Interpretation of “Doreen Pope” by M. Loudon

The text under analysis â€Å"Doreen Pope† is a type of publicistic writing, feature article. The author M. Loudon managed to make this text informative and entertaining for the reader. The article concentrates on an interesting theme. The theme of the article is about the role of a teacher in the system of education in GB. The author embodies the theme into incomparable character. The story reveals the image of ideal teacher. M. Loudon convinces us of the importance of the teacher’s role for children.This important idea that the author expresses in the process of developing the theme is the message of the story. The theme is organically connected with the message. And M. Loudon places the main point very appropriately. It has a complex character is created with the help of interaction of implications and develops further. Sufficient arguments, details and examples support the main idea. â€Å"Miss Pope was an enormous success with the children because she had a genuin e affinity with them.She also had an unpretentious disregard for the formal†. The author uses references effectively and her reasoning sounds very logically and convincing. â€Å"Miss Pope believed that children only learnt self-worth and corporate responsibility through recognition of their gifts, however insignificant they might have seemed in scholastic terms: so while she was appreciate of talent and enthusiasm, it was those who were shy, or obstreperous, or who found reading or writing is difficult, which whom she spent the most time.†Such cohesive devices as â€Å"practically, so, also, indeed, just, however† within the paragraphs and the repetition the main character’s name between them catch the reader’s attention, give more prominence to the words. Implication is conveyed by different techniques, artistic details, arrangement of plot structure and images. With the help of it the writer achieved her main purpose. M. Loudon informs the reader about educational system in GB, convinces us of the importance of the role of a teacher. She makes us feel sympathy to the main character and respect her strong personality.M. Loudon reminds us about eternal values and morals in our life. The style of presentation of these ideas is appealing and appropriate for the situation. â€Å"Practically, no one reading this will have of Miss Pope. Her greatness is no obvious and it has never been documented. † Using not very formal style the writer involves us to the situation, invites to an open dialog, creates free and trust atmosphere. The author’s attitude to the character determines the tone of the story. Tone expresses the relationship between the author and the character.It is sympathetic, cheerful, and enthusiastic. M. Loudon resorts to emotionally colored words, such as â€Å"cheerful†, â€Å"jolly†, â€Å"brisk†, â€Å"great†. An extensive image of the character is created by similes  "Miss Pope and Sheena as the Madonna and Child in Renaissance Europe† epithets: â€Å"wholesome woman†, â€Å"unobtrusive clothes†, â€Å"sensible shoes†, â€Å"affectionate woman†, â€Å"insatiable sense of humor†. Metaphors: â€Å"she never lost her cool†, antitheses: â€Å"from sunny childhood to dark adolescence† Intensifiers, such as: â€Å"completely different tot us†, â€Å"such an aloof dog†.Polysyndeton: â€Å"she had an insatiable sense of humor and a huge, rotund laugh, and she never failed to reward even the dullest anecdote. † The use of low-colloquial words intensifies the contrast; make a parallel between primary and secondary school: â€Å"fuck off, posh bitch† The writer applies contrast, parallel structure, framing to visualize the article. The use of these means produces a humorous effect and testifies to the inventiveness and wit of the author. The title of the article catches our attention, gives prominence to the main character due to capitalization.The title is the name of the character that emphasizes its importance in the article, defines sympathetic feelings of the author, and arouses reader’s interest to it. The article raises important and interesting themes. It forces us to be involved in the problem of the role of a teacher. Teacher is a guide, is an inspirer, is a monitor, is a friend, is a second mother, and is a mentor, who teaches simple, but timeless and good values. And M. Loudon was succeeded in paying tribute to an inspirational teacher and created a hymn to a teacher.

Remarks by the First Lady at Education Event Essay

The speech was held by the First Lady, Michelle Obama, at the DC High School as an educational event for the sophomores. The overriding subject of the speech is education which is an area Michelle Obama and her husband, Barack Obama, has spent a lot of time and resources on. After the introduction of the speech she speaks of a goal that her husband has set for America. She tells that it should be the goal of the entire country to have the highest proportion of college graduates in the world in 2020. She explains that it is very important because America was number one in college graduates a generation ago and now they are 12th. After that she changes the point of view on the subject from what it means for USA as a country, to what it means for every single student as an individual and points out that they should do it for their own sake. She mentions that two-thirds of all jobs in the country will be requiring some sort of education or training beyond high school in the future. She u ses her own story as an example and motivation for the students because she faced a lot of obstacles when she was at their age. The sender of the speech is Michelle Obama who is the First Lady of the United States. The fact that she is the First Lady gives her a lot of ethos, which makes her points and opinions more reliable and convincing. Even if she got a lot of ethos as the First Lady her husband, the president, has even more ethos, and when she speaks on behalf of him and his opinions she sort of â€Å"borrows† that ethos. Apart from the ethos Michelle Obama also uses the two other appeal forms in her speech. She uses pathos when she mentions the audience and even the country as â€Å"we.† It appeals to their feelings for the community and even their patriotic feelings towards their country. It also shows the students that she is no different from them, when she says â€Å"we† instead of â€Å"you† and â€Å"I† which makes her story about her education much more inspiring. She also uses pathos when she says â€Å"†¦you all are going to need some form of higher education in order to build the kind of lives that you want for yourselves, good careers, to be able to provide for your family.† By saying that she both appeals to their individual, egoistic feelings and objectives in order to get a prestigious, lucrative career, which appeals to some people, while the part about providing for  your family appeals to the familial feelings which is important for other people. Lastly she uses logos when she says that two-thirds of all jobs will require some training or education in the future because it is obvious for a rationally thinking person that you will have greater chances of getting a job if you have a great education. The audience of the speech is the sophomores of the DC High School. That means that she needs to keep the speech relatively simple, as her audience isn’t very old. As mentioned earlier the speech was held during an educational event. That is the circumstance of the speech and under that she addresses the topic education. The purpose of the speech is to motivate the students to continue their education when they have finished high school in order to succeed later in life. Other than the appeal forms she also uses rhetorical language or rhetorical tricks to motivate and convince the students to continue their education. One of the most important parts of the text is the goal for 2020 which Barack Obama mentions as the North Sta r goal. This is especially important because Michelle Obama mentions it twice in her speech. She mentions it in the start when she tells about the goal for 2020 and refers to it as the North Star goal. Later on, at the conclusion of the speech, she tells that her college diploma from Princeton University were her personal North Star goal. North Star is a simile which shows that people should walk towards their North Star goal even though it seemed to be out of reach, like the wise men did when they were looking for Jesus. The North Star goal is the connection between the objective for the entire nation and the objective for each individual student, as every student would have to fight to reach their personal North Star goal, like Michelle Obama did, to make it possible for the nation to reach the big North Star goal. Another trick that Michelle Obama uses is anaphora. She says â€Å"Plus, I knew I couldn’t afford to go on a bunch of college visits. I couldn’t hire a personal tutor. I couldn’t enroll in SAT prep classes.† She uses this anaphora where she repeats the words â€Å"I couldn’t† to point out how many obstacles she fought through in order to reach her North Star goal. This should make the students realize that it is possible for everybody to get an education no matter their social background, if just they fight hard for it. Another example of anaphora is when she says â€Å"That’s how me, that’s how Menbere, that’s how so many other students have overcome adversities to reach our goals.† That once again  makes it clear that everyone can get an education and that it is very important to get an education that goes beyond high school. Even though the speech is relatively short, it is easy to see that Michelle Obama is an excellent speaker. She uses a wide range of rhetorical tricks and appeal forms to make her messages and opinions about education clear and convincing. She both appeals to the feelings of the individual and the society by using logos, pathos and ethos which makes the speech appealing to as many people as possible. She connects the start and end of the speech with the reference to the North Star goal which makes the speech more impactful and gives the students something that is easy to remember from the speech.

