, it is individuals who act, but they do not act on a purely individual basis, they have obligations and duties and are strongly influenced by structure, tradition and the roles of our forefathers. Durkheim considered himself with the issue of social order and how modern society holds together, given that society is composed of many individuals each acting in an individual and autonomous manner. Durkheims classic study of suicide, (1970, first published in 1897), as cit ed in Haralambos and Holborn, (2004) is often seen as a model of positivist research and it does indeed follow many of the methodological procedures of positivism. Although supporting the two different methodologies of sociology, Durkheim was heavily influenced by Weber, who defined sociology as the study of social action between individuals. In contrast to Durkheims impression of society and view that society has an existence of its own apart from the individuals in it and so proceeds a proper object of study. As argued by Haralambos and Holborn (1995) where Marx was pessimistic about the division of labour in society, Durkheim was cautiously optimistic. Marx saw the specialised divisions of labour trapping workers in their occupational role, Durkheim saw problems arising from specialisation in industrial society, but believed the promise of the division of labour far outweighed the problems. While Simmel is generally not regarded as being as influential in sociology as were Marx, Weber and Durkheim, Simmels theories, had some similarities to Durkheims theory of problems of individuality and society, Webers dynamic of individual interests and Marxs theory of class structure. Simmel considered society to be an association of free individuals and that society could not be studied in the same way as the physical world for example, sociology is more than the discovery of natural laws that govern human interaction. His theory was that society is made up of the interactions between and among individuals and that, sociologists should study the patterns and forms of these associations rather that look for social laws. By defining sociology in this way, Simmel avoids the conflict about the nature of science whether it should be concerned with timeless, universal laws, instead, there are always multiple ways in which we can look at things. He argued that society was made up of soc ial facts, and these social facts coerce and shape the actions of individuals. He argued that in traditional societies, solidarity binds together individuals in order to allow society to operate. Social facts only come into being in an interaction, and do not exist within an individual consciousness. Durkheim (1970) as cited in Haralambos and Holborn (2004), stated that the determining cause of a social fact should be sought among the social facts preceding it and not among the states of individual consciousness, the causes of variations in suicide rates were to be found in social facts and in society rather than the individual. Therefore, social groups represent. He argued that societies that functioned well were societies that held a consensus sway over individuals; society, therefore, was something outside and inside individuals. As stated by Haralambos and Holborn (1995) to phenomenology, it is impossible to measure objectively any aspect of human behaviour, through language humans distinguish between different types of events, actions, objects and people. The process of categorisation is subjective; it depends upon the opinions of the observer. Statistics are simply the product of the opinions of those who produce them. The distinction between positivist and phenomenological approaches is not as clear-cut as this assignment implies. There is a considerable debate over whether or not a particular theory should be labelled positivist or phenomenological. Often many of the theorists lie somewhere in between, some taking views from either side. Haralambos and Holborn (1995) argue that in terms of sociology, the positivist approach makes the following assumptions; the behaviour of humans, like the behaviour of matter, can be objectively measured, just as the behaviour of matter can be quantified by measures such as weight, temperature and pressure. Methods of objective measurement can be devised for human behaviour, such measurement is essential to explain behaviour. Early Positivists such as Comte, and Durkheim argued that objectivity was attainable by adopting a scientific methodology. Marx also believed that his sociology was objective and scientific, although he saw society very differently. Weber did not think complete value freedom was possible, but he did believe that once a topic for research had been chosen, the researcher could be objective. He argued that sociologists should not make value judgments, that is, they should not state what aspects of society they found desirable or undesirable. It is plainly nonsensical to throw into one big pot labelled sociology all those researches which could have been satisfactorily conducted by national economy, history of civilisation, philosophy, political science, statistics, demography and ethics. That gives us a new name, but no new knowledge. Simmel, G (1858), cited in American Journal of Sociology [online]) (1898) Reference List Ghosh, P, (2003), Max Webers Idea of Puritanism: A Case Study In The Empirical Construction Of The Protestant Ethic, History of European Ideas, [online], 29;2, 183-221, Available at: http://www.sciencedirect.com/science?_ob=ArticleURL_udi=B6V9C-48D2RD7-1_user=10_rdoc=1_fmt=_orig=search_sort=dview=c_acct=C000050221_version=1_urlVersion=0_userid=10md5=10803212fe05d9a06d9a7ce5cfaec919 [Accessed November 21, 2008] Giddens, A, (1997) Sociology, 3rd Edition, Polity Press, Cambridge Haralambos, M, Holborn, M, (1995), Sociology, Themes and Perspectives, 4th Edition, Collins Educational, London Haralambos, M, Holborn, M, (2004), Sociology, Themes and Perspectives, 6th Edition, Collins Educational, London Kirby, M, Kidd, W, Koubel, F, Barter, J, Hope, T, Kirton, A, Madry, N, Manning, P, Triggs, K, (2000), Sociology in Perspective, Heinemann Educational, Oxford Simmel, G (1898) The Persistence of Social Groups, American Journal of Sociology, [online], 5; 3, 662-663. Available at: http://www.brocku.ca/MeadProject/Simmel/Simmel_1897a.html [Accessed November 11th 2008]

A Definition of Audit Independence

