International Financial Reporting Standards Impact

International Financial Reporting Standards Impact 1. BACKGROUND OF THE STUDY The adoption rate of International Financial Reporting Standards (IFRS) has been on the ascendency since its inception in 1973. The number of countries that have adopted IFRS as a basis for financial reporting are more than hundred with others agreeing to converge or adopt it by 2011 (Deloitte, 2008). The need for transparency and comparability of financial statement across countries has increased the desire to adopt a single set of global financial accounting reporting standards (IFRS Insight: IASplus, 2008). Trade liberalisation and globalisation of capital markets have given further impetus towards the adoption of IFRS as a single set of high quality globally accepted accounting and reporting standards as against national accounting standards. The contributions of high quality financial reporting systems in national jurisdictions that experience high economic growth, stable fiscal and monetary systems and access to international investment funds cannot be overemphasised (Wong, 200 4). The need to ensure high quality reporting has forced both developed and emerging capital markets to adopt or converge with IFRS, their national accounting standards. Emerging Capital Markets (ECMs), which constitute a significant part of the global financial market, compete with their developed counterparts for investment funds due to globalization of businesses and integration of capital markets. This exposes the financial reporting information in ECMs to international scrutiny. It has been suggested that ECMs ‘lag behind the advanced capital markets in terms of adequacy and reliability of information disclose in annual reports (Ali et al, 2004). The perceived low quality of financial reporting inhibits the growth of ECMs due to its ability to erode the confidence of investors (Enthoven, 1981) and can lower productivity in the economy. Sutton (1997) asserts that a high level of accountability and transparency in corporate dealings increases the confidence of investors in capital markets. It is imperative that high quality financial reporting must be provided to investors to reduce moral hazards as a result of the agency problems created by the separation of ownership from control. Bekaoui (1999) suggests that the adoption of IFRS is the only way to trust accounting information from developing countries. Some ECMs have adopted IFRS to portray that they are following internationally best practice of financial reporting and to take advantage of the worlds investment funds. However, IFRS which is believed to have been developed for the advanced capital markets may not be an ideal accounting standards for ECMs which are made up of small, medium and sometimes family-owned businesses. Nobes (1998) suggests that due to the nature and characteristics of firms in developing/emerging economies, â€Å"the full panoply of the rules of IASs may seem unduly complex; and the resulting financial statements unduly detailed and expensive†. Choi and Mueller (1984) and Belkaoui (2004) support the suggestion of Nobes (1998). In spite of these challenges many countries in emerging economies have allowed their companies to report on the basis of IFRS either mandatorily or volu ntarily. Mandatory adoption of IAS/IFRS have the tendency to deprive firms the opportunity to choose accounting standards that reflect their information needs and the nature of their business. It has been suggested that IFRS adoption is costly but beneficial and at the same time poses challenges to companies (e.g.El-Gazzar, 1999; Jermakowicz, 2004; Barth et al, 2005; Daske and Gebhardt, 2006; Jermakowicz and Gornik-Tomaszewski, 2006; Daske et al, 2007; Tyrall et al, 2007; Hail et al, 2009). Ball (2001) suggests that companies will experience the impact of IFRS adoption differently due to different regulatory framework and institutional factors across different countries. Research into the costs, benefits and challenges of IFRS adoption to ECMs in sub-Saharan Africa, is non-existent to the best knowledge of this researcher. The adoption of IFRS in Ghana might challenge its neighbours to also follow suit. Therefore, research into the cost and benefits and implementation challenges is needed to guide other countries on the decision whether to adopt IFRS for financial reporting. It is in this light that this study is being undertaken. 1.2 STATEMENT OF THE PROBLEM The adoption rate of IAS/IFRS has been on the ascendency since its inception in 1973 (IASB.org, 2004). Capital Markets have been forced to adopt IAS/IFRS by the World Bank, International Organisation of Securities Commissions (IOSCO) and World Trade Organisation (WTO), THE European Union (EU) and the International federation of Accountants (IFAC) due to globalization of trade and liberalization of capital markets. The Institute of Chartered Accountants (Ghana) is the body responsible for the issuance of accounting standards in Ghana. Prior to the mandatory adoption of IAS/IFRS 2007, two sets of accounting standards were in use in Ghana; the Ghana Accounting Standards (GAS) issued by the Ghana National Accounting Standards Board(GNASB), and the International Accounting Standards (IAS/IFRS). The Ghana Accounting Standards were adaptation of the International Accounting Standards. Ghana, being a member of the International Federation of Accountants (IFAC), allowed companies to issue financial report based on International Accounting Standards. The credibility and quality of financial reporting in emerging capital market have not been able to match the high standards of reporting in developed capital market and Ghana, an emerging economy, is no exception. In 2004, the World Bank commissioned a report into accounting and auditing in Ghana. The report painted a gloomy picture of financial reporting and auditing in Ghana. The World Bank (ROSC-Ghana, 2004, p1) noted that; â€Å"The accounting and auditing practices in Ghana suffer from institutional weaknesses in regulation, compliance and enforcement of standards and rules. Various weaknesses were indentified in the laws and regulation governing financial reporting†. The report observed an inadequate compliance with the Ghana Accounting Standards and also made mention of the fact that some companies claim to comply with the International Accounting Standards in their annual reports but fail to do so. Consequently, the ICA (GHANA) in January 2007 adopted IFRS as the basis for financial reporting for all listed companies beginning 31st December 2007 due to the recommendation made by the World Bank. However, first time IAS/IFRS reporting date for all companies was extended to 2008 due to companies unpreparedness to migrate from Ghana Accounting standards to international standards. In spite of the world-wide acceptance of IAS/IFRS for financial reporting, the jury is still out about the costs and benefits of IFRS implementation to listed companies that adopt IAS/IFRS either voluntary or mandatory (e.g. El-Gazzar et al, 1990; Jermakowicz, 2004; Hoogendoorn, 2006; Jermakowicz and Gomik-Tomaszewski, 2006; Daske et al, 2007; Hail et al, 2009). Generally, little empirical evidence has been provided on whether the costs of IAS/IFRS adoption outweigh the benefits. Specifically, literature on the costs and benefits of IAS/IFRS implementation to listed companies in ECMs in Africa is limited. This study seeks to investigate out the costs and benefits of IFRS adoption to listed companies in Ghana. 