Measurement Scales Paper Research Example | Topics and Well Written Essays - 750 words

Measurement Scales - Research Paper Example The scale is often employed in labelling variables that lack any quantitative value such as the human gender, which fundamentally presents itself in two forms that is the male and female (Kendall et al, 2012). Additionally, nominal scales are used while placing data into categories without adhering to any order or structure. Physical examples of a nominal scale are the terms used for colors, as the underlying spectrum normally appear ordered while the names are nominal. Nominal scales are suitable for use in questionnaires, as they enable the parties involved to classify all the variables into specific groupings. At the same time, nominal scales make it easier for the researchers to analyze the collected data given that the information can be totaled. The example below demonstrates how a nominal scale can be used in a questionnaire. An ordinal scale is a feature of measurement that is used to determine non-numeric conceptions such as contentment, delight and discomfort. Under ordinal scales, the order of the values in question are the most important, implying that less significance is accorded to the difference between the variables (Aaker, 2010). Researchers have overtime reaffirmed the fact that the variables within an ordinal scale are easy to comprehend notably because they adhere to the order in which they appear. In like manner, it is far-reaching to note that the ideal way to determine the central tendency of a set of ordinal data is by using both the mode and median values and not the mean. Ordinal scales are normally used when analyzing data derived from questionnaires majorly because they ease the process of classification. Similarly, ordinal scales imply rank ordering as validated in the portion below. The term interval refers to the difference between two values. Interval scales are hence defined as the numeric scales that indicate both the

Research and analysis Assignment Example | Topics and Well Written Essays - 750 words

Research and analysis - Assignment Example One of the limitations is that the outcome of the research is based only on the surveyed businesses. Another limitation is that the participants may not fully understand the survey questions. Consequently, the survey outcomes may not be fully reliable. Uncooperative employee respondents may lead to learning organization failure. Question 3 The research used surveys on each department or group within the organization. The surveys focus on the three learning blocks. The findings are tallied using statistical tools. The findings of one department or group are compared with the findings of other groups or department within the organization. The conclusion generated from the statistical outcomes (Garvin et al., 2008). Question 4 The article generates several conclusive findings (Garvin et al., 2008). Leadership must be coupled with other activities to ensure success in the learning organization. Asking open- ended questions, hearing blame-absent feedbacks, accepting several options (especially opposing views) enhances learning organization’s successes. Next, organizations need tailor made diverse learning organization strategies. Further, comparing the learning organization outputs of different departments or groups will enhance the learning organization’s outputs. Furthermore, learning in the organization has many dimensions. All possible factors that will affect the learning organization must be taken into account. The factors include business processes, people, customers, laws, and other inputs. Question 5 The managers can significantly learn from the article (Garvin et al., 2008). The article discusses the meaning of the learning organization. The learning organization creates new relevant knowledge. Next, the learning

Cultural self assessment Assignment Example | Topics and Well Written Essays - 250 words

Cultural self assessment - Assignment Example The behavior increases the family bond as individual are able to appreciate each member of the family regardless of their relation. Personally, I value family than any other social aspect. I value the slightest family bond to any other person. My religious life has also been massively influenced by my cultural traditions. In Ghana, religion makes up a significant part the social structure. Religious practices are considered mandatory. The same impact on religion has been made on my life. I value my religion as I consider taking part in practices even if I am away from my family. Considering the impact of my cultural traditions in my life, I still continue to carry on these practices. The cultural traditions are a significant part on my social life. In addition, they are a source of my social identity regardless of distance from my native country. Carrying on these traditions enables me to appreciate my country and cultural identity (Benhabib, Shapiro & Petranovich,

Identify the key influences on the health and well being of Young Essay

Identify the key influences on the health and well being of Young people 13-19 years in westminster - Essay Example There have been major progresses in the Governments approach to children and young people since that report was published; and systems are currently in place to make certain a further planned and coherent approach to childrens issues throughout the Government. The Quality Protects Program to make better life chances of children in public care led the way for the participation of children and young people in its design. The fresh Connexions personal consultant service for 13 to 19yrs. has been made in full discussion with young people The Department for Education and Skills has discussed with young people on its new White Papers to renovate Secondary Education for 14-19 year olds. The core values go together with the standards for children and young peoples involvement in local democratic system set out in the National Youth Agency. The Children and Young Peoples Unit is taking step to make this sort of excellent practice the standard. The Government has decided to follow clear ideology for engaging well with children and young people and the Sections in charge for strategies and services for children and young people in England will make yearly evaluated action plans to show the progress checked against consistent values (Joint Committee On Human Rights, 2003). The Westminster is a City that makes sure everyone’s health and well being. The agenda for a Healthier Westminster stand for more incorporated approach to setting up local services to support work around enhancing the health of local people. This merges work in the region of both the Health Improvement and Modernization Plan, and the Community Care Plan. As a result of combining these two plans together, the Program attracts all the local ideas which are intended to help improve health. This is a broad vision than looking at precise priorities for rising health and social care services and comprises data about the wider determinants of health in Westminster. to improve access to health and social

Health Economics Essay Example | Topics and Well Written Essays - 500 words

Health Economics - Essay Example For Getzen, some HMOs may be undertaking risk selection by only accepting healthy patients in order for them to create optimum profit. Some of them find it advantageous on their part to reduce services or quality of care once there would be implementation of easy savings from discounting and substitution. In other words, HMOs have always to mean business and this leads them to expect to experience favorable or adverse selection. Considering the number of commercial employees, especially in large companies, there might be great savings on both the demand and supply sides due to substantial numbers in a group, and the risk selection process might not be that tough on the part of HMOs to ward off loss and optimize profitability. This is due to the fact that working individuals in various large companies are on a regular basis had to ensure their health safety to optimize their productivity. As a result, the commercial employee benefit market in states with large number of immigrants and service-based economy may have higher percentage of insured individuals compared to those in states with strong unionized industrial and manufacturing base (Kovner & Knickman, 2011, p.33). As a result, Kovner and Knickman added 80 percent of uninsured are in families with either full or part-time workers in small businesses. This would particularly increase HMOs magnitude of selection bias in this type of commercial employee benefit market, as they would also consider the profit they could create. On the other hand, there would be more profit for HMOs if less medical care is provided (Holcombe, 1995, p.136). Considering the need for medical services in the US is an upward spiral especially for low-income population (Andersen, Rice & Kominski, 2007, p.22), the medical market on the part of HMOs should have wider scope of risk selection process and even bias at some point just to ensure profitability will not be set aside. 2. What incentives

You can choice Essay Example | Topics and Well Written Essays - 250 words - 1

You can choice - Essay Example Agricultural bio-systems and structures are among the most promising solutions that can be applied on the problem. There is increased need to address the issue of global warming especially considering that global population is increasing by the day. More importantly, urbanization and industrialization is increasing the rate of global warming. Therefore, more focus on measures to control the rate of global warming to ensure that the future ecosystem is sustainable. However, agricultural biosystems seems to be one of the ways in which the issue of global warming can be addressed. By articulating different aspects of agricultural biosystems, it is possible to realize long-term benefits in the efforts of controlling global warming. It is important to consider that global warming has largely been caused by human activities. Therefore, it will take human efforts to reverse the effects and control the present rate. Otherwise, it will be increasingly difficult for the future generations to survive in this world if meaningful efforts are not applied at the

Othello, the Moor of venice Essay Example | Topics and Well Written Essays - 500 words

Othello, the Moor of venice - Essay Example These lines indicate Desdemona's interest in Othello as a man. She finds him fascinating and worthy of love and makes the first move. As Othello says later, "she had eyes and chose me" (3.3.189). Othello also explains the mutual nature of their regard: "She loved me for the dangers I had passed, and I loved her that she did pity them" (1.3.167-8). Desdemona sees Othello as the bravest and most accomplished man she has ever met. Othello, an outsider in Venice, is flattered that his life could affect a woman this way. He does not expect to be admired-he has fought for everything he ever received-and Desdemona's love binds his heart. Without the forces working against them, they have a strong basis for a successful marriage. Othello is not easily brought to suspect betrayal. When Desdemona first asks for a favor, Othello tells her twice, "I will deny thee nothing" (3.3.76; 3.3.84). Without Iago, there is no doubt in his mind as to Desdemona's motivation. In the same scene, he remarks to himself, "when I love thee not, Chaos is come again" (3.3.91). This line gives us insight into Othello's heart. Desdemona is, to him, a goddess of civilization who transforms him from a despised Moor into an honored Venetian. Until Iago skews the balance, Othello's love for Desdemona is stable and grateful. Even when Iago plants seeds of doubt in his mind, Othello has trouble believing Iago's lies.

