The analysis of EC Proposals and the Statutory Audit Essay

The analysis of EC Proposals and the Statutory Audit - Essay Example Blame was levied at rating agencies, directors of companies in the financial system and their regulatory agencies, as well as accounting and auditing professionals. This led to a number of regulatory responses that were aimed at strengthening controls over the operations of financial institutions and enhancing financial reporting. These responses have not only been limited to governments in the countries affected but to various bodies including standard setters for the accounting and auditing profession. Te European Commission (EC) which gives directives to 27 countries, made two proposals that could result in major changes in the auditing statutory audits and the audit of PIEs. They are aimed at the professionals whose opinion adds credibility to financial statements as well as supervisors of PIEs. Additionally, there was the Basle lll Accord which amended the capital requirements for financial institutions. Since then auditors have been required to provide more comfort to investors by carrying out additional procedures that would enhance financial reporting. Audit committees have also been challenged to provide the necessary support to ensure compliance. This paper provides information on the background to the financial crisis and the audited accounts of financial institutions. ... 2.0 Background to the financial crisis Several factors worked together to generate the crisis in the financial markets across the world since 2007. Jickling (2010) points out that there were multiple causes to the crisis as reflected in the policy responses taken in the US. One of these was the existing and anticipated credit losses on mortgages in the United States (Ellis 2010). These mortgages were made available to persons who would not have been able to obtain them under normal circumstances. The lowering of standards allowed them to obtain mortgages at relatively low rates so that they could own their own homes. However, one drawback was that the rates were adjustable. Therefore, persons who might have been able to repay in the initial stages soon found out that they could no longer service their mortgages. This coupled with the oversupply of houses on the market resulted in a reduction in their house values and therefore the values of the security for mortgage loans. In some ca ses the value of the houses was worth less than the loan balance and so homeowners ended up with negative equity. Therefore, there were no tangible benefits to be gained from holding on to properties that were not worth the amounts owed. A large number of homeowners defaulted on their mortgages and so it had a ripple effect which impacted the global financial system. Murphy (2008) referred to this as imprudent mortgage lending which caused a terrible shock to the financial system. Murphy (2008) also indicated that although imprudent lending paid a role, its role was not very significant. Another factor blamed for the crisis was global imbalances. Smaghi (2008) indicates that this is characterised by some countries like China and Germany having large surpluses

Research paper on Global Warming Essay Example | Topics and Well Written Essays - 1250 words

Research paper on Global Warming - Essay Example It is high time to introduce punitive laws which may protect us from polluting the atmosphere. It is also time to plant as many trees as possible in order to restore the damage done to the atmosphere. Third World Countries and the developing countries sacrifice environmental protection and all related provisions for the sake of infrastructure and manufacturing build up and growth of the national gross domestic product. It is obvious, though, that atmospheric pollution (which is synonymously referred to as air pollution) is not a matter of domestic concern only, because it has no official boundaries and contributes to general worsening of global ecological situation. Global warming is widely discussed nowadays in all areas of human activity and on all levels of government, because ozone layer depletion and greenhouse effect are both direct consequences of chemical emissions in the atmosphere. It may seem at the first sight that human factor is determinative and the only one responsible for current atmospheric pollution; in fact, both natural and man-made sources contribute to air pollution. However, no one will deny that humanity produced a devastating effect on all natural resources due to increased levels of their consumption and exploitation. In order to decrease atmospheric pollution and to guarantee future effectiveness and stability of this reduction, it is necessary to implement specific mitigation strategies. This research paper aims at the description of the notion of global warming and of the way it may affect life on the planet. The possible solutions of the problem (within the limits of mitigation plan) are to be suggested, supported by the analysis of the mitigation strategies that are now in action on both global and national levels. 2. Global Warming- A Global menacw The amount of atmospheric pollution people produce is too high, thus, it is necessary to apply effective measures to minimize the negative ecological outcome that industrialized society is to blame for. There are several sources of air pollution, however the most powerful and directly linked to human activity are fuel combustion (cars) and industrial emissions. Automobiles' exhaust gases constitute a large portion of the overall global atmospheric pollution. As far as the developed countries are concerned, vehicles emit more pollutants in the atmosphere if compared with industry. "On a global scale, cars emit about 300 million tones of toxic exhaust gases into the atmosphere each year" (Climate in Cities: Fuel Combustion During Energy Production and Transportation 2009). The exhaust gases produced by vehicles' petrol engines contain many pollutants, such as nitric oxide, nitrogen dioxide, carbon monoxide, sulphur dioxide, and a certain amount of solid particles. Nitric oxide is responsible for the growth of so called petrochemical fogs that result from the gasoline exhaust gases exposure to sunlight. In particular, ozone, as the product of petrochemical reactions, emerges as a result of nitric oxide or nitrogen dioxide exposure to sunlight. For the larger part of the twentieth century vehicles burnt fossil fuels with comparatively high concentration of