A Definition of Audit Independence Independence is fundamentally an attitude of mind for exercise of professional judgment and defined as an abstract concept that is easily subject to misinterpretation. Quality of integrity, objectivity, honesty, and impartiality are included in the concept to characterize independence. Independence is also a basic element to the reliability of auditors reports. However, it does not mean that an auditor must be free of all economic, financial, and other relationships to comply with independence. Two aspects are covered: Independence of mind. It is essential state of mind to enable an auditor to give his opinion or conclusion based on professional judgment without being affected by compromising influences. Independence in appearance. It refers to a perception of a third party regarding the auditors independence. Circumstances and relationships which are incompatible with independence would lead third party and users of financial statement to make conclusion that there is unacceptably high risks of auditors independence has been impaired. An auditor should maintains independence of mind but also portrays to others he is independent in an audit engagement. For this to be achieved, he or she should avoid those threats to independence in order to gain perception as truly independent from third party and users of financial statements in order to them confident that the auditors reports are credible. Definition of Auditors Independence: The concept of auditors independence is an issue that has been debated from many perspectives since the birth of the profession. Salehi1 stated that the auditors independence has been defined by International Auditing Practices Committee of the International Federation of Accountants as The auditor should be straight forward, honest and sincere in his approach to his professional work. He must be fair and must not allow prejudice or bias to override his objectivity. He should maintain an impartial attitude and both be and appear to be free of any interest which might be regarded, whatever its actual effect, as being incompatible with integrity and objectivity. How has the issue of audit independence evolved? During 19th century, the initial concept of audit independence arose fundamentally in British that the primary responsibility of professional accountants and auditors was to take charge and safeguard investments in existing and former colonies of the British Empire by those absentee owners and they could provide professional services to different investor groups. Auditors were strictly forbid from making investment and involving in the business that they audited. The audit independence during this era was at weak level as the scope of professional services could be broad and auditors were allowed to perform bookkeeping and financial statements preparation for the entities they audited. There was an economic shift from capital coming primarily from foreign sources to capital deriving primarily from domestic sources that led to a change in concept of audit independence during the late 19th and early 20th century. This shift related to the emergence of large American corporations and also a change in the understanding of nature and purpose of Business Corporation. During this time, accounting and auditing was essential to valuation of the proprietary interest of the corporation. There was a need to initiate periodic balance sheets to effectively distribute the retained profit to proprietary interest. By this, auditors primary responsibility shift from serving absentee ownership interest to collective proprietary interest instead. Normally, large banks or wealthy investors acted as domestic shareholders to compose collective proprietary interest. However, it tends to be more general public involved in stock ownership. The concept of audit independence was facing another alteration during the New Deal era when Securities Exchange Commissions (SEC) being created. Standards for reporting and auditing have been established by SEC to place effects on audit independence. As a result, primary duty of accountants and auditor shifted to professional standards for preparation and audit of financial statements. During this stage, objectivity and neutrality were essential concept for accountants and auditors in reporting on financial position and operation performance, rather than loyalty to a particular party. Until 1970s, the concept of audit independence has been eroded. Public accounting firms tend to modify objective and neutral focus and advocating clients regarding accounting and auditing matters (non-audit services) at the time FASB established to be the independent accounting authority. With a rapidly growing business environment, large public accounting firm capable to provide wide range of business services to their clients and the revenues derived which outpaced the traditional auditing services fees. Increasing competitive marketplace for auditing services accompanied by complexity of international business practices led some auditors shifted from objective and neutral focus to preferable in becoming trusted advisor of client even though independence issue had been stressed by ASB of AICPA during that period. In the mid- 1980s, internal audit activities were regarded as an opportunity area to be expanded by CPA firms for new and existing clients. However, most firms encountered obstacles in rendering outsourcing services to its clients which were resistance from internal audit departments and concern over independence of audit committee. External auditor rendering consulting services may enhance audit quality because he or she would be provided with considerable knowledge, operations and industry of the audit client. Anandarajan et al.2 stated that The greater the external auditors insight into the client, the better their ability to understand business transactions and identify key audit risks. External auditor has a chance to identify and evaluate the clients business issues since they involved in the day-to-day basis operations of client while they were performing consulting services. This would take advantage for subsequent quality of the audit. C. Richard3 mentioned several ways to enhance auditor independence prior to Sarbanes- Oxley Proposals Legal prohibition of financial interests in client companies. It has been the essential universal auditor independence principle that followed by both the SEC and public accounting profession. Elaboration of the rules and reporting structures have been formulated for professional employees of accounting firms including their direct family members to disclose any type of financial interests. Rotation of audit appointments Sarbanes-Oxley required that individual auditors rotate off