Simmons Leading changes Essay Example for Free

Simmons Leading changes Essay General Overriding Problem: The case mainly focuses on the challenges of implementing change programs at Simmons. There is resistance to change. (The sources of resistance are derived from both individuals and organization.) Besides the resistance to change, the dominant organizational culture exists within Simmons is not in consistency with the Simmons’ core organizational culture. This inconsistency further hinders the Simmons from implementing change programs smoothly. Simmons is in its toughest period of time ever in history. There are several forces (Economic shocks are the most important stimulants to change at Simmons) that require Charlie Eitel, CEO of Simmons, to implement comprehensive change program, i. e. the Great Game of Life (GGOL). However, the implementation of GGOL faces huge resistance. Individual Sources: Firstly, there is fear of the unknown among the employees and the top managers. The outcomes of GGOL are uncertain, employees feel like their safety and job securities are threatened, especially resignation of plant managers has already happened. Secondly, individuals have habits. They prefer to work in their accustomed ways. When people are confronted with the GGOL, they may think that they will shift from the environment they are habituated to. This thought will result in resistance to change. Thirdly,economic factors also trigger resistance to change. GGOL is ambiguous to most employees and managers at Simmons. They are concerned about the changes in their job tasks or established work routines. They may not be able to perform new tasks to their previous standards, especially when their pay is closely associated with productivity. Organizational Sources: Firstly, Structural inertia acts as a counterbalance to sustain stability and resist changes. The culture shared by a majority of the Simmons’ members (i.e. dominant culture) is inconsistent with the original organizational culture established by the company. The  inconsistency will further strengthen structural inertia to resist change. For example,leadership style at Simmons will be changed completely. Simmons leadership vision states that they encourage new ideas, open communication, and having fun. However, the dominant culture deviates from the core values. The actual leadership is very much motivation through intimidation. GGOL will completely revamping the company’s dictatorial form and ensure that Simmons is running on the right track. Secondly, there are resources constraints. Organizations need adequate financial resources to change. However, Simmons is not in this case. Simmons is on the brink of bankruptcy! To some extend, group inertia is also taking place. Some employees resist GGOL simply because their groups which they belong to resist the GGOL. Analysis and Evaluation: Implementation of the GGOL is controversial. It really does teach staff at Simmons how to work together and share information. The GGOL is made up by 4 phases. The first phase focuses on participation. This phase encourages employees to participate discussion. It helps improve the communication within the organization and make employees get involved. Resistance to change is positive since it leads to open discussion and debate. Change agents also take advantages of it to explain the change effort, i.e. process consultation. The second phase is aiming at establishing trust and support by using team building. The first two phases are unfreezing step inLewin’s three-step model. The last two phases are interrelated. They are usingintergroup development technique to look for the causes of disparities and try to solve them (Movement and Refreezing step in Lewin’s model). Ultimately, the staff’s full potential at work is realized. Recommendations: After Charlie Eitel is designated as CEO, he took series actions. These actions include redesigning the Beautyrest, spending $9 million on ad campaign, reorganizing management and Simmons’ structure, and implementing the GGOL. Most of them are successful. However, Eitel and the top management team still don’t come up with a plan about how to manage the company through  these tough times. Since the experiment result at Charlotte Plant is fantastic, I would like to recommend Eitel to stick on his original plan, i.e. adopt the GGOL. Creating a culture for change is the centre of this plan. I suggest the following improvements. They should pay more attention on the employees’ feedback. Feedback is incredibly essential for accessing attitudes held by employees, identifying discrepancies among employees, and solving these differences. Survey feedback also makes employees feel their opinions are valued by the company. Simmons should also adopt appreciative inquiry AI. AI focuses on an organization’s successes rather than its problem. Employees at Simmons are criticized excessively. Managers should identify the strengths of Simmons, and try to make best use of their comparative advantages and bypass the disadvantages. AI also allows managers and employees to write action plan and develop implementation strategies together. The more people engaged in, the more they are willing to implementing change. Structure of Simmons should also be reorganized. Eitel should try to de-emphasize hierarchical authority and control. This makes Simmons be more effective incommunication. Generally speaking, communication is high and effective in innovative organizations. In addition, de-emphasize hierarchical authority ensurespower equalization, which is beneficial to organizational development. â€Å"Leading Change at Simmons† shows the importance of Organizational Behavior, having a culture that respects its employees and having a transformational leader who has a clear vision for the company. Problem Statement Simmons has lost three of its most important clients due to the economic depression post the 9/11 attacks. Its products are giving off unpleasant odor because of a low quality raw material supplied by one of its suppliers. Problems As one goes through the case, one realizes that there are a lot of problems that the company is facing, right from the lack of a clear vision to the extent of one manufacturing unit competing with the other. It clearly reflects the following sources of conflict 1.Incompatible goals 2.Diversity Analysis of Problems †¢Role Conflict and No Organizational Structure One of the major problems that the company was facing was that there was no clear organizational structure for the company and role conflict existed. Most of the associates were reporting to the General Managers, who were basically Sales Managers, and who, according to Eitel, didn’t have business acumen. All the manufacturing units were running as per the General Manager’s whims. This Control vs. Commitment (Exhibit 1) situation can be clearly seen when Bob Hellyer, President and Director of Simmons, tells Eitel about the manufacturing units at Janesville and Charlotte. Lack of Implementation of Vision and Values Simmons already had four core values in place; three more were added when Eitel joined the company as its CEO. It seems that no one was following the â€Å"Simmons Code of Ethics† or the â€Å"Simmons Values.† No one was maximizing the â€Å"opportunity† to think or share and listen to others; Short Term Goals: 1.Discard the mattresses that were made up of bad foam and sue the supplier. 2.Report and communicate with partners and employees Long Term: 1.Restructure 2.Bill Wagnar should be kept in the same role.