1.3 RESEARCH OBJECTIVES AND RESEARCH QUESTIONS Ghana, in a bid to develop its capital markets, established the Ghana Stock Exchange (GSE) in 1989. The GSE became operational in 1990. Currently, there are thirty-four listed companies in Ghana. The adoption of IFRS for financial reporting became mandatory in Ghana after its official launch in 2007 by the Minister of Finance and Economic Planning. However, listed companies were given additional year to fully implement IFRS. These events provide the opportunity to access the impact of IFRS adoption on listed companies in Ghana. The main purpose of the study is to access the costs and benefits of IFRS adoption to listed companies. Primarily, the issue focused on are costs, benefits, and implementation challenges to listed companies in Ghana. The specific research questions pursued in this study are follows: What are the benefits of IFRS adoption to companies in Ghana? What are the costs of implementing IFRS? What challenges do companies in emerging capital markets face as results of IFRS adoption? What are the effects of retrospective application of IFRS (IFRS1) on financial prior periods financial statements? 1.4 METHODOLOGY Two research techniques are used to collect data on the cost, benefits and IFRS implementation challenges. Interviews and content analysis of some selected annual reports are used in this study. The interviews are used to ascertain the opinions on the costs, benefits and implementation challenges of IFRS adoption from ( ) finance directors/chief finance officers/ finance managers whose firms are all listed in Ghana. Interviews were conducted with the Big 4+1 auditing firms in Ghana. These audit firms provide audit and other accountancy services to about 95 % of the listed companies in Ghana. The interviews with auditors were necessary to seek additional insight and to validate the results of the interviews conducted with FD/CFO/FM. 1.5 CONTRIBUTION OF THE STUDY This study is undertaken bearing in mind the following contributions it intends to achieve: To the best knowledge of this researcher, this study is the first of its kind in Sub-Saharan Africa and could inform policy makers in other ECMs about the costs, benefits and implementation challenges when companies are forced to adoption IFRS as a bases of financial reporting. The study is of tremendous use to the International Accounting Standards Board (IASB) to evaluate the costs and benefits of its standards to companies and the implementation challenges to take steps to reduce the costs and challenges and improves on the benefits. This will help the IASB to achieve its aim of standardisation of financial reporting around the globe. The study could also help inform companies worldwide which decide to adopt IFRS voluntarily about the costs, benefits and implementation challenges before venturing into such initiative. 1.6 ORGANISATION OF THE STUDY This study has been structured into six chapters. The content of each chapter is detailed below: CHAPTER ONE: INTRODUCTION The background of the study, which comprises the introduction, and the statement of the problem are stated. The appropriate research objectives and specific research questions used to achieve the objectives are specified. The contributions of the study are expressed. The chapter ends with the organization of the entire study. CHAPTER TWO: EMERGING CAPITAL MARKETS AND FINANCIAL REPORTING ENVIRONMENT IN GHANA This chapter starts with the discussion of emerging capital markets. Land and people of Ghana, the economy of Ghana, forms of business ownership, the evolution and the role of the Ghana Stock Exchange, and sources of financial reporting regulation in Ghana are covered in this chapter. The chapter ends with the summary of issues covered in the chapter. CHAPTER THREE: LITERATURE REVIEW This chapter discusses the role of capital markets, the importance of financial reporting in capital markets. The role of listed companies in promoting financial reporting, the history of the International Accounting Standards, recent trends towards worldwide adoption of IFRS, and the importance of IFRS adoption, prior empirical research, and gaps in the literature are covered under this chapter. All these are studied to put the topic in context. The chapter ends with a summary of the issues discussed. CHAPTER FOUR: METHODOLOGY The methods and techniques used to collect the data and their advantages and limitations are discussed. The issues studied in this chapter are: justification for the choice of Ghana, definition of the period studied, profiles of companies and research instruments. The primary data collected through questionnaire and interviews are quantified using descriptive statistics. The chapter ends with the summary of activities undertaken. CHAPTER FIVE: FINDINGS This chapter analyses and discusses the results obtained from the descriptive statistics conducted in previous chapter. CHAPTER SIX: CONCLUSION This chapter reminds of the research objective and questions studied including the procedure for data collection and analysis. The chapter presents the key findings of the study undertaken. The chapter also presents the limitation of the study and suggestions for future research. It ends with the coverage of the overall conclusion of the study. CHAPTER TWO COUNTRY PROFILE AND FINANCIAL REPORTING ENVIRONMENT IN GHANA 2.1 INTRODUCTION The environment within which a study is undertaken influences the methodology to be used and the weight readers should put on the conclusion drawn from the study. Therefore, understanding the social, political, cultural, and economic within which this study is undertaken is important. This chapter puts the research environment in context. The location and peoples of Ghana is provided in section 2.2. Section 2.3 presents political development in Ghana. Section 2.4 outlines the structure of the Ghanaian economy. The financial reporting system in Ghana is presented in section 2.5. Section 2.8 summaries the issues studied in the chapter. 2. THE LAND AND PEOPLE OF GHANA Ghana is sub-Saharan African country located along the Atlantic Ocean with a total land area of 238,539 square kilometres. Ghana shares borders with Togo, Cote dIvoire and Burkina Faso. There are ten regions in Ghana. These regions are broadly categorised into two: Northern and Southern sector. The major vegetation of the northern sector is savannah but the southern sector is predominantly rainforest belt. The population of the country as at the last population census in 2000 was 18.91 million with an annual growth rate since 1984 2000 of 2.7% (GSS.2007).The population density of the country is 79.3% with greater concentration in the southern part of the country. The temperature is generally between 21-32 °C (70-90 °F). The Ghana Statistical Service puts the literacy rate in the country at 34.2%. There are about 56 different languages in Ghana due to the many ethnic groups. The English language is the official language of the country. 