a client on periodic basis to reduce the threats to independence to happen. However, it has been objected by auditors by claiming on loss of high start-up cost associated with the initial years of audit if rotation of auditors was being enforced. Peer Review This means reviewing the work of an audit firm by another auditor. It was gradually become common in many countries. An independent auditor-appointing and fee-setting body. This would help to enhance auditors independence judgment and action by reduce the ability of client management in determining the scope of audit and remuneration of auditors. In year 2002, the business failures of several large firms in United States such as Enron, WorldCom and the like led to significant accounting scandals that shock the market. Subsequently, several officials disclosed to the public that they had intentionally misled investors and this had trigger to question the role and integrity and doubt on independence of these companies auditors. The far-reaching legislation resulted from these accounting scandals was the Sarbanes-Oxley Act (SOX) and this SOX also created Public Accounting Oversight Board (PCAOB), a professional body for the purpose of establish standards (auditing, ethical and independence standards) to police the auditors behavior. Strengthened independence rules and placing audit committee to oversee the auditors engagement are covered in the further consequences. The enforcement of SOX had transformed corporate governance in United States and had a profound influence abroad. Auditors independence was also an important concern in SOX. Section 201 list out those prohibit services to be provided by registered auditor to its clients. The list comprised of non-audit services including bookkeeping, financial information systems design and implementation, and valuation services. It is argued that auditor independence was being negatively affected by non-audit fees, supported by Enron and other scandal-ridden companies case. However, it is not guaranteed that prohibition of certain non-audit services will effectively increase auditors independence. Another important event was the independence standards previously establish by the AICPA and SEC through the Independence Standards Board has been recognized by PCAOB. It is under suspicious that whether these rules under SOX enforced were sufficient to meet publics perception on auditors independence. After the enforcement of SOX rules, it is necessary to have a proper reconsideration of the concept of auditor independence. A new concept of auditors independence might arose which in favor of reasserting former objective and neutral concept to accounting profession rather than provide non-audit services to clients. Emergence of ongoing accounting and auditing scandals could be viewed as a strong evidence to prove that independent auditors are not appropriate in providing non-audit services to its clients. But, this issue was not addressed in SOX or PCAOB independent standards. Another issue regarding audit independence was that client management may still hold the ability to influence scope of audit engagement and audit fees. Even though Section 301 of SOX has clearly specified that audit committee directly responsible for the appointment, compensation, and oversight of independent auditors, but there was no specific enforcement mechanism guaranteed that client management will not involved whether directly or indirectly in selection of auditors, determination of scope of audit and audit fees. In order for this new concept of auditors independence to be effective, two propositions are needed to be incorporated: Independent auditors should not subject to provide non-audit services to client. Management should be strongly forbidden by legislation in determining the scope of audit and audit fees to avoid unclear influences that management might exert to auditors. C. Richard3 stated without a transition to this concept, auditor independence standards will most likely be primarily cosmetic and will not provide sufficient assurance that auditors are in fact independent from client management. If this happened, may lead auditors independence appears to be unnecessary and auditing will no longer be trusted by third party and other users of financial statements since it unable to meet public perception on assurance. To create a demand for audit services, auditors must convince the market of their independence and also their competence. It has long been recognized that a reputation for independence is an auditors greatest professional asset and that any negligence on an auditors part will leave them open to severe penalties in the form of, inter alia, a loss of reputation (Owens 1941, Ashley 1942, Johnstone et al. 2001). Reputation serves as a collateral bond for independence, in that the reputation of an auditor found to be less independent than expected will be damaged and the present value of his or her audit services will be reduced (Watts and Zimmerman 1986). Reputation and independence of auditor is much important nowadays if compared to previous year due to many corporation scandals that happens before. There is hard to clarify and determine the auditor independence. There are 2 types of auditor independence which is independence in fact and independence in appearance. Independence in fact exists when the auditor is actually able to maintain an unbiased attitude throughout the audit, whereas independence in appearance is the result of others interpretations of this independence. The issues that happens currently in Asia country about audit independence issues are public feels that the definition of independence is unclear, expectation gap leads to problem of audit independence, offering non audit service will reduce audit independent, the more longer audit tenure, the more audit can resist management pressure, Definition independence is unclear The current issue happen in Asia country about auditor independence is public feel that the meaning, the definition of independence is ambiguity. Public do not know how to identify the independence of especially the new client. This auditor independence has been subject to vigorous debate in recent years due to major corporate collapses and perceived audit failures, such as Cendant, Enron, Global Crossing, WorldCom and Xerox in the United States. Which audit firm should public trusted since Big Five previously Arthur Anderson also having the problem of audit independence? Expectations Gap Other than that, there is a research the auditor independence concept in Taiwan