Importance of Corporate Governance for Fraud Prevention

Importance of Corporate Governance for Fraud Prevention In the era of globalisation, corporate scandals are no longer shocking news in corporate world. A recent corporate fraud has happened in Paris in Societe Generale Bank, where an employee committed a fraud of GBP 3.7 billions. It is not a new story for the corporate world as it has seen cases of BCCI (Bank of credit and commerce internationals), Polly Peck, Maxwell, Allied Irish Bank, Enron, Pamalat, Barings Bank, WorldCom, Xerox and many more. Frauds in Financial statements have become a common area of frauds now days. These frauds have increased the responsibility of auditors and also of government to pass effective laws so that scope of committing frauds can be reduced. Corporate Governance in any company is for that only. Companies are bounded by corporate governance guidelines and procedures, so that chances of fraudulent activities can be reduced. Meaning of Corporate Governance According Cadbury Report 1992, Companies are controlled and directed by the system of corporate governance. In companies, Corporate Governance is the responsibility of Boards of Directors. Auditors and directors are elected and appointed by the consent of shareholders, which give them the feeling of satisfaction that a suitable corporate governance system is working to reserve their rights and benefits. Corporate governance set the relationship between management, board, shareholders and other stakeholders. Corporate governance enables directors and auditors to manage their responsibilities towards shareholders and wide stakeholders of the company. In contrast , corporate governance increased the confidence of shareholders that they will get an reasonable return on their investments, whereas for the stakeholders it provide the assurance that company manages its impact on society and environment in a responsible manner. Corporate governance include the combination of various laws, regulations, listing rules and voluntary private sector practices that facilitate the company to draw more capital, execute efficiently, generate profit and meet other legal obligations and general societal expectations. Corporate governance is about commitment to values, about ethical business conduct and about making a distinction between personal and corporate funds in the management of a company. Corporations pool capital from a large investor base both in the domestic and in the international capital markets. In this context, investment is ultimately an act of faith in the ability of a corporations management. When an investor invests money in a corporation, he expects the board and the management to act as trustees and ensure the safety of the capital and also earn a rate of return that is higher than the cost of capital. In this regard, investors expect management to act in their best interests at all times and adopt good corporate governance practices. Need for Corporate Governance A corporation is a body of various stakeholders include customers, employees, investors, vendors, government and society. It is necessary for any corporation to present transparent and true pictures to its shareholders. Today, this has become essential for the business world because every company wants to enter into the global capital and also want to draw the attention and also keep hold on the top human capital from different areas of the world. Company want the partnership with different vendors on the big collaborations and want to be in harmony and peace with the rest of the community. A corporation will never succeed until and unless it demonstrate and also it embrace the ethical conduct. Corporate governance in business is in relation to the ethical conduct. Here, the ethic is very much concerned about the different codes of principles and the values which help the person to differentiate and choose between the right and the wrong and as a result, help to choose from the other alternatives. Additionally, the parties which are involved in the conflicting interest give rise to the ethical dilemmas. Therefore, keeping in mind the principles which are totally based on culture, context and the value of the company, the manager make their decisions. For a business which is running good, it is very much important that it always go in the good direction by keeping the stakeholders expectations in mind. Well, corporate governance is not just the law,it is much more than the law and it cant be imposed and run by the legislation alone because its different parts comes from the managements mindset and their culture. The affairs of the organisation are conducted by the corporate governance in order to provide the fairness for all of the shareholders which comes from these three- accountability, integrity and the openness. To certify standards, the legislation can and should put down a general framework which is the â€Å"form†. The integrity and the credibility for process will finally determined by the â€Å"substance†. The substance is inevitably connected to the managements ethical standards and mindset. The corporations should always need to identify that the prosperous development and the growth of the company require the full support and the cooperation from their stakeholders and this is possible only when the corporation is following the best practices of the corporate governance. Here for shareholders, management of the corporation needs to perform as the trustees and avoid the difference of benefits among various sections of stakeholders, particularly between the owner and the other stakeholders. Corporate governance becomes the key element in order to improve the firms economic efficiency. With the help of the corporate governance, the corporations keep in mind the interest of the ample series of constituencies, and also of community where they are operating. Additionally it ensure that the board is accountable for shareholders. As a result, it guarantees that the corporations as a whole are operating for the benefit and profit of society. Though by taking the advantage of asymmetry between the shareholders, huge amount of profit can be made in short run, and by balancing the interest of all shareholders itself guarantee the growth and the survival of the corporation in long run. Heavy cost can be incurred if there is failure to execute the good governance which can be the regulatory problems. Many proofs suggest that those corporations or companies which do not implement and follow the significant corporate governance measures can give the considerable risk premium in the public market at the time when it is competing for the limited capital. In recent times, the analysts of the stock market received a high appreciation from the market for showing the relationship between the returns and the governance. For this context, different reports do not only talk about the governance in common but they also recommend the explicit alter investment which is totally based on weakness or strength of the infrastructure of the corporate governance of the company. The best thing about the credibility which is given by the procedures of a good corporate governance is that it help to provide the confidence of clients (national international) in order to draw more ‘pat ient, the capital for the long term, and also help to cut down the capital cost. All this increased attention is because of arises of the financial crises in different parts of the world. Like, the financial crises in Asia brought the attention of the corporate governance subject in Asia. Recently, the scandals in the US also disturb the unsatisfied corporate landscape and peace which are unexpected in a sense. These scandals lead to a new set of initiatives in corporate governance in US and trigger a new discussion in the United Kingdom with European union and in the rest of the world. Meaning of Financial Statement Fraud Financial statements are the picture of financial position of a company which includes balance sheet, profit and loss accounts, and trading accounts. Frauds here, means deliberately and intentionally done activities for self interest and cheating the second party. Under the Statement of Auditing Standards (SAS) 1101, it is stated that â€Å"Auditors should plan and perform their audit procedures and evaluate and report the results thereof, recognizing that fraud or error may materially affect the financial statement†. Accounting to Benny K.B. Kwok 2005, Misstatements in financial statements can arise from either by error or by fraud. Error refers to an involuntary misstatement in financial data of a company which include omission of an amount or disclosure, such as A mistake in gathering or processing data from which financial statements are prepared; An incorrect accounting estimate arising from oversight or misinterpretation of facts; and A mistake in the application of accounting principles relating to measurement, recognition, classification, presentation or disclosure. The usage of both the dishonesty to get the financial advantage illegally and intentionally falsification also disturbing the statements, leads to fraud which can be done by any person from the management, or the employees or any third party. In fraud following things involves â€Å"Falsification or alteration of accounting records or other documents; Misappropriation of assets or thefts; Suppression or omission of the effects of transaction from records or documents; Recording of transaction without substance; Intentional misapplication of accounting policies; Wilful misrepresentations of transactions or of the organizations state of affairs. Financial reporting in the UK is based on three principles:- Companies Act 2006 Accounting standards or specifically Statements of Standard Accounting Practices(SSAP) and Financial Reporting Standards And the requirements of the Stock Exchange. Companies Act 2006 According to the Companies Act 2006, accounting records maintained by every company must: Be sufficient to show and explain the companys transactions; Disclose with reasonable accuracy at any time the financial position of the company at that time and Enable the directors to ensure that any Profit and Loss account or Balance Sheet gives a true and fair view of the companys financial position. Accounting records should contain day to day entries of all transactions, full record of companys assets and liabilities and full information regarding companys stock. According to Companies Act 2006 under section 145(B), if the financial statements of a company do not meet the requirements of the Act, the court may ask for revised financial statements and the cost of re- preparing financial statements would be bear by the party in abuse of preparing defective or false financial statements. Accounting Standards In UK, all accounting standards till 31 July 1990 used to be called Statements of Standards Accounting Practice (SSAP) which was formulated by the Accounting Standard Committee (ASC). SSAP was then gradually replaced by Financial Reporting Standards (FSA) produced by the successor to the ASC, the Accounting Standards Board (ASB). UK Accounting Standards laid down the guidelines regarding how particular types of transaction should be reflected in the financial statements of a company to present true and fair picture of companys financial position. The stock exchange listing requirements-Yellow Book Rules which governed the listing of securities of the stock exchange in the UK are known as the Yellow Book. According to Yellow Book, listed companies are required to publish their financial statements within six months of their financial year end. Most of the listed companies however, publish their financial statements quarterly. It is necessary from the point of view of shareholders because shares of companies are in the hands of general public and they need continuous information regarding firm financial position so that they can take right investment decision. According to SSAP December 1999, â€Å"the objective of financial statements is to provide information about an organizations financial performance and financial position that is useful to a wide range of readers for assessing the stewardship of the organizations management and for making economic decisions†. For the purposes of this discussion, we are talking about financial statement fraud in a major public company context; a context that can affect confidence in the financial system. We are not talking about what might be called internal fraud or a great many other types of dishonest conduct in corporate life. This is about projecting a false state of affairs on a large scale and in a very public context. DEFINITIONS Corporate governance is about promoting corporate fairness, transparency and accountability Wolfensohn, president of the Word bank, June 21, 1999. Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance, OECD April 1999. OECDs definition is consistent with the one presented by Cadbury [1992]. According to Elliot and Willingham, â€Å"financial statements fraud is management fraud, the deliberate fraud committed by management that injures investors and creditors through materially misleading financial statements†. Key words used in the research: Currency option: In this option the possessor has the right to sell or buy the currency at a particular phase of the time at a particular price. In this the possessor doesnt have the obligation. Currency forward: The prices are locked in this contract so that the counterparties can sell or buy the currency on the upcoming or future date. Here the possessor who holds the contract are obliged to sell or buy the currency at a particular future date, at the particular quantity and on a particular price. These transactions are also called as outright forward currency transactions. Option: when the option is exercised to earn profit then it is known as in- the-money option. Call option: In this type of option, the buyer who wants to buy any assets, commodities etc. has the right to buy at a particular period of time but he is not obliged, whereas the seller is highly obliged to sell the assets etc. at a particular time to the buyer. A premium has to be paid by the buyer to hold this right. This option is carried out when the strike price is below the price of the market of the agreed commodities. Put option: In this option, the seller has obligations to buy the commodities, assets etc. from the buyer whereas the buyer has the right, but there is no obligation, to sell the agreed commodities, assets etc. at a particular period of time for a particular price. This option is carried out when the strike price is more than the price of the market of the agreed commodities. Prime broker: The person who settle down the cash and security for their clients in the financial market by charging them fees is known as the prime broker. They manage the money of their clients by using different strategy in the market. Research Questions and Objectives Research Questions Financial statements frauds -ethical or technical issue? How firms manipulate their financial statements? What are the motives of financial frauds other than monetary? What is the role of corporate governance in controlling these frauds? Research Objectives: To analyse the major areas of frauds. To examine role of top management in fraudulent practices. To analyse the efficacy of various acts and rules passed for enhanced corporate governance. To analyse the importance of financial statements in investment decision making. To explore the causes and consequences of financial statements frauds. Scope of study: Research study will be restricted to European countries financial statement frauds as US market is more explored than European market. Research will examine and critically analyse the case study of Ireland based bank named Allied Irish Bank. Remaining chapter shall follow the following planned strategy: Chapter Two: Literature review: It will cover 3000 words and include journals and articles citation. Chapter Three: Research Methodology: It will cover 1500 words. This section will give idea of data collection and also briefly explain limitation attached to it. Chapter Four: Data Analysis: This section will evaluate and analyse the data and follow the discussion. Chapter Five: Conclusion and Recommendations: This section finally concludes the research and provides recommendations. CHAPTER TWO Literature Review 2.1.1. Agency problem and Corporate Governance 2.1.1.1 Separation of ownership -origin of agency problem Agency problem resulted from separation of ownership from control (Berge Means 1932; Jensen Meckling 1976) is still prevailing around the world. Findings have proved that firms having weaker corporate governance policies and structure face greater agency problems; which allow senior managers to cook their recipe of extracting more private benefits and finally firm perform worse at all levels (Core at al. 1999). Evidence for such a weak corporate governance structure and higher agency problems can be found from Asian Financial Crisis in 1997. At the time Asian Crisis 1997, firms which had good corporate governance structure provided better protection to shareholders especially to minor shareholders and performed better during the crisis (Joh 2003 and Mitton 2002). In countries like USA and European countries especially UK, agency problems are higher as evidenced from corporate scandals in USA and UK for example Maxwell Corporation (1991), Polly Peck (1991), BCCI (1991), Enron (2001) , Barings Bank (1995), Parmalat (2003) and many more. The recent scandal happened in Societe Generale Bank of Paris 2008, in this also agency problem was the main reason for the frauds committed by the employer of the Societe Generale Bank of Paris. An Agency problem is very crucial problem which had taken birth during 19th century. Agency theory is defined as a â€Å"contract under which one party (the principal) engages another party (the agent) to perform some service on their behalf† (Jensen and Meckling 1976). The problems arises when the agent do not work in the welfare of principal. More cases of frauds, where involvements of companys top management were high, coming into light and the simple reason is principal agency problem. In the case of HealthSouth, CEO Richard Scrushy had instructed senior managers to show fraudulent income of $2.5 billion in order to meet Wall Street expectation. 2.1.1.1.1 Agency Cost Agency costs are another issue which is bear by the principal for the frauds committed by the agent. The result of agency problem is reflected in companys share price which can be seen as the loss to shareholders in terms of declined in the price of shares in stock exchange.Jensen and Meckling (1976) explained agency costs as the sum of monitoring costs, bonding costs, and residual loss. Monitoring cost:- In UK companies are required to follow Cadbury (1992) and Greenbury (1995) reports for corporate governance. Monitoring cost are paid by the principal to monitor the behaviour of agents. Monitoring cost generally include costs of conducting auditing, writing executive compensation contracts and sometimes cost of firing the fraud employees and other top managers or executives. All these costs are paid by the principal, but Fama and Jensen (1983) argued that these agency costs which are initially born by the principal, ultimately borne by the agents as the compensation of agents are adjusted to cover these costs. Some researcher further argued that monitoring will restrict the managerial initiative (Burkart, Gromb and Panunzi 1997). Criticisers of Cadbury Report (1992) have argued that high level of monitoring may restrict the managerial entrepreneurship. Bonding Costs As argued by Fama and Jensen( 1983), monitoring cost ultimately bear by agents which need to set up structure that will act in interest of shareholders or principal , the cost of establishing these set up or system is known as bonding costs. These costs are not always financial in nature; it may include additional information provided to shareholders. Denis (2001) further argued that â€Å"the optimal bonding contract should aim to entice managers into making all decisions that are in the shareholders best interests†. In UK, bonding structure which is imposed on closely held companies management, require companies to distribute all income after meeting all business expenses. Earning retention is big problem in UK; the mechanism of bonding may reduce the scope of this problem. Residual Loss â€Å"Residual loss arises because the cost of fully enforcing principal-agent contracts would far outweigh the benefits derived from doing so. Since managerial actions are unobservable ex ante, to fully contract for every state of nature is impractical. The result of this is an optimal level or residual loss, which may represent a trade-off between overly constraining management and enforcing contractual mechanisms designed to reduce agency problems.† (Patrick McColgan 2001:8). 2.1.1.2 Stewardship theory Agency theory is more dominant in the perspective of corporate governance mechanism, but this view has been criticized by many writers (Hoskisson et al. 2000; Blair 1995; Perrow 1986). Agency theory had limitation in explaining sociological and psychological involved in principal agent conflicts (Davis Thompson 1994; Davis et al.1997). Stewardship theory assume mangers as good stewards of the firms. Managers act diligently in order to attain high corporate profits and shareholders returns (Donaldson Davis 1994). In an empirical study performed by Tian and Lau 2001 in Chinese shareholding firms, they find stewardship theory has received strong support in comparison to agency theory. Further Phan 2001 explained that â€Å"whether the assumptions of Agency Theory can be generalised to emerging markets, with their different sociological, economic, and developmental fundamentals, remains an important research question†. In summary, agency theory has its roots in industrial and organisational economics. Agency theory assumes that behaviour of human being is opportunistic and selfish. Therefore, the theory recommends strong director and shareholder control. It suggests the fundamental function of the board of directors is to control managerial behaviour and try to ensure that managers act in the best interests of shareholders. 2.1.2 Review of Corporate Governance reports In this section, international reports on corporate governance will be critically reviewed which were published in last decades. The international reports considered in this section are as follows: â€Å"Report of the Committee on the Financial Aspects of Corporate Governance† (Cadbury Report, 1992) â€Å"Where were the Directors? Guidelines for Improved Corporate Governance in Canada† (Dey Report, 1994) The General Motors Corporation Guidelines (GMC, 2001) â€Å"Committee on Corporate Governance† (Hampel Report, 1998) â€Å"OECD Principles of Corporate Governance† (OECD Report, 1999) Sarbanes- Oxley Act 2002 After the unexpected corporate scandals of renowned companies like Maxwell (1991), Polly Peck (1991), and BCCI (1991) among others in the UK, the committee for corporate governance under the guidance of Sir Adrian Cadbury along with Financial Reporting Council (FRC), the London Stock Exchange (LSE), and the other accountancy profession has been formed to address corporate governance issues. This report was known as Cadbury report which was first report in UK focused on the aspect of corporate governance such as financial reporting and reviewed the role of boards and auditors. This report was published in 1992. The Cadbury committee report finally draw two major recommendation for the structure of UK corporate board. Cadbury report suggests at least three non executive directors in the board and two of them should be independent from management. The positions of chairman and CEO should not hold by the same person. The purpose behind this set up was to reduce the individual dominance a nd ensuring higher level of monitoring for corporate board by introducing more independence. Beasley (1996) and Dechow et al. (1996) found that â€Å"firms with more independent boards are significantly characterised by a lower likelihood of financial statement fraud and earnings management†. In Canada, during 1994 Dey report was published. This report was the first fully fledged report on corporate governance which a company should follow in order to list on stock exchange. Toronto stock exchange (TSE) adopted these guidelines in 1995 which were laid down by the Dey report. All TSE listed companies required to provide the difference in their corporate governance guidelines and guideline laid down by the Dey report. After Dey Report 1994, other similar reports in other jurisdiction have been published. General Motors Corporation (GMC) in USA published its own corporate guidelines in 1994 after criticising by the shareholders regarding poor company performance and doubtful board practices. These guidelines were developed with consent of GMC board, its shareholders and other activists for corporate governance. These guidelines were welcomed by the institute California Public Employees Retirement System (CalPERS) and by the industry. GMC guidelines become the benchmark in USA for corporate governance. In UK, during 1998, Hampel Committee was formed to review the recommendations of Cadbury report (1992) and the Greenbury report (1995) relating to executive remuneration. The Hampel committee was also formed to cover some gaps by these two reports i.e. Cadbury report and Greenbury report. Hampel report suggests that good corporate governance goes beyond prescribed corporate structures. According to Hample Report (1998:15) on Corporate Governance Sir Hample â€Å"recommend that companies should include in their annual report and accounts a narrative statement of how they apply the relevant principles to their particular circumstances. Given that the responsibility for good corporate governance rests with the board of directors, the written description of the way in which the board has applied the principles of corporate governance represents a key part of the process†. Hampel report drew attention for the approach of box ticking which is a serious issue for corporate governance . It also examined the implementation of Cadbury and Greenbury report and suggested more clear recommendations on policies of remuneration, accountability and auditing. During 1999, Organisation for Economic and Co-operation Development (OECD) laid down principles of corporate governance for the listed companies of member countries of OECD. It cover main subjects areas like rights and equitable treatment of shareholders, role of stakeholders in corporation structure, disclosure and transparency of financial facts and figures and majorly role and responsibilities of board. OECD guidelines become starting point for local policy makers of corporate governance. After the ,shocking scandals of Enron and WorldCom, US congress along with NYSE (New York Stock Exchange) passed the reforms to address conflicts of interest and redefined relationship between companies and auditors. This reform was known as the Accounting Industry reform Act 2002 which is widely known as Sarbanes Oxley Act 2002. The main purpose of this act was to enforce the independence of external auditors. The act also reinforced duties and responsibilities for CEOs and CFOs by imposing strict penalties for misrepresenting companys quarterly and annual reports. The penalty for misrepresentation was personal fines of US$ 1 million or imprisonment up to 10 years or both. Sarbanes Oxley Act has intense effect on the corporate governance policies on US and rest of the world. NYSE also imposed additional requirement for listed companies, under which listed companies must have independent directors in majority and must disclose business code of conduct and ethics for directors, office rs including managers at all level, and employees. Whittington(1993) and Melis, (2004a) argued that â€Å"corporate financial reporting and corporate governance systems are highly correlated, with any improvement in either system having a positive influence on the other, and vice versa† Combined code issued in 2006 replaces the combined issued in 2003. Financial service authority of UK, require listing companies to be obliged by the combined code 2006 and carry out consultation before listing. This new code contains main principles and provisions. Combined code 2006 asks listed companies to make a disclosure statement for code and that should be in two parts. Some of the provisions are not or less relevant for small or new listed companies. Also some provisions do not apply to companies below FTSE 350. 