3. POLITICAL DEVELOPMENT IN GHANA Ghana was the first country in sub-Saharan Africa to gain independence from the British in 6th March, 1957. Ghana became a republic in 1 July, 1960. Ghana is a member of many notable international organisations some of which are as follows: the Africa Union, the World Bank Group, the Commonwealth, ECOWAS, International Monetary Fund, Africa Development Bank, the African Peer Review Mechanism and the Economic community of West Africa States. Ghana after going through four successful coup dà ©tats return to democratic rule in 1992 under executive presidency. The nation has enjoyed an uninterrupted democratic regime since 1992. The last election of the country was held on the 7th of December 2008. National Democratic Congress, a party with social democratic ideology took over the reigns of government from the New Patriotic Party- a party with capitalist philosophy. Internationally, Ghana is seen as a beacon of hope on the continent of Africa because of her democratic credentials. 4. THE ECONOMY OF GHANA The economy of Ghana depends predominantly on agriculture, mining and quarrying and forestry. The economy has been designated in three major sector-agriculture, service and industrial sector. Agriculture is the main economic activity and currently accounts for about 34.3 of GDP, followed by 31.0% from the Services sector (GSS, 2007). Ghana relies mostly on Cocoa and Gold for its foreign currency earnings. The industrial sector contributes. Ghana has recently discovered oil in commercial quantities with first lifting expected in the year 2010. The GDP growth rate of the country between 2005 and 2008 are as follows: 5.9%, 6.4%, 6.3% and 7.2% percent respectively (World Bank, 2008). The currency of the country was re- denominated in July 1, 2007 by setting ten thousand Cedis to one Ghana Cedi. This was done to remove dead weight zeros of the old cedis as the volume and value of transaction keeps increasing to make recording easier (GOG, 2008). In 2007, Ghana successfully raised US $750M from the Euro Bond Market. The bond was oversubscribed by the international community. The oversubscription and the quality and internationality of the investors were attributed to the confidence of the international community in the Ghanaian economy (MoFEP, 2008). 5. FINANCIAL REPORTING ENVIRONMENT IN GHANA 2.5.1 Sources of Financial Reporting Regulation in Ghana The government and the private sector are responsible for financial reporting regulation in the country. The government exercise its responsibility through the department and the agencies under its purview namely: Registrar Generals Department, Securities and Exchange Commission, Bank of Ghana and the Insurance Commission. The Ghana Stock Exchange (GSE) and the Institute of Chartered Accountants (Ghana) (ICAG) are the private sector institutions responsible for financial reporting regulation in the country. 2.5.2 The Registrar Generals Department (RGD) Every company in Ghana is expected to registrar with the Registrar of companies in accordance with the Companies Code 1963, Act 179. The Registrar Generals Department in Ghana is responsible for the issuance of certificate of incorporation and commence before a company can start its operating activities. Companies are expected to submit their annual account to the (RGD). The RGD has the power to exempt a company from disclosure requirements. 2.5.3 Bank of Ghana The Banking Law 1989, PNDC 225 gives the Central Bank, Bank of Ghana (BoG) an oversight responsibility over the banking and non-banking financial services institutions in Ghana. Banks and non-banking financial institutions are suppose to comply with financial reporting requirements in Ghana in addition to Manual of Accounting and Auditing specified by the BoG. The BoG regularly visits the banks and nonbanking institutions in the country. Financial and nonfinancial banking institutions are supposed to file their annual returns with the BoG. With the adoption of IFRS Ghana, banking and non-banking financial institutions are required to comply with IFRS in addition to the Accounting and Auditing Manual specified by the BoG and the requirements of the Companies Code 1963, Act 179. 2.5.4 Internal Revenue Service The Internal Revenue Service is empowered by the Government of Ghana to develop the forms and basis of taxation in Ghana. Taxes, which affect corporate financial reporting, are as follows: corporate tax, capital gains tax, stamp duty, gift tax and national reconstruction levy, value added tax and now the Economic Stabilisation Levy.The Customs Excise and Preventive Services (CEPS) levy imports and Exports duties on companies. 2.5.5 Institute of Chartered Accountants (Ghana) An Act of Parliament, Act 170, established the Institute of Chartered Accountants (ICA) (Ghana) in 1963. The Act 170 empowers the ICA (Ghana) as the regulator of financial reporting in Ghana. The members of ICAG are only persons recognised under the Companies Code, Act 179, for the purpose of audit of companys account. Until the adoption of IFRS in Ghana, the Ghana Accounting Standards (GAS) that was in used was adaptation of the IASC standards after the each IASC standard was reviewed. The ICAG is a member of the International Federation of Accountants and Association of Accountancy Bodies in West Africa. 1. Ghana Companies Code 1963, Act 179 The companies code 1963, Act 179 prescribes the nature and form of information which must be provided in the annual reports and accounts of corporate entities in Ghana. The Companies Code defines annual reports and accounts as directors report, profit and loss accounts for a period, balance sheet as at the end of the period, notes to the accounts and the auditors report. Section 124 (1) enjoins directors of corporate entities to prepare and submit audited accounts to members and debenture holders every calendar year at intervals of not more than fifteen months. With the adoption of IFRS companies are required to comply with the requirements of the Companies Code in addition to the measure and disclosure requirements as specified by the IASB. In Ghana, failure to comply with the provisions of the Companies Code carries sanctions. 2.5.6 Ghana Stock Exchange (GSE) The Ghana Stock Exchange (GSE) was incorporated as a private company in 1989 under the Companies Code Act 179(GSE WEBSITE). Trading on the floor of the exchange commenced on November, 1990. There were thirty-five (34) companies listed on the GSE as at 31st December, 2008. Trust Bank Gambia Limited is only foreign issuer on the GSE. The total volume of shares traded on the exchange in the year 2008 were two hundred and six teen million, five hundred and eighty four thousand and six hundred (216,584,600). The year-to-date performance of the GSE as at 31st December, 2008 was 58.06%. The Stock Exchange Listing Regulation 1990, Legislative Instrument No.1509 instructs listed companies to make additional disclosure in their annual reports regarding the number shares and stated capital, information about the company secretary and registrars, transactions with directors, statement of source and application of funds, interim reports and unaudited report to the GSE prior to the submission of a udited annual reports. The role of the GSE is to win the confidence of the investing public (internal and external), protect investors and encourage companies to raise funds through the equity and debt markets. Therefore, IFRS which has been perceived by the IASB to be a high quality accounting standards will help the GSE in their quest to build confidence and protect investors. The focus of this study is the impact of this perceived high quality standards on listed companies in Ghana which to the best knowledge of this researcher has not yet been studied. 