be influence by audit expectations gap literature. The expectations gap indicates differences in views on the nature and role of auditing between client and auditors. There is a different interpretation makes independence concept issues has arise. Financial users expect too much for auditors work, pubic will think that auditors independence has impair due to expectation gap. To solve this problem, to rebuild the trust of public on the issues of audit independence, a number of local and international independence pronouncements and regulations have been revised and reissued. Non Audit Services (NAS) There is a research shows that there is a significant negative relation between non audit services and the extent of client agreement with the auditor over financial reporting issues. Produce non-audit services to client will reduce audit independence. The ability of the auditors to resist client management pressure in auditor-client negotiation over financial reporting issues is important to investigate because it concerns over the issues audit quality and the effectiveness of auditors and will reduce management discretion if auditor do not have ability to resist client management pressure. The ability of the auditor to resist client management pressure in negotiations over financial reporting issues is likely to be weaker when the extent of NAS provided to a client increases. But the ability of the auditor to resist client management pressures in negotiations over financial reporting issues is likely to be increasing as auditor tenure increases. When requiring auditing in NAS, clients are less likely to agree with a Big 5 auditor, but are more likely to agree with auditors perceived by industry specialists. Because of specialist has more greater knowledge of the clients industry, specialists should have greater ability to resist client management pressure about financial reporting issues Auditor independence may be impaired when auditors pursue economic self-gain, instead of serving the public interest during auditor-client negotiation. Audit fees The current study uses the extent of non-audit services (NAS) measured as a percentage of non-audit fees over total fees received from the client, because non-audit fees are increasing and are often significantly higher than audit fees and this has become the major source of revenue for most large audit firms. This argument implies that the auditors independence may be impaired when the auditor and client negotiate issues over financial statement reporting, and thus reduce the relative power of the auditor to resist client management pressure because of the auditors dependence on NAS services fees received from the client. The business community countered that annual audit fees would be increased substantially as a result of the minimum audit fee schedule especially for the small companies. They also charged that a minimum fee structure to the client which it would disagree with the principle of pricing based on free competition. Therefore, some large or more efficient firms which would not allowed charging less compared with other small audit firm. Code of Ethics for Professional Accountants and the EFAA (1998) suggest that client size which is measured from size of fees could raise doubts as to independence, but do not state what constitutes an unacceptable proportion of total fees. However, the EFAA clearly states that, the total fee from one client should not exceed a certain percentage of the total turnover of the audit firm. In Malaysia, Noordin (1990) expresses his concern that a code of ethics should provide guidance to limit over-dependence on one client for revenue. The ICAEW has ruled that the size of audit fees of a major client should not exceed 15 per cent of total fees to avoid impairment of auditor independence. This 15 per cent criterion has also been the level generally used in Australia at which auditors have to consider their independent position and there is even a suggestion that the 15 per cent is too low. The Cohen Commission (AICPA, 1978) directed attention to the importance of size of audit fees as one of the crucial independence-related issues. Burton and Fairfield (1982) point out that there may be a close linkage between management assurance service and size of audit fees. As the provision of management assurance service increases, the auditor is likely to be more dependent on the client due to the size of the fees generated. It also seems plausible that smaller audit firms will be more dependent on the client if the size of audit fees generated is a significant proportion of its overall revenue. Size of audit firm and the level of competition in the audit services market Further, in a highly competitive environment, the auditor is also perceived to be less independent due to the increased likelihood of losing a client and the revenue the client generates. Thus, the adverse effects of MAS, the size of the audit firm and competition on a third partys problem of auditor independence actually arise because of the linkage of these variables to audit fees. Basically, a positive relationship means that the larger the audit firm size, the greater the auditors independence. They prove that large firms are more resistant to client pressures, thus maintaining higher audit independence. In fact, it has been argued that large firms, due to their very size, may be more able and motivated to provide better audits. However, as pointed out by Goldman and Barlev (1974), one should not conclude that large CPA firms are immune to pressures from their clients. Competition among the offices of some large firms for clients may be as great as the competition among small, independent CPA firms. More to the point, the few court cases which challenge the assumption that CPA firms acted independently indicate that the use of a large CPA firm is no guarantee of its ability to resist pressures from clients, as happened with Arthur Andersen and Enron. Tenure of an audit firm An audit firms tenure, which is the length of time it has been filling the audit needs of a given client, has been mentioned as having an influence on the risk of losing an auditors independence. Most writers, who discuss the relationship between tenure and audit independence, support this view. A long association between a corporation and an accounting firm may lead to such close identification of the accounting firm with the interests of its clients management that truly independent action by the accounting firm becomes difficult. Some critics invoke the vested interest argument to