2.1.3 Global findings for adoption of corporate governance guidelines According Stephanie Maier (EIRIS 2005:1) findings, â€Å"Only 25% of US companies separate the roles of chairman and CEO compared with at least 50% forcompanies in other developed economies. Swiss boards have the highestpercentage of independent directors(81%) Germany, Austria and Japanall have less than 10%. Only 4% of companies in Japan haveaudit committees comprising amajority of independent directorscompared to over 95% in the USA,Canada, the Netherlands,Luxembourg, the UK and Ireland†¢ Only 22% of companies in Singaporeand 25% of companies in Hong Konghave meaningful codes of ethics†. Board size: According to EIRIS 2005, average board size is minimum in New Zealand (7.2) and maximum in Germany (22.8). USA and UK comes at rank 7th and 8th with average board size of 10.7 and 11.4 respectively ( see appendices for details). Higgs Review (2003) suggested â€Å"An effective board should not be so large as to become unwieldy. It should be of sufficient size that the balance of skills and experience is appropriate for the requirement of the business and that changes in the boards composition can be managed without undue disruption†. Separation of ownership and CEO According to findings by EIRIS 2005, in UK nearly 97% separate the ownership under unitary board structure whereas in US only 25% companies separate the ownership under the unitary board structure. In Ireland and Luxemb Importance of Corporate Governance for Fraud Prevention Importance of Corporate Governance for Fraud Prevention In the era of globalisation, corporate scandals are no longer shocking news in corporate world. A recent corporate fraud has happened in Paris in Societe Generale Bank, where an employee committed a fraud of GBP 3.7 billions. It is not a new story for the corporate world as it has seen cases of BCCI (Bank of credit and commerce internationals), Polly Peck, Maxwell, Allied Irish Bank, Enron, Pamalat, Barings Bank, WorldCom, Xerox and many more. Frauds in Financial statements have become a common area of frauds now days. These frauds have increased the responsibility of auditors and also of government to pass effective laws so that scope of committing frauds can be reduced. Corporate Governance in any company is for that only. Companies are bounded by corporate governance guidelines and procedures, so that chances of fraudulent activities can be reduced. Meaning of Corporate Governance According Cadbury Report 1992, Companies are controlled and directed by the system of corporate governance. In companies, Corporate Governance is the responsibility of Boards of Directors. Auditors and directors are elected and appointed by the consent of shareholders, which give them the feeling of satisfaction that a suitable corporate governance system is working to reserve their rights and benefits. Corporate governance set the relationship between management, board, shareholders and other stakeholders. Corporate governance enables directors and auditors to manage their responsibilities towards shareholders and wide stakeholders of the company. In contrast , corporate governance increased the confidence of shareholders that they will get an reasonable return on their investments, whereas for the stakeholders it provide the assurance that company manages its impact on society and environment in a responsible manner. Corporate governance include the combination of various laws, regulations, listing rules and voluntary private sector practices that facilitate the company to draw more capital, execute efficiently, generate profit and meet other legal obligations and general societal expectations. Corporate governance is about commitment to values, about ethical business conduct and about making a distinction between personal and corporate funds in the management of a company. Corporations pool capital from a large investor base both in the domestic and in the international capital markets. In this context, investment is ultimately an act of faith in the ability of a corporations management. When an investor invests money in a corporation, he expects the board and the management to act as trustees and ensure the safety of the capital and also earn a rate of return that is higher than the cost of capital. In this regard, investors expect management to act in their best interests at all times and adopt good corporate governance practices. Need for Corporate Governance A corporation is a body of various stakeholders include customers, employees, investors, vendors, government and society. It is necessary for any corporation to present transparent and true pictures to its shareholders. Today, this has become essential for the business world because every company wants to enter into the global capital and also want to draw the attention and also keep hold on the top human capital from different areas of the world. Company want the partnership with different vendors on the big collaborations and want to be in harmony and peace with the rest of the community. A corporation will never succeed until and unless it demonstrate and also it embrace the ethical conduct. Corporate governance in business is in relation to the ethical conduct. Here, the ethic is very much concerned about the different codes of principles and the values which help the person to differentiate and choose between the right and the wrong and as a result, help to choose from the other alternatives. Additionally, the parties which are involved in the conflicting interest give rise to the ethical dilemmas. Therefore, keeping in mind the principles which are totally based on culture, context and the value of the company, the manager make their decisions. For a business which is running good, it is very much important that it always go in the good direction by keeping the stakeholders expectations in mind. Well, corporate governance is not just the law,it is much more than the law and it cant be imposed and run by the legislation alone because its different parts comes from the managements mindset and their culture. The affairs of the organisation are conducted by the corporate governance in order to provide the fairness for all of the shareholders which comes from these three- accountability, integrity and the openness. To certify standards, the legislation can and should put down a general framework which is the â€Å"form†. The integrity and the credibility for process will finally determined by the â€Å"substance†. The substance is inevitably connected to the managements ethical standards and mindset. The corporations should always need to identify that the prosperous development and the growth of the company require the full support and the cooperation from their stakeholders and this is possible only when the corporation is following the best practices of the corporate governance. Here for shareholders, management of the corporation needs to perform as the trustees and avoid the difference of benefits among various sections of stakeholders, particularly between the owner and the other stakeholders. Corporate governance becomes the key element in order to improve the firms economic efficiency. With the help of the corporate governance, the corporations keep in mind the interest of the ample series of constituencies, and also of community where they are operating. Additionally it ensure that the board is accountable for shareholders. As a result, it guarantees that the corporations as a whole are operating for the benefit and profit of society. Though by taking the advantage of asymmetry between the shareholders, huge amount of profit can be made in short run, and by balancing the interest of all shareholders itself guarantee the growth and the survival of the corporation in long run. Heavy cost can be incurred if there is failure to execute the good governance which can be the regulatory problems. Many proofs suggest that those corporations or companies which do not implement and follow the significant corporate governance measures can give the considerable risk premium in the public market at the time when it is competing for the limited capital. In recent times, the analysts of the stock market received a high appreciation from the market for showing the relationship between the returns and the governance. For this context, different reports do not only talk about the governance in common but they also recommend the explicit alter investment which is totally based on weakness or strength of the infrastructure of the corporate governance of the company. The best thing about the credibility which is given by the procedures of a good corporate governance is that it help to provide the confidence of clients (national international) in order to draw more ‘pat ient, the capital for the long term, and also help to cut down the capital cost. All this increased attention is because of arises of the financial crises in different parts of the world. Like, the financial crises in Asia brought the attention of the corporate governance subject in Asia. Recently, the scandals in the US also disturb the unsatisfied corporate landscape and peace which are unexpected in a sense. These scandals lead to a new set of initiatives in corporate governance in US and trigger a new discussion in the United Kingdom with European union and in the rest of the world. Meaning of Financial Statement Fraud Financial statements are the picture of financial position of a company which includes balance sheet, profit and loss accounts, and trading accounts. Frauds here, means deliberately and intentionally done activities for self interest and cheating the second party. Under the Statement of Auditing Standards (SAS) 1101, it is stated that â€Å"Auditors should plan and perform their audit procedures and evaluate and report the results thereof, recognizing that fraud or error may materially affect the financial statement†. Accounting to Benny K.B. Kwok 2005, Misstatements in financial statements can arise from either by error or by fraud. Error refers to an involuntary misstatement in financial data of a company which include omission of an amount or disclosure, such as A mistake in gathering or processing data from which financial statements are prepared; An incorrect accounting estimate arising from oversight or misinterpretation of facts; and A mistake in the application of accounting principles relating to measurement, recognition, classification, presentation or disclosure. The usage of both the dishonesty to get the financial advantage illegally and intentionally falsification also disturbing the statements, leads to fraud which can be done by any person from the management, or the employees or any third party. In fraud following things involves â€Å"Falsification or alteration of accounting records or other documents; Misappropriation of assets or thefts; Suppression or omission of the effects of transaction from records or documents; Recording of transaction without substance; Intentional misapplication of accounting policies; Wilful misrepresentations of transactions or of the organizations state of affairs. Financial reporting in the UK is based on three principles:- Companies Act 2006 Accounting standards or specifically Statements of Standard Accounting Practices(SSAP) and Financial Reporting Standards And the requirements of the Stock Exchange. Companies Act 2006 According to the Companies Act 2006, accounting records maintained by every company must: Be sufficient to show and explain the companys transactions; Disclose with reasonable accuracy at any time the financial position of the company at that time and Enable the directors to ensure that any Profit and Loss account or Balance Sheet gives a true and fair view of the companys financial position. Accounting records should contain day to day entries of all transactions, full record of companys assets and liabilities and full information regarding companys stock. According to Companies Act 2006 under section 145(B), if the financial statements of a company do not meet the requirements of the Act, the court may ask for revised financial statements and the cost of re- preparing financial statements would be bear by the party in abuse of preparing defective or false financial statements. Accounting Standards In UK, all accounting standards till 31 July 1990 used to be called Statements of Standards Accounting Practice (SSAP) which was formulated by the Accounting Standard Committee (ASC). SSAP was then gradually replaced by Financial Reporting Standards (FSA) produced by the successor to the ASC, the Accounting Standards Board (ASB). UK Accounting Standards laid down the guidelines regarding how particular types of transaction should be reflected in the financial statements of a company to present true and fair picture of companys financial position. The stock exchange listing requirements-Yellow Book Rules which governed the listing of securities of the stock exchange in the UK are known as the Yellow Book. According to Yellow Book, listed companies are required to publish their financial statements within six months of their financial year end. Most of the listed companies however, publish their financial statements quarterly. It is necessary from the point of view of shareholders because shares of companies are in the hands of general public and they need continuous information regarding firm financial position so that they can take right investment decision. According to SSAP December 1999, â€Å"the objective of financial statements is to provide information about an organizations financial performance and financial position that is useful to a wide range of readers for assessing the stewardship of the organizations management and for making economic decisions†. For the purposes of this discussion, we are talking about financial statement fraud in a major public company context; a context that can affect confidence in the financial system. We are not talking about what might be called internal fraud or a great many other types of dishonest conduct in corporate life. This is about projecting a false state of affairs on a large scale and in a very public context. DEFINITIONS Corporate governance is about promoting corporate fairness, transparency and accountability Wolfensohn, president of the Word bank, June 21, 1999. Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance, OECD April 1999. OECDs definition is consistent with the one presented by Cadbury [1992]. According to Elliot and Willingham, â€Å"financial statements fraud is management fraud, the deliberate fraud committed by management that injures investors and creditors through materially misleading financial statements†. Key words used in the research: Currency option: In this option the possessor has the right to sell or buy the currency at a particular phase of the time at a particular price. In this the possessor doesnt have the obligation. Currency forward: The prices are locked in this contract so that the counterparties can sell or buy the currency on the upcoming or future date. Here the possessor who holds the contract are obliged to sell or buy the currency at a particular future date, at the particular quantity and on a particular price. These transactions are also called as outright forward currency transactions. Option: when the option is exercised to earn profit then it is known as in- the-money option. Call option: In this type of option, the buyer who wants to buy any assets, commodities etc. has the right to buy at a particular period of time but he is not obliged, whereas the seller is highly obliged to sell the assets etc. at a particular time to the buyer. A premium has to be paid by the buyer to hold this right. This option is carried out when the strike price is below the price of the market of the agreed commodities. Put option: In this option, the seller has obligations to buy the commodities, assets etc. from the buyer whereas the buyer has the right, but there is no obligation, to sell the agreed commodities, assets etc. at a particular period of time for a particular price. This option is carried out when the strike price is more than the price of the market of the agreed commodities. Prime broker: The person who settle down the cash and security for their clients in the financial market by charging them fees is known as the prime broker. They manage the money of their clients by using different strategy in the market. Research Questions and Objectives Research Questions Financial statements frauds -ethical or technical issue? How firms manipulate their financial statements? What are the motives of financial frauds other than monetary? What is the role of corporate governance in controlling these frauds? Research Objectives: To analyse the major areas of frauds. To examine role of top management in fraudulent practices. To analyse the efficacy of various acts and rules passed for enhanced corporate governance. To analyse the importance of financial statements in investment decision making. To explore the causes and consequences of financial statements frauds. Scope of study: Research study will be restricted to European countries financial statement frauds as US market is more explored than European market. Research will examine and critically analyse the case study of Ireland based bank named Allied Irish Bank. Remaining chapter shall follow the following planned strategy: Chapter Two: Literature review: It will cover 3000 words and include journals and articles citation. Chapter Three: Research Methodology: It will cover 1500 words. This section will give idea of data collection and also briefly explain limitation attached to it. Chapter Four: Data Analysis: This section will evaluate and analyse the data and follow the discussion. Chapter Five: Conclusion and Recommendations: This section finally concludes the research and provides recommendations. CHAPTER TWO Literature Review 2.1.1. Agency problem and Corporate Governance 2.1.1.1 Separation of ownership -origin of agency problem Agency problem resulted from separation of ownership from control (Berge Means 1932; Jensen Meckling 1976) is still prevailing around the world. Findings have proved that firms having weaker corporate governance policies and structure face greater agency problems; which allow senior managers to cook their recipe of extracting more private benefits and finally firm perform worse at all levels (Core at al. 1999). Evidence for such a weak corporate governance structure and higher agency problems can be found from Asian Financial Crisis in 1997. At the time Asian Crisis 1997, firms which had good corporate governance structure provided better protection to shareholders especially to minor shareholders and performed better during the crisis (Joh 2003 and Mitton 2002). In countries like USA and European countries especially UK, agency problems are higher as evidenced from corporate scandals in USA and UK for example Maxwell Corporation (1991), Polly Peck (1991), BCCI (1991), Enron (2001) , Barings Bank (1995), Parmalat (2003) and many more. The recent scandal happened in Societe Generale Bank of Paris 2008, in this also agency problem was the main reason for the frauds committed by the employer of the Societe Generale Bank of Paris. An Agency problem is very crucial problem which had taken birth during 19th century. Agency theory is defined as a â€Å"contract under which one party (the principal) engages another party (the agent) to perform some service on their behalf† (Jensen and Meckling 1976). The problems arises when the agent do not work in the welfare of principal. More cases of frauds, where involvements of companys top management were high, coming into light and the simple reason is principal agency problem. In the case of HealthSouth, CEO Richard Scrushy had instructed senior managers to show fraudulent income of $2.5 billion in order to meet Wall Street expectation. 2.1.1.1.1 Agency Cost Agency costs are another issue which is bear by the principal for the frauds committed by the agent. The result of agency problem is reflected in companys share price which can be seen as the loss to shareholders in terms of declined in the price of shares in stock exchange.Jensen and Meckling (1976) explained agency costs as the sum of monitoring costs, bonding costs, and residual loss. Monitoring cost:- In UK companies are required to follow Cadbury (1992) and Greenbury (1995) reports for corporate governance. Monitoring cost are paid by the principal to monitor the behaviour of agents. Monitoring cost generally include costs of conducting auditing, writing executive compensation contracts and sometimes cost of firing the fraud employees and other top managers or executives. All these costs are paid by the principal, but Fama and Jensen (1983) argued that these agency costs which are initially born by the principal, ultimately borne by the agents as the compensation of agents are adjusted to cover these costs. Some researcher further argued that monitoring will restrict the managerial initiative (Burkart, Gromb and Panunzi 1997). Criticisers of Cadbury Report (1992) have argued that high level of monitoring may restrict the managerial entrepreneurship. Bonding Costs As argued by Fama and Jensen( 1983), monitoring cost ultimately bear by agents which need to set up structure that will act in interest of shareholders or principal , the cost of establishing these set up or system is known as bonding costs. These costs are not always financial in nature; it may include additional information provided to shareholders. Denis (2001) further argued that â€Å"the optimal bonding contract should aim to entice managers into making all decisions that are in the shareholders best interests†. In UK, bonding structure which is imposed on closely held companies management, require companies to distribute all income after meeting all business expenses. Earning retention is big problem in UK; the mechanism of bonding may reduce the scope of this problem. Residual Loss â€Å"Residual loss arises because the cost of fully enforcing principal-agent contracts would far outweigh the benefits derived from doing so. Since managerial actions are unobservable ex ante, to fully contract for every state of nature is impractical. The result of this is an optimal level or residual loss, which may represent a trade-off between overly constraining management and enforcing contractual mechanisms designed to reduce agency problems.† (Patrick McColgan 2001:8). 2.1.1.2 Stewardship theory Agency theory is more dominant in the perspective of corporate governance mechanism, but this view has been criticized by many writers (Hoskisson et al. 2000; Blair 1995; Perrow 1986). Agency theory had limitation in explaining sociological and psychological involved in principal agent conflicts (Davis Thompson 1994; Davis et al.1997). Stewardship theory assume mangers as good stewards of the firms. Managers act diligently in order to attain high corporate profits and shareholders returns (Donaldson Davis 1994). In an empirical study performed by Tian and Lau 2001 in Chinese shareholding firms, they find stewardship theory has received strong support in comparison to agency theory. Further Phan 2001 explained that â€Å"whether the assumptions of Agency Theory can be generalised to emerging markets, with their different sociological, economic, and developmental fundamentals, remains an important research question†. In summary, agency theory has its roots in industrial and organisational economics. Agency theory assumes that behaviour of human being is opportunistic and selfish. Therefore, the theory recommends strong director and shareholder control. It suggests the fundamental function of the board of directors is to control managerial behaviour and try to ensure that managers act in the best interests of shareholders. 2.1.2 Review of Corporate Governance reports In this section, international reports on corporate governance will be critically reviewed which were published in last decades. The international reports considered in this section are as follows: â€Å"Report of the Committee on the Financial Aspects of Corporate Governance† (Cadbury Report, 1992) â€Å"Where were the Directors? Guidelines for Improved Corporate Governance in Canada† (Dey Report, 1994) The General Motors Corporation Guidelines (GMC, 2001) â€Å"Committee on Corporate Governance† (Hampel Report, 1998) â€Å"OECD Principles of Corporate Governance† (OECD Report, 1999) Sarbanes- Oxley Act 2002 After the unexpected corporate scandals of renowned companies like Maxwell (1991), Polly Peck (1991), and BCCI (1991) among others in the UK, the committee for corporate governance under the guidance of Sir Adrian Cadbury along with Financial Reporting Council (FRC), the London Stock Exchange (LSE), and the other accountancy profession has been formed to address corporate governance issues. This report was known as Cadbury report which was first report in UK focused on the aspect of corporate governance such as financial reporting and reviewed the role of boards and auditors. This report was published in 1992. The Cadbury committee report finally draw two major recommendation for the structure of UK corporate board. Cadbury report suggests at least three non executive directors in the board and two of them should be independent from management. The positions of chairman and CEO should not hold by the same person. The purpose behind this set up was to reduce the individual dominance a nd ensuring higher level of monitoring for corporate board by introducing more independence. Beasley (1996) and Dechow et al. (1996) found that â€Å"firms with more independent boards are significantly characterised by a lower likelihood of financial statement fraud and earnings management†. In Canada, during 1994 Dey report was published. This report was the first fully fledged report on corporate governance which a company should follow in order to list on stock exchange. Toronto stock exchange (TSE) adopted these guidelines in 1995 which were laid down by the Dey report. All TSE listed companies required to provide the difference in their corporate governance guidelines and guideline laid down by the Dey report. After Dey Report 1994, other similar reports in other jurisdiction have been published. General Motors Corporation (GMC) in USA published its own corporate guidelines in 1994 after criticising by the shareholders regarding poor company performance and doubtful board practices. These guidelines were developed with consent of GMC board, its shareholders and other activists for corporate governance. These guidelines were welcomed by the institute California Public Employees Retirement System (CalPERS) and by the industry. GMC guidelines become the benchmark in USA for corporate governance. In UK, during 1998, Hampel Committee was formed to review the recommendations of Cadbury report (1992) and the Greenbury report (1995) relating to executive remuneration. The Hampel committee was also formed to cover some gaps by these two reports i.e. Cadbury report and Greenbury report. Hampel report suggests that good corporate governance goes beyond prescribed corporate structures. According to Hample Report (1998:15) on Corporate Governance Sir Hample â€Å"recommend that companies should include in their annual report and accounts a narrative statement of how they apply the relevant principles to their particular circumstances. Given that the responsibility for good corporate governance rests with the board of directors, the written description of the way in which the board has applied the principles of corporate governance represents a key part of the process†. Hampel report drew attention for the approach of box ticking which is a serious issue for corporate governance . It also examined the implementation of Cadbury and Greenbury report and suggested more clear recommendations on policies of remuneration, accountability and auditing. During 1999, Organisation for Economic and Co-operation Development (OECD) laid down principles of corporate governance for the listed companies of member countries of OECD. It cover main subjects areas like rights and equitable treatment of shareholders, role of stakeholders in corporation structure, disclosure and transparency of financial facts and figures and majorly role and responsibilities of board. OECD guidelines become starting point for local policy makers of corporate governance. After the ,shocking scandals of Enron and WorldCom, US congress along with NYSE (New York Stock Exchange) passed the reforms to address conflicts of interest and redefined relationship between companies and auditors. This reform was known as the Accounting Industry reform Act 2002 which is widely known as Sarbanes Oxley Act 2002. The main purpose of this act was to enforce the independence of external auditors. The act also reinforced duties and responsibilities for CEOs and CFOs by imposing strict penalties for misrepresenting companys quarterly and annual reports. The penalty for misrepresentation was personal fines of US$ 1 million or imprisonment up to 10 years or both. Sarbanes Oxley Act has intense effect on the corporate governance policies on US and rest of the world. NYSE also imposed additional requirement for listed companies, under which listed companies must have independent directors in majority and must disclose business code of conduct and ethics for directors, office rs including managers at all level, and employees. Whittington(1993) and Melis, (2004a) argued that â€Å"corporate financial reporting and corporate governance systems are highly correlated, with any improvement in either system having a positive influence on the other, and vice versa† Combined code issued in 2006 replaces the combined issued in 2003. Financial service authority of UK, require listing companies to be obliged by the combined code 2006 and carry out consultation before listing. This new code contains main principles and provisions. Combined code 2006 asks listed companies to make a disclosure statement for code and that should be in two parts. Some of the provisions are not or less relevant for small or new listed companies. Also some provisions do not apply to companies below FTSE 350. 2.1.3 Global findings for adoption of corporate governance guidelines According Stephanie Maier (EIRIS 2005:1) findings, â€Å"Only 25% of US companies separate the roles of chairman and CEO compared with at least 50% forcompanies in other developed economies. Swiss boards have the highestpercentage of independent directors(81%) Germany, Austria and Japanall have less than 10%. Only 4% of companies in Japan haveaudit committees comprising amajority of independent directorscompared to over 95% in the USA,Canada, the Netherlands,Luxembourg, the UK and Ireland†¢ Only 22% of companies in Singaporeand 25% of companies in Hong Konghave meaningful codes of ethics†. Board size: According to EIRIS 2005, average board size is minimum in New Zealand (7.2) and maximum in Germany (22.8). USA and UK comes at rank 7th and 8th with average board size of 10.7 and 11.4 respectively ( see appendices for details). Higgs Review (2003) suggested â€Å"An effective board should not be so large as to become unwieldy. It should be of sufficient size that the balance of skills and experience is appropriate for the requirement of the business and that changes in the boards composition can be managed without undue disruption†. Separation of ownership and CEO According to findings by EIRIS 2005, in UK nearly 97% separate the ownership under unitary board structure whereas in US only 25% companies separate the ownership under the unitary board structure. In Ireland and Luxemb