2.5.7 International Financial Reporting Standards With the adoption of IFRS in Ghana, listed companies are require to comply with the measurement, presentation and the disclosure requirements of applicable standards in addition to the requirements of the Companies Code 1963 Act 179 and the Banking Law 1989. 6. Summary Globalisation of businesses and integration of capital markets of which GSE is part, makes it imperative that financial reporting practices of listed companies should be reliable, relevant, verifiable, comparable and confirm with international financial reporting standards. Financial reporting is affected by the social, political and economic environment within which its operates. This chapter discussed the country profile of Ghana and the financial reporting environment in Ghana. The next chapter reviews the literature. CHAPTER 3 LITERATURE REVIEW 3.1 INTRODUCTION The issues studied in this chapter include conceptual issues and theoretical framework on the impact of IFRS adoption on companies. Specifically, the issues studied include, the meaning and history of international financial reporting standards, IFRS adoption around the world, the role of capital markets, the relevance of IFRS to emerging capital market and theoretical framework on the impact of IFRS on companies. 3.2 HISTORY OF INTERNATIONAL ACCOUNTING FINANCIAL STANDARDS BOARD (IASB) The International Accounting Standards Board (IASB) is private non-profit making organisation responsible for the development, issuance and approval of accounting standards to form the basis of financial reporting. The objective of the IASB is to, â€Å"provide the worlds capital markets with a single set of high quality accounting standards to be used as a common language for financial reporting† (IASB. org). The IASB came into effect in 2001 to replace the International Accounting Standards Committee (IASC).The IASC was formed by a group of professional accountants from nine countries (Australia, Canada, France, Germany, Japan, Mexico, Netherlands, United Kingdom/Ireland, and the United States of America) in 1973. Sir Henry Benson, who put forward a proposal for the formation of IASC at the 10th World Congress of Accountants in 1972, was elected the first chair in 1973 (IASPLUS.org). The immediate tasks of the IASC were the development of accounting standards on accounting policies, inventories, and financial statements. The IASC issued its first accounting standards in I975. The accounting standards developed and issued by the IASC were called the International Accounting Standards (IAS). These accounting standards are still in used today. The IASB and its predecessor lack the power and authority to ensure that companies that adopt their them are complying with their standards. They rel y on national standard setters to ensure that companies comply with their standards. 3.3 THE MEANING OF INTERNATIONAL FINANCIAL REPORTING STANDARDS Accounting standards are a set of rules, regulation, and convention that guide the preparation of financial statements and financial reports. Accounting standards form the basis for the preparation and auditing of corporate annual report. Accounting standards are developed based on conceptual framework and in the case of the IASB the ‘due process. Conceptual framework for the preparation of account has been described as a constitution (FASB, 1976; Miller, 1985; Solomon, 1986) which forms the basis for developing accounting standards. Conceptual framework are developed to guide standard setters to ensure consistency in issuing future standards and as a guide in settling accounting issues in situations where there are no accounting standard ( IAS.PLUS.org). The conceptual framework defines the elements in the financial statements, how they are recognised, measured and presented which serve as a point of reference to management in situations where there are no accounting standards (IAS. 8). Conceptual framework is not an accounting standard in itself. In situation where there is a clash between a particular standard and conceptual framework, the interpretation of the accounting standard supersedes that of the conceptual framework. The development of accounting standard undergoes several stages before it is published. The process through which a project undergoes before it is finally issued or rejected through voting is known ‘Due Process. ‘Due Process allows interest groups (preparers, users, auditors, analyst, academia etc) to take part in the standard setting process through the submission of comments. In spite of the democratic nature of the standard setting process, prior research document intense lobbying by constituents of the standards setters (see Zeff, 2002; Georgiou, 2004; Cortese et al, 2006). Accounting standards can at best be thought of as a compromise between competing constituents. International Financial Reporting Standards (IFRS) are developed and issued by the IASB. The standards issued by the IASC are called International Accounting Standards (IAS). IFRS has both narrow and broad meaning (IAS PL US.org). In the narrow sense, IFRS refers to the sets of new standards issued by the IASB different from the previous standards (IASs) issued by the IASC. The IASB has issued eight new standards (IFRS 1, 2, 3, 4, 5, 6, 7 and 8) since 2001. Broadly, IAS 1.11 defines IFRS as the entire standards (IFRSs and IASs) as issued by the IASB and IASC respectively and the interpretations issued by the International Standards Interpretation Committee (IFRIC) and the Standards Interpretation Committee (SIC). 3.4 IFRS ADOPTION AROUND THE WORLDWIDE IFRS has gained acceptance as a single set financial reporting standards in countries around the world. Deloitte (2008) suggests that globalisation of capital markets have created the need to scrap local standards in favour of international standards and benchmarks and attributed IFRS adoption as single set of global accounting standards as the best example towards this end. Deloitte asserts that more than hundred (100) countries have adopted IFRS for financial reporting but others including (Chile, Korea, Brazil, India, and Canada) have agreed to adopt or converge to IFRS by 2011. Chile and Japan have agreed to work the IASB to eliminate the difference between their local GAAP and the IFRS to ensure convergence. The European Union (EU) in 2002 mandated all listed companies within the EU to issue financial report using IFRS beginning 2005 (EC No. 1606/2002). This applies to new countries that will be admitted to the EU membership. This development made the EU the largest customer of the IASB because no continent had and have still not taking such bold initiative. Even though IFRS is mandatory for all listed companies in the EU, the EU does not issue blanket adoption of the standards issued by the IASB. The Accounting Regulatory Committee (ARC) within the European Commission must endorse the standards before they become applicable in the EU. This endorsement process confers political power on EU over the IASB (Whittington, 2005) at least for now. This power would dwindle if the largest capital market of the world, the United