support the assertion that auditors might compromise their independence to gain continuing audit engagements, the prospect of raising audit fees if the client firm expands, and opportunities of providing non-audit services later. Example, Enron and Arthur Anderson has associate for 15 years and does not change any other audit firm. In my opinion, the definition of auditors independence is very subjective until today. This is no absolute answer to justify the issue. However, we, as a human able to do are to rectify and improve the standard and regulation to solve the current issue. The standard and regulation are created by us and as a human is imperfect at everything. Sometimes we created the thing and did not consider the further weaknesses. We need to keep improve and rectify it while we face the cases and issues. A country used few hundred years to create and revise a better constitution. In addition, the auditing standard only used few decades to create the act and policy. We need more time to revise it to be a better regulation. Besides, the scandal or cases happened like Enron would scandalize the accounting and corporate level, but it also leave an opportunity to the standard board to revise and restrict the standard. Like the common law of the U.K., that is a lot of cases behind the law could guide the person to make a justice or correct judgment. The cases like Enron could be guidance for accounting and auditing standard board like Sarbanes-Oxley Act and Audit Oversight Board. Sarbanes Oxley Act was started to more emphasize the auditors independence and the occurrence of Audit Oversight Board was established to oversee the performance of audit team and audit committee. However, sometimes the constitution and standard board are intentionally to show themselves have perform their responsibility and task instead of truly rectify the problem. The standard is like a pendulum. The best of the standard is the middle of pendulum. Sometimes a case happened and the pendulum is out of the middle, may be moved a bit to the left side. But the pendulum was shaken by the constitution and standard board compel to push it to the right side instead of push it back to the middle. Their action was more to prove themselves have performed their responsibility to get the confident from the audience. I f a case happened again, they would push it to the left side. Besides, the person of the constitution and standard board is being paid the high salary by government or sponsor. They need to perform something to prove their responsibility to continue to hold his or her position inside the organization and get the pay rather than rectifies the issue. As an example, the Sarbanes-Oxley Act had restricted the audit firms need to rotate the clients every certain period. It could increase the cost for auditors to start-up the new clients (Baker, 2005). Furthermore, the ICAEW has ruled that the size of audit fees of a major client should not exceed 15 per cent of total fees to avoid impairment of auditor independence (Noordin, 1990). This enforcement is to reduce the risk of auditors independence issue but it would restrict the revenue of the audit firms. Although audit firms are providing the professional services, it is still a profit-oriented firm. The middle of pendulum is the standard could maintain auditors independence and audit firms profit, but the revision of standard is already pushed the pendulum from left side to the right side or vice versa. Besides, the expectation gap between independence of auditors with financial report users is still occurring until today. This issue is unavoidable because the perception of audit incentive between auditors with financial report users is different. The perception from shareholders is they expect the auditors could give an assurance to the financial statements which is issued by the management. The perception from auditors is they provide the audit service to the client and the management would pay the audit fees. The audit fees are one of the issue could influence the auditors independence. This occur the conflict of interest between the auditors, shareholders and management. Although the auditor is independent, the financial reports users are always believe the unqualified audit report and invest to the company. However, the unqualified audit report is not absolutely eliminated the risk and fraud of the company, especially the inherent risk likes going concern issue. The auditors ar e difficult to justify the going concern issue in the audit report because the auditors are difficult to know the internal information from management. The auditors only can provide the reasonable assurance to the clients financial statements. This is mean the auditors does not guarantee or confirm the financial statements are true and fair view and they only can provide the audit opinion based on the information from management assertion. Although this kind of clarification is stated in audit report, it is still a lot of financial report users believe the auditors could eliminate the fraud. If the company is collapsed, the shareholders would directly think that is the auditors fault and they are not independent. Furthermore, the accounting scandal like Enron already worsened the confidence of financial report users toward the auditor independence and audit report. The expectation gap to auditor independence become larger because the failure of Arthur Anderson. The audit fees are the biggest challenge to the auditors independence. In the degree of professional ethic, the auditors should provide the professional audit service as primarily objective of the firms rather than profit orientation. The professional behaviour included independence, honest, competent and others. However, it is difficult for auditors to follow this behaviour because the nature of business. The audit firms could not survive without the profit. With the fierce competition in auditing, the auditors would intend to fulfil the client request to avoid losing a client and getting a better audit fees. The non-audit service and management audit service are one of the solutions to get a higher audit fees. These kinds of extra services could maintain the client relationship with the audit firms. Unfortunately, the accounting scandals and the restriction for audit independence decrease the profitability of audit firms. The competition becomes fiercer and the independence of audi tors is weakened. Besides, the size and tenure of the audit firms could affect the auditors independence. The larger firms could have the larger tenure