Jackie Robinson Essay -- essays research papers

Jackie Robinson was born on January 31, 1919, in Cairo, Georgia, the grandson of a slave. Jackie was the youngest of five children. When he was six months old, his father deserted the family. His mother moved them to California where it was easier for blacks to live and get work. In those days, life was very hard for black people in the South. This upset young Jackie. He became very involved in sports. He played football, basketball, baseball and ran track. In college he was a top football player. He left college before graduating. Jackie worked for the National Youth Administration at a work camp but the camp was closed. In the fall of 1941, he joined the Honolulu Bears professional football team and then was drafted into the Army. While stationed in Kansas with the Army, he worked with Joe Louis, a famous boxer, to fight unfair treatment of black people in the military. After leaving the Army, Robinson joined the Kansas City Monarchs. They were a team in the Negro League. This team was made up of African American baseball players. He soon become one of the leagues top players but did like the low pay and constant traveling. He didn't want to make baseball his career. The Brooklyn Dodger president, Branch Rickey, had been looking for a black player to bring into the major leagues. Those leagues were closed to blacks at that time. In 1945, Robinson signed a contract to play for a Dodgers farm team, the Montreal Royals. Many owners and sportswriters were against this. They ...

Symbolism in Arthur Miller’s Death of a Salesman Essay -- Death Salesm

Symbolism in Arthur Miller’s Death of a Salesman In his play, Death of a Salesman, Arthur Miller employs many symbols to illustrate the themes of success and failure.   They include the rubber hose, the tape recorder, and the seeds for the garden.   These symbols represent Willy's final, desperate attempts to be successful and the failure he cannot escape.  Ã‚  Ã‚   The rubber hose represents both success and failure.   It is attached to the gas main in Willy's house and provides him with the opportunity to commit suicide.   Willy sees this as a way to finally do something for his family to make up for years of disappointment.   He will no longer be a burden to them when he is gone, and they will remember him in a positive light.   Yet Willy cannot even commit suicide successfully.   His attempt is a failure, so he lies to his family and denies that he was going to kill himself.   His wife Linda, who finds the hose, knows what he was going to do with it, as does Biff.   When confronted by Biff, Willy not only denies that he was going to use the hose, but also denies ever seeing it before.   Instead of being remembered as a successful businessman who died, Willy is seen by his family as a failure who cannot even commit suicide or tell the truth.  Ã‚   Another important symbol is Howard's tape recorder.   It represents the many material objects wealthy businessmen could provide for their families and for themselves.   Willy wanted this lifestyle; he wanted "something he could lay his hands on" (Miller pg.  Ã‚   ).   It would not be enough to just be successful; Willy wanted to be able to show people material representations of his success.   The tape recorder shows that Howard has reached this level of success.   Yet while the recorder symbolizes ... ...o could acquire such technical wonders.   Even if he could afford them for himself and for his family as other businessmen could, he couldn't figure out how to work them because he did not change with the times.   Finally, Willy hoped to show his family that he could do something right and give them a little pleasure by planting seeds in the backyard.   He hoped that these seeds would grow into a wonderful garden for all of them to enjoy.   Then his family would appreciate him.   But the garden fails, as does Willy.   Willy Loman wants to be a successful businessman that his family can be proud of.   The hose, tape recorder and seeds represent just a few of his attempts to do this.   Yet as with everything in Willy's life, what initially stands for hope ends up symbolizing failure. Work Cited: Miller, Arthur. Death of a Salesman. New York: The Viking Press 1988

Cruelty In Literature :: essays research papers fc

There are many examples of cruelty in literary works. Literary works such as plays, novels, films, short stories, and poetry. One may believe that cruelty is a way of life. Cruelty is included in great works of literature such as The Crucible, The Scarlet Letter, Bartleby, The Red Badge of Courage, The Last of the Mohicans, Lottery, Dr. Heidigger’s Experiment, Redburn, Angel of Death, Gold Bug, The Tell-tale Heart, and Night. The following is an explanation of the cruelty and the result of it. In the Last of the Mohicans, there are many acts of cruelty displayed. For example, The bad Huron Indian Magma makes the English troops walk right into a war party trap. As a result of this action, The English troops fought every Indian in the war party, but three Mohicans killed most of the Huron. Another example would be when Monroe won’t let the militia go back to the frontier to defend their families. As a result, Nathaniel helped the people who wanted to leave, escape. Another example would