States, eventually adopts IASB standards, which has started with the removal of reconciliation requirements ( ) for non-US issuers who issue financial report based on IFRS . In 1993, the IOSOC tasked the IASC to develop ‘core standards to be used for cross boarder listing after the existing standards had been reviewed. The core standards were issued in 1999 and the IOSCO recommended its members to use IASC for cross boarder listing in the year 2000 (IASPLUS.com). Many countries have adopted IFRS due to their association affiliation with politically powerful bodies and their agents, which offer a great deal of assistance, which could be financial, training, trade partnership etc. Ghana perhaps allowed IFRS for financial reporting due to its affiliation with the IFAC (World Bank, 2006) and mandatorily adopted IFRS in 2007 after the recommendation by the World Bank in 2006. The United States, which would, perhaps be the last country to adopt IFRS, has taken a giant step towards converging the US GAAP with the International Accounting Standards Boards. The US SEC has removed the requirements, which ensures that foreign issuers who report based on IFRS reconcile their financial statement with that of the US (SEC, 2007 A.III.2). The US SEC has developed seven milestones, which must be achieved in order for the SEC to determine in 2011 whether IFRS should be mandatory for US issuers in their filings with the SEC in 2014 (SEC, 2008). When the US finally adopts IFRS it would become the language for reporting as other countries would be attracted to do so (Tweedie, refer to assignment). This development when actualised will lead to global convergence, which has been the long cherished vision of the IASC (now IASB) since its creation in 1973 (Benson, 73; IASB, 2003). IFRS adoption can come in many forms and shapes. Some countries (e.g. South Africa, Ghana) have adopted IFRS without modificat

International Marketing Essay

Many researches has been conducted on flight companies that are operating and connecting all the continents, but this research is about a company that started in 1940s in an Arab country in the middle east, the company is call flight Emirates, first the company was aimed to deliver flying service in United Arab Emirates and in the region, but as soon as the company raised revenues and added new shares the company thought of going further and compete in the global market. The amazing and surprising part in this company is its ability to rapidly grow and compete perfectly in the global market not only that, it has achieved its objective in that competition as you will see in the paper. The contents of this research are four parts, in the first part we will take you through how the company started and expanded to the global market up to United State of America, vision and mission of the company in the market place. In the second part you will see how the PEST and other driving forces has effect the company operations in United States and other countries, while reaching part three the research will show how the company’s segmentation, distribution, pricing and product strategy are being perform, and we shall conclude with a comprehensive summary, analysis and present the results that we have got through out our research. The unifying them in this research is the company ability to compete in a higher competitive environment like USA not only that but resulting on generating revenue and adding value to its original capital, the company also can be count as one of the biggest flight companies in the world due to its capability and differentiation in the market place. Finally, let’s hope that our research will be a vital added value to previous researches in the same matter. PART ONE: 1.1 About flight Emirate: The beginning of Emirate flight goes back to 1959 when Sheikh Rashid Saed the government official opens the Dubai international airport and announces that Dnata company with only five staff will be in charge of ground handling services, in 1978 Mr.Manrice Flanagan was appointed by Sheikh Rashid to be the general manager of dnata company which is the operating company for flight Emirates, Mr. Flanagan later on in 1984 design how the company could possibly move to serve in air service, and with acceptance of Dubai government the company requested Pakistan international airline to lease them two aircrafts, the deals were struck to fly into Karachi, New Delhi and Bombay in India. In 1985 Sheikh Mohamed gifts two Boeing 727-2005 to the airlines, these two Boeing increased the operations where the airline was able to fly to more than twenty countries. Sheikh Ahmed later on in 1990 signed an agreement with Asian Aerospace exhibition in Singapore to add airbus A310-300s to the company. In 1992 Emirate flight become the first airline to install video system in all seats in all classes in the same year the France government allow officially the flight to operate in the country, by that time the company’s work forces become 11,000 employee. Ten years later exactly in 2011 the company managed to fly to more than 120 destinations world wide, and recorded a profit of ($1.6 billion) and bought the largest Boeing in history 50777-300ER. Flight Emirate as part of its marketing strategy has sponsored number of events and competitions e.g in 2012 the company sponsor Tennis in united state and crick’s Indian premier league. As we mentioned earlier the Dnata Company headed by smart board of directors is not an easy company and the proof is that its ability to raise the capital to $ 2 billion and the workforces from 11,000 to 62,000 employees in 2012 as it was the most profitable year for the company. The company now call the Emirate group and consist two parties Emirate and dnata company and has expanded into many business for instance, hotels, workshops and tourism and the are operating all over the world. 1.2 Flight Emirate in North and South America: Flight emirates operates in North and South America challenging Americans airlines in delivering air services it flies to Brazil, Chile, Mexico, Peru, Urguay, Canada and United States, within the United States the company operate in more than six states creating a competitive environment and adding valuing advantage to this market. The free market economy adopted by United States is a difficult market to compete in if you don’t have a competitive advantage, the flight emirate with its uniqueness and appropriate tactics has a lots of winning games as we shall discuss it later on in part three, and you will realize that the company has attracted the market using different approaches. 1.3 Flight emirates management orientation toward global business: Flight emirate as we stated earlier in our introduction started as a small company call dnata in Dubai, therefore the management structure in the early 1950 was regiocentrics but after the Dubai government increased the capital and instructed many deals the company management changed in 1960s to be geocentric orientation as the views the entire world as a potential market and strive to develop their brand and integrate in global market. The reasons why we categorize the company as a transnational company are the followings: (1) The company operates in more than 100 countries and flies all over the world. (2) The company’s work forces are more than 62,000 employee spread in six continents. (3) The company assets i.e (flights, workshops, hotels etc) are not all based in Dubai. In conclusion to this regard the emirates company management can be classified as a combined of two management structures, reogiocentric a nd geocentric because in its starts the focus was regionally but later on they progress in global scale till they adapt the geocentric orientation structure. 