and resistance to the management influence to the auditors independence (Goldman and Barlev, 1974). Like Big 4, they always serve the bigger clients than the smaller audit firms, they seem like have more authority to negotiate the audit engagement with the clients. The losses of some clients would not strongly affect the total revenue of the audit firms, but for the smaller audit firms are vice versa. The proportion of total fees to the revenue would strongly influence the audit independence (EFAA, 1998). The smaller audit firms have the greater proportion of total fees to the revenue, but it is still have some exemption cases like Enron and WorldCom. Therefore, according to the restriction for auditors independence from Sarbanes-Oxley Act, PCAOB and ICAEW, the smaller audit firms have the greater possibility to influence by the clie nt in term of audit independence. According to the statements above, it have many issues could affect and weaken the audit independence. However, the audit independence would not influence the demand of the auditing. The auditors independence only strengthens the reputation of the audit firms and has a competitive advantage in the audit market. The financial report users would not invest to a company that is not audited by the auditors. The agency theory could prove that the demand of audit is still necessary to the shareholders. The shareholders invest to a company and hire the employees to manage the operation and prepare the financial statements. The management would hire the auditors to issue an audit report to verify the financial statements. The information asymmetry and conflict of interest could happen between the shareholders and management. The shareholders invest a company is to get the return of their investment, but for the management is to get the higher salary. These kinds of incentives are the main is sue to the conflict of interest and information asymmetry. Therefore, the audit is necessary to reduce the information asymmetry and conflict of interest between them. Furthermore, some of the countries do not state the mandatory regulation that the companies financial statements must be audited and issued an audit report by the auditors. The shareholders mostly would request the management to hire the auditors to audit the financial statement and issue an audit report because they know the importance of auditing for their company. Moreover, the audit independence is strongly depending to the both auditors personality and management behaviour. The professional ethic and monetary incentive are the intersection between auditors and management. One of the weaknesses is the standards like Sarbanes-Oxley Act only emphasize the restriction of auditors independence and it does not emphasize the management interruption and influence to the auditors. Although an auditor has a strong independence but it could influenced by the management in term of monetary benefit to the auditor and his firm. Therefore, the current auditing standards should revise and more specify the both regulation of auditors and management to restrict the audit engagement. It seem like the auditing standards have a lot of the flaw in the current regulation, but it is the normal phenomena because the standard is imperfect same like the human. This is the reason for us to keep improve and revise the standard to become better and better. Besides, the standard is necessary in auditing because it is the guidance to the auditors to perform their competent task and provide the independent audit opinion. Although the standard is impossible to absolutely eliminate the fraud and the failure of audit independence, it could minimize the possibility and the frequency to happen the issues or cases like Enron and WorldCom. Hopefully the further exploration and rectification by standard board could improve the auditing standard and recover the confidence to the audit independence from the public.

Notes of a Native Son Essay -- James Baldwin

Everyone Likes a Good Story By nature, human beings like stories. Sea captains tell of ferocious storms, travelers describe exotic places, friends recall good times spent together, and people listen. Thoughts are a different issue- fewer people will listen because there is simply less to get excited about, especially if the listener can?t relate. James Baldwin, author of many novels and essays, including ?Notes of a Native Son,? has many thoughts to share, and keeps the reader interested while he shares them. Baldwin carries the reader through ?Notes? by telling stories of his own life, and shares his thoughts about being a black man along the way. Baldwin?s use of stories not only keeps the reader interested in the essay, but also lets the reader know where Baldwin is coming from, which makes his points much more understandable. ?Notes? is an essay centered on the death and funeral of Baldwin?s father in 1943, but most of the points Baldwin makes throughout the essay are about being a black man living in the United States during this time, when racial tensions were very strong. In ?Notes,? Baldwin gives the reader first hand accounts of these tensions, including one time he was almost killed. Baldwin had been living in New Jersey for a year, where he ?learned ? that to be Negro meant, precisely, that one ? was simply at the mercy of the reflexes the color of one?s skin caused in other people? (68). It was in New Jersey that Baldwin truly learned how white people mistreated black people. On his last night there, he went to a movie with a white friend, and afterwards tried to order some food at a diner. When he was told, ?We don?t serve Negroes here,? (70) his pent up rage took over and he returned to the street... ...anged from disliking him to wishing he were still around to help him with the problems of white treatment of blacks he was just now realizing existed. Although his father warned him of these problems, Baldwin had to experience them to believe him. Because the reader cannot experience many of the events that led to Baldwin?s current beliefs, his first hand accounts are the next best thing. These stories make Baldwin?s points more credible in the reader?s mind, just as his father?s points became more credible in Baldwin?s mind after he experienced what his father was warning him about first hand. This credibility from experience is how Baldwin reaches us in the same way his father eventually reached him. Works Cited Baldwin, James. ?Notes of a Native Son.? 1955. James Baldwin: Collected Essays. Ed. Toni Morrison. New York: Library of America, 1998. 63-84.

Racism: Similarities and Differences In Two Essays -- Discrimination,

In the two essays, â€Å"Just Walk on By: A Black Man Ponders His Power to Alter Public Space† by Brent Staples and â€Å"I’m Not Racist But†¦Ã¢â‚¬  by Neil Bissoondath, there are both differences and similarities. The two authors differ in their opinion on the causes of racism and life experiences involving racism, but are similar in regards to the use of stereotypes in the world In Brent Staples’ opinion, causes of racism are derived from fear and the insufficient knowledge that a person might have about another that may cause them to be racist. In his piece, he writes, â€Å"Another time I was on assignment for a local paper and killing time before an interview. I entered a jewellery store on the city’s affluent Near North Side. The proprietor excused herself and returned with an enormous red Doberman pinscher straining at the end of the leash. She stood, the dog extended toward me, silent to my questions, her eyes bulging nearly out of her head. I took a cursory look around, nodded, and bade her good night.† (Staples 227) This quote shows that the woman that owned the jewellery store was afraid that she might get robbed by Staples and therefore acted by protecting herself with her vicious dog, with the intention to scare away the â€Å"robber†, whom she believed to be Brent Staples. She assumed that because she was in an affluent neighbourhood and because Brent Staples was black, he was there with the intention to rob her rather than the true reason, which was to kill some time prior to his next interview. She showed prejudice and racism towards Staples because of she was afraid of his skin colour and did not have true information about him. Neil Bissoondath differs in his definition of racism. He writes that the cause of racism derives fr... ... became afraid and tried to get away from him. (Staples 224) In Neil Bissoondath’s essay, we see an example with the mover complaining about a Chinese driver he encountered. He said, â€Å"I’m not racist, but the Chinese are the worst drivers on the road.† (Bissoondath 271) The accusation that the mover made was a stereotype which exists about the Chinese, in general, because of the shape of their eyes because of their ethnicity. Their eye sight is not impaired in any way because of the shape of their eyes, but because they are different and people are afraid of them, they are made fun of because they are different. In regards to racism, Brent Staples and Neil Bissoondath may have different view points about its causes and by their life experiences involving racism, but they have similar views on the use of stereotypes and how they affect the races they pertain to.

Appalachian Stereotypes Essay -- Appalachia

"Excuse me miss, but you have the cutest little accent," the pizza delivery guy said. "Well, thank you," I replied. "If you don't mind me asking, where are you from? I know that you aren't from around this area with an accent like that." "I am from a little town called Hazard," I replied reluctantly, realizing exactly where this conversation was headed. "Oh, is that where the Dukes of Hazzard are from?" he asks chuckling. "No, that place is Hazzard, Georgia. I live in a little town in southeastern Kentucky." "I bet you all have a lot of barefoot, pregnant people there don't you?" he asks with a discriminating smile. "Well actually we don...." "Huh, I bet you all don't even have paved roads or indoor plumbing," he persisted. "You know what? I don't feel very hungry anymore. Why don't you take that pizza back?" I asked. "Oh, miss, I was just joking with you." This conversation actually took place during my first semester of college. However, being quite accustomed to the questions that I am frequently asked about the place I call home, this conversation somehow made me more upset than usual. This conversation made me realize just how blind society can be towards other groups in society. Different stereotypes are placed on groups for various reasons-race, sex, occupations, and geographical locations-just to name a few. The last of these four different classifications is the one that distinguishes me from most of society. Growing up in Appalachia has made me a minority (different from the rest of society), and also plagued me with many stereotypes. Everyone in society has heard the stereotypes. However, I would like to focus on the how's and why's of them. How they came to be. Why society does perceive... ...ut trying to find your place within society as a minority is even harder. When you go for a job interview and see the person you are being interviewed by shake their head when they hear your accent, you know that you are in trouble. It's the education that is lacking in America. We are known to be this great melting pot. But it isn't until the stereotypes that plague so many Americans come to an end, that we will truly be united as one. Works Cited Asfahani, Magdoline. "Time to Look and Listen." Newsweek Dec. 1996: 18. Billings, Dwight B. "The Road to Poverty: The Making of Wealth and Hardship in Appalachia." Booklist 36 (1999): 38. Norman, Gurney. Kinfolks: The Wilgus Stories. Frankfort: Gnomom Press, 1977. Waller, Altina. "Two Words in the Tennessee Mountains: Exploring the Origins of Appalachian Stereotypes." Journal of Social History 32 (1999): 963.