1.4 Flight Emirate vision and mission: Vision: The vision of flight emirate is very simple as we mentioned earlier the company started as ground services company in 1940s but after Dubai government decided to inject more capital the business increases and ambitions become more than just being a ground service company therefore in 1960s the company decided to focus broader in flight services not only in Dubai and in the region but even globally. Now the vision is to be a â€Å"leading company in flight and tourism world wide providing excellent, safe and customer satisfaction†. Mission: The mission of the company is to ensure that the flight is the choice of every traveler and to create a business competitive environment and add valuable service to the market. Differentiation, opportunities and development of a star brand in the Gulf region and all over the world is the purpose of the company’s today’s focus. PART TWO: The Business Environment: 2.1 Political, Economic, social and Technological analysis (PEST): The business environment where the company operates is an important situation that we have an obligation to express in this research, many forces drives and affect the market place of any operating company, to analyze the situation we read the political, economic, social and technology changes. Political and Economic aspects: The country where flight emirate generated from is United Arab Emirate in middle east one of the world’s largest country in oil production, the economic growth and political stability are the sign of advancement in that country. UAE currently undergoing rapid expansion in investment and private venture, the government made number of commitments to strengthen and reform its investment regulatory and make conducive environment for exports and imports. United States and UAE are strongly partners in many political alliances, economic benefits, social and cultural activities the exchange numerous of interests in regard to these issues. Politically, the relationship between the United Arab Emirates and United States has been positive and productive for more than 30 years they are a reliable allies in many military, economic, and social affairs, the United State view UAE as source of stability, tolerance, innovation and a leading figure in the Gulf region. After the US tragedy in September 11 2001 where 2,996 including hijackers killed, the US foreign policy changed a lot including the relationship with UAE based on the fact that two of the hijackers were from UAE, immediately after the attack the background security checks for an Arab visitors was very high and research shows how some harassment and hates developed against Muslim in US. In conclusion to the political environment where flight emirates operates i,e in US there is no negative impact due to the strong and smooth relationship between the two countries. Economically, the UAE is the US single largest export market in the Middle East with $1.5 billion in 20 11 most are machinery, aircraft, industrial and other valuable items, US imports from UAE in 2011 was 2.44 billion most are crude oil, aluminum and other things. The US petroleum companies played a big role in development of UAE energy sector, more than 800 US firms are operating in the UAE investing in different sectors and injecting UAE market with new jobs and opportunities of Arab youth. The research also found that the US, UAE relationship is a long term partnership and each state in US probably has its own trade relationship with UAE. Research also found that UAE is the larger operator of Boeing 777 aircraft in the world, in November 2011 Emirate flight placed an order for $ 24 billion record breaking for 50 Boeing 777-300 ERs, before that there were number of orders for purchasing Boeing from US which make the company the most consumer of this type of flights. In conclusion to economic relationship between the two countries, the flight emirates is the world’s largest operator of Boeing 777 and serves non-stop flying from Dubai, also the robust trade and investment relationship between UAE and USA is based on the political stability and diplomatic understanding. Socially, the UAE and US have a lots of social partnership in numerous of activities, UAE is an open country for visitors and legal immigrant, its population is extremely liberal and open minded society compare to the other countries in the region, UAE attracts many investors and tourist including US citizens, the US population in UAE estimated to be 4,000 people working in different sectors of production. UAE population in USA is recorded not to be affected by any violence or discrimination against any human right because US treat and protect the entire resident equally but individual harassment does exist because of personal behavior. According to researches, after September attack where two were from UAE as we stated earlier the Americans views on Islam and Arab has changeed a bit of which number of travelers to and from Arab world has decreased. Technologically, as technology refers to the application of science and research into industrial or commercial objective, it has affect societies all over the world, flight emirate in its existent relies on technology in all its operation and has benefit so much in US market on this matter, marketing customers service and other operation are possible in flight emirate because of technology and the latest news in this regard is the announcement of the company recently that it will allow all the passengers to use their cell phone in its all f light operating in US market very soon, that could not be possible if the company was not connected with USA. To conclude this topic technology has not negatively affected the operations of flight emirate in USA, it has really been a source of inspiration for the company. 2.2 The Effect of Culture and Sociology: In United States market culture as (education, religion, values, attitude etc) play a big role in business place, flight emirate with its unique study of American’s culture has found it a useful environment to operate in, US is a multi cultural community where different ethnic groups coexist without any discrimination. US market is a free economy where competition is the only factor that can push you to the top or crash you down, flight emirate adapted those diversities and without any exclusion and that is why it has been able to compete with US fight companies in the market place, as we stated earlier the only side effect on flight emirate in US market was what follows September attack when a group of terrorist from middle east and with Islam background hijack US flights and threaten US as a sovereign country, the result on that was the reduction of travelers from and to Arab countries, raising the searching system which actually targ eted travelers from Gulf countries and individual harassments by some indigenous citizens. In conclusion to culture and sociology the company does record much challenges in US market based on these aspect but the following points are what we think to be the company’s threats in US market: 1-Flight emirate generated from Arab country therefore it might be a target of terrorist and use as a cover to make insecurity in USA. 2-Services in the flight emirate are indirectly affected by Islam as the crew do welcome passengers by Quran prayers on board, this activity does not satisfy non Muslims on board. 