Nintendo Case

1. What factors do you think enabled Sega to break Nintendo’s near monopoly of the U. S. video game console market in the late 1980s? There are a few different factors that allowed Sega to break Nintendo’s near monopoly of the U. S. video game console market. First, the introduction of a 16-bit system was huge. This was double the original 8-bit systems that were out and consumers were anxious to try it because of the enhanced graphics.Second, Sega made their new system backward compatible with its 8-big Master System games meaning that anyone who already owned these games could play them on the new system as well as any of the new games that were released. Sega also produced their games in-house which saved money. They focused their attention on increasing unit sales to drive game sales instead of focusing on making a large profit on consoles.The combination of in-house games and less focus on consoles allowed them to have over four times the amount of games as Nintend o by the end of 1991 and people ultimately flocked to where the games where. 2. Why did Nintendo choose to not make its video game consoles backward compatible? What were the advantages and disadvantages of this strategy? Nintendo chose to not make its video game consoles backward compatible because this meant that consumers would have to spend money on a new console as well as new games and thus create more revenue.The advantages to this were that they could possibly make a lot more money because of the necessity to sell new games with new systems. The disadvantages is that many people were not interested in having to spend extra money on new games if they were able to purchase a new Sega console that allowed them to use old games as well as new ones. This lead to Sega’s ability to surpass Nintendo in sales. 3. What strengths and weaknesses did Sony have when it entered the video game market in 1995?When Sony entered the video game market in 1995, it was one of the first 32- bit systems, and it had a decent amount of developer support. Although Sony did not have much of an image in the video game market, they did have a huge brand loyalty in other consumer electronics making it fairly easy to gain a following. Because of their previous success in the electronic market, many developers were excited to jump on the bandwagon to develop games for Sony which enabled them to have 800 game titles by the end of 2000. 4.What strengths and weaknesses did Microsoft have when it entered the video game market in 2001? When Microsoft entered the video game market in 2001, they had the advantage of already having some experience in the online gaming world because of the line of PC-based computer games they had already produced. One downfall they did face however was a lack of experience in the arcade environment that Sega and Nintendo both had by this point. A major strength that the Xbox focused on was having more power than the PlayStation2 by offering more memory a nd a faster processor.One other huge advantage that Microsoft had was the price point they offered the Xbox at originally. They marketed it at $299 which was significantly less than its actual production costs, and also less than competitor’s consoles. They also had the advantage of being able to spend $500 million on advertising which is more than they had ever spent on any advertising campaign, and more than other companies of its type could spend. Lastly, they planned to produce 30-40 percent of their games in-house to save on licensing and external costs.5. Comparing the deployment strategies used by the firms in each of the generations, can you identify any timing, licensing, pricing, marketing, or distribution strategies that appear to have influenced firms’ success and failure in the video game industry? Atari took numerous measures to make sure that only authorized games could be played on their consoles which were a main reason for their huge success. Nintendo and Sega spent $15 million in advertising and promoting the new systems.Nintendo made games for in-house systems as well as licensed third-party developers through strict licensing policies, and they also restricted the volume and pricing of the consoles which made the company very profitable. Sega mainly produced games in-house which allowed them to drive game sales and software developer royalties, pushing them ahead of Nintendo. Philips introduced the most expensive console to date starting at $799 which ultimately hurt their sales. They had to decrease the price to under $500, but it was too late. They would not disclose technical information about their system making software development difficult.Because of these strategies they did not last long on the market. When Sony entered the market, they entered relying on their brand image to support them and getting support from numerous game developers. Later, Sega launched the Dreamcast around the same time that Sony launched the PlayStation2. Sega got a head start on sales by launching around the holidays, but still did not hit high sales because of the price point. Even though they ended up dropping the price, Sony’s launch of the PlayStation2 only a few months later crushed any hope for the Dreamcast due to its 128-bit system as opposed to the traditional 32-bit.Nintendo decided to wait on the release of their 128-bit system because they did not offer a backward compatible system like Sony and did not want PlayStation2 sales to hurt the release of the GameCube. Although they targeted different demographics, they wanted to be sure the launch was successful. Microsoft was also launching the Xbox around the same time. They chose to launch it at an extremely low price point that was actually below the cost of production to make sure it hit the market hard. They also chose to launch around the holiday season to get as many initial sales as possible.

Pinay Ako

Pinay Ako â€Å"MANILA, Philippines- The inability of the Philippine economy to produce high-paying  jobs especially for women has pushed Filipinos to marry foreigners as a way to provide for their families, the study Country Gender Assessment by regional lender Asian Development Bank said. † 1 The research that was conducted last 2009 showed an estimate of 300,000 Filipinos of whom 92% are women, are married to foreigners mainly from United States, Japan, Canada, the United Kingdom and South Korea.Pinay ako (translated as I am a Filipina) and I dislike the fact that we are well-known to the world to be gold-diggers –yes, that is how they call us. I never planned nor wanted to be one of them. I remember going to a church that does not support the trending 18-year-old-pinay-marrying-80-year-old-kano2. Unexpectedly, I met Jaimee, 20. My parents and relatives were against us. It is because aside from being too young, Jaimee is a foreigner from Kansas, USA.We have been th rough a lot of troubles and we have prayed and cried so many times to fight for the love. I guess it is true that things that are meant to be will always be. The more they pulled us away from each other, the more we got closer. He became my husband after a year. I am going to be different among typical Filipinas. I have always been ambitious and I think I will always be. Jaimee told me that this is one of the traits that he liked the most in me. If truth to be told, before I met him I never wished for marriage.I wanted to be independent and free. When I was still at university my primary goal was a booming career. I am more of a career woman. I love business. I love office. I actually worked in our family’s small factory and did college at the same time. When I married Jaimee I got new goals in life. First is my promise to be the best wife to him and the best mother to our future children. Second is to make a difference. I am going to be different among typical Filipinas. I a m going to take a stand and become a model and inspiration.