3-Wearing of AL hijab by Arab women is not an acceptable sign by some people. 4-Citizens of UAE started to avoid traveling to USA because of long waiting visa due to background security checks. PART THREE: THE COMPANY MARKETING PLAN 3.1Marketing (country) selection and entry strategy: Flight emirate operates in more than one hundred countries and flies over six continents, the research has an interest in US market and here are the reasons why the company chosen to compete in US industry: -The airline copes and encourages free competition with other market player using a strategy known as â€Å"the open skies strategy†. -The political environment and the strong relationship between USA and UAE encouraged flight emirates to choose US as useful market to operate in. -USA is an open economy where the market competition is the art of the game, flight emirate with its quality services and competitive advantage choses to be part of it. -US dollar is the most powerful currency in the world, since the company adopted this currency to be the company main fare in its all operations than the company got it profitable to operate and expand in US market. -Flight emirate benefit mo re from long haul flying which also save fuel consumption as well as non-stop flying from Dubai to USA is profitable. -The Boeing 777 is the major aircraft used by the company hence all the accessories, parts and maintenance is cheaper and available in United States. The above reasons plus the growing business opportunities between US and UAE has increases the demand for direct flying from Dubai to United States. 3.2 Segmentation, Targeting and positioning: Flight emirate like any other flights in the airline industry has a specific strategy on targeting and positioning its self in the market place, below are the airline targets: 1-Emirate flight is one of the big airline in the world, the rapid growth of Dubai and its good relationship with other countries especially US had given a chance to the company to position it self as the major carrier between the two countries and inside the US, the company currently operates in eight states in US market targeting the following segments: 2-The demand for traveling to Dubai by tourist and business people has increased and especially in summer session where Dubai attracts more than seven million tourists. 3-Expatriates, because Dubai is a working environment and highly paid city, the demand for people to travel to and from Dubai increased hardly, many US citizens live and do business in Dubai while the also regularly visit their homes, therefore flight emirate is playing that role of targeting those group. 4-Transit passengers, before the haul long flying strategy being implemented by many companies were suffering from waiting hours, passengers from US did fly to middle east or Dubai connecting through Europe, flight emirates made it easier to dominate this segment by offering direct flight between Dubai and USA and found it very profitable. Because of demand increase within the United States, flight emirate with its quality services and golden brand attracted those groups and the company positively responded and got it much profitable. 3.3 Information and research strategy: The aim of this strategy is to keep the company growing and competitive in the market place, the information and research are the heart of any successful company, it explore opinions and attitude of customers and allow the company to predict the future result of the company’s operations. Flight emirates value information technology and research and has invested a huge of amount approximately $200 million and deployed 2,200 employees, recruited from the most qualified institutions in the world. The company’s IT department and research after ensuring solutions for the company also provide services for other business in the region as the generate revenue to the company from that services. Research found that flight emirate invest heavily in information technology and research for smooth operation and acknowledging the customers needs and demand in US market. 3.4 product strategy: Oil prices has been unstable and challenging in world’s market place for many flight companies to perform perfectly with out any conciliation or interruption, flight emirate has made it easier by signing a deal with several major oil companies to supply jet fuel to them all the time with a specific price, that deal remain unchangeable no matter what the future market may present, this fuel strategy has maintained the company profitability high among the competitors. The fight also gain a lot of profit base on product strategy through it plan of long haul flying, direct from US to Dubai because this kind of service attract big number of passengers of which the company provide cheap prices. In this strategy also the company has divided its portfolio into two, airport services and infrastructure, the airport service has to ensure the safety of passengers baggage and belonging up to the last destination, this strategy has build confident between the company and the customers. The free competition strategy that was adopted by the company enable the customers view their opinion in the services, employee training and capacity building in the company has been a successful part of the product strategy because it keeps the delivery of service in a high position. Buying new aircraft every short period is one of the promotion for product strategy and what kept the company delivering excellent services in US flight industry. 3.5 Pricing strategy: Pricing strategy is the secret of any successful company, the first thing the company does was to keep US dollar as the standard currency of exchange in the company, based on the fact that dollar is a powerful and stable currency and is convenience to all passengers regardless of their country of origin, this strategy made the company’s profit always high. The company has a sufficient strategy that enable passengers enjoy cheap pricing either in short or long haul flying, this has been a competitive advantage to the company, the company has been in the market for a short time which mean the company does not charge legacy fee in its ticket because there is no burden of pension as other companies do, the well train and qualified financial managers that the company has are playing a role of keeping the financial plan in a safe environment. The most important factor that keep flight emirate cheap and profitable is the variety of aircraft that operate in diffe rent allocation this gives the passengers the option of choosing the cheaper the can afford. All the above are supported by the fact that prices of flight are not being fixed any where because it depend on the market demand, what keep flight emirate cheap and affordable is their continuation of reading the market rightly.

How significant was James Simpsons role in solving the problem of surgery during the 19th century?

During the 19th century, there were many attempts to perform surgery without there being any risk towards the patient. This usually meant that the surgeons had to overcome problems of pain, infection and blood loss which were the three main ways in which patients died during surgery. Many individuals discovered methods to make surgery safer. One of these men was a Scottish doctor, by the name of James Simpson, who discovered the anesthetic properties of chloroform and successfully introduced it for general medical use. Of course, there were other individuals who had used different varieties of anaesthetics before James Simpson. In 1799 Sir Humphrey Davy discovered laughing gas which reduced pain felt by patients. It was mostly used by dentists during teeth extractions, which caused excruciating pain. In 1846, J. R Lister used ‘ether' as an anaesthetic so the patient would be unconscious during operation. However this was soon dismissed as it irritated the lungs and caused the patient to cough during the operation as well as the fact that ether is highly flammable. The fact that others had already tried to come up with suitable anaesthetics that could be used in surgery shows that James Simpson's discovery had been built up with knowledge of previous attempts. It also proves that he wasn't solely responsible for discovering ‘anaesthetics'. James Simpson was appointed the Professor of Midwifery at Edinburgh University due to his interest in obstetrics. In 1847, Simpson discovered the properties of chloroform during an experiment with friends in which he learnt that it could be used to put one to sleep. It was very much up to chance that Simpson survived the chloroform dosage he administered to himself. If he had inhaled too much, subsequently passing away from an overdose, chloroform would have been seen as a dangerous substance. However, if Simpson had inhaled slightly less it would not have put him to sleep. It was his willingness to explore the possibilities of the substance that established his career as a pioneer in the field of medicine. He began to use chloroform as an efficient and effective anaesthetic used to relieve labour pains during childbirth. This theory of relieving patients from pain spread across to many other surgeons who began using this method of anaesthesia. James Simpson was able to find an actual anaesthetic that was suitable in surgery, and he took the risk of trying the chloroform himself proving that he was dedicated to improving and solving the problems of surgery. Yet, there was a lot of opposition to chloroform due to it being a new and untested gas. Surgeons did not know how much dosage to give their patients or whether there would be long-term side effects. There was also the fact that the use of chloroform caused an increase in deaths, since the patients were given a bigger dosage of chloroform that was necessary. This scared the many surgeons into not using it. There were also other who opposed chloroform because they believed that easing the pain of childbirth, it would make it unnatural and was an act against God. In addition to this, whilst the patient is unconscious surgeons became more confident and attempt more complex operations allowing infections deeper into the body and causing more blood loss. This also contributed to the rise in number of deaths since the introduction of chloroform. Yet, James Simpson soon got many people to realise that his theory was accurate and it was soon accepted. When Queen Victoria used chloroform when delivering her eighth child in 1857, the public along with many other surgeons began using it as an anaesthetic and this soon became a part of surgical practise. However although James Simpson had already tried the anaesthetic on himself, it almost immediately became clear that there were very serious side effects associated with its use and it was known to cause death in a number of instances. From 1864, numerous studies were conducted in an attempt to determine whether chloroform affected the respiratory system or the circulatory system. The major health effects of chloroform surround acute inhalation which leads to depression which is why it was used for a long time as an anaesthetic. Chronic exposure to chloroform was associated with affects on the liver, kidney, and central nervous system. The evidence that chloroform was dangerous and fatal in numerous ways added to the opposition and causes us to believe whether James Simpson really was responsible for an important breakthrough in surgery. In addition to this there were many other breakthroughs by many other people who would be considered to be more important since their discoveries caused essential progress in solving the problems of surgery. Louis Pasteur was extremely vital as he was responsible for the development of the Germ theory, along with Robert Koch. The French scientist was also accountable for the many vaccines such as Chicken cholera, Rabies and Anthrax. Of course, this was accentuated by the rivalry between Pasteur and Koch since, they were both ambitious and nationalistic and France had lost a bitter war to Germany in 1870-71. Joseph Lister was then able to use the germ theory to uncover another significant discovery: antiseptics. This included sterilisation of all equipment, including doctor's hands, throughout the surgery. His reasoning behind this was to reduce the number of patients dying from infection passed on from bacteria on clothing and apparatus. This was vital because many people were dying from infection at the time and there were no advances to decrease the numbers until Lister's antiseptics. Another individual who was able to put the germ theory to good use was John Snow, who was responsible for discovering the cause of cholera, a big killer during the 1800s. He discovered that cholera was spread by drinking water that contained bacteria. Snow was one of the first physicians to study and calculate dosages for the use of ether and chloroform as surgical anaesthetics, allowing patients to undergo surgical and other procedures without the distress and pain they would otherwise experience. He personally administered chloroform to Queen Victoria when she gave birth to the last two of her nine children, leading to wider public acceptance of obstetric anaesthesia. The fact that there were many other individuals who were able to discover other vital things prevents James Simpson from solely being responsible for solving the problems of surgery. John Snow also proves that James Simpson was not the first to come up with the idea of ‘anaesthetics', and therefore cannot really be responsible for the discovery although he played a major role in coming across chloroform. In conclusion, I believe that James Simpson's role was not very significant in the attempts to solve the problems of surgery. This is because he was able to use other people's ideas, such as John Snow, to actually discover the anaesthetic. In addition to this, there were many other individuals and factors such as War and Technology that would have impacted surgery on a bigger scale than that of James Simpson's discovery of chloroform as an anaesthetic. Although we can see his dedication in proving that chloroform was a suitable anaesthetic we can also see that there was a lot of scope for other individuals to find an anaesthetic that may have proved to be less fatal.

Child Abuse And The Effect On Development Into Adulthood

Child Abuse and the Effect on Development into Adulthood In the past ten years researchers have increase their knowledge on the understanding of the different effects that maltreatment has on early brain development. A foundation has been set for the neurobiological explanations of children who have experienced sexual abuse in their early years of life. The explanations include areas of physical, cognitive, social, and emotional struggles. There are many different internal and external factors that associate with the way the child develops into adulthood. Variables that can be taken into account are individual factors and environmental factors. For example individual factors consist of children’s temperaments and vulnerability. In regards to environmental factors this contains how caregivers portray abuse along with overall family atmosphere. Some other specific variables associated with abuse are duration, amount of violence, and relationship between victim and abuser. In addition, age has a strong impact on the victim in regards t o adult sexual behavior. When a child is abused at a young age he or she is more likely to engage in sexualized external behavior. At the age of six or younger, children have a higher chance to show their abuse through inappropriate and aggressive sexualized behavior. As for older children of twelve and up they lean more towards fear of sex. These children shoe more internal behavior problems as well (Aaron, 2012). In the true story, A StatementShow MoreRelatedChildren Are Victims Of Child Abuse1353 Words   |  6 PagesNovember 10, 2014 Damage Done Did you know that more than six million children are victims of child abuse in the United States? We lose four to seven children every day due to abuse and neglect. The United States has one of the highest child abuse records across the nation (National Child Abuse Statistics 1). Children can be abused in many ways including neglect, physical, mental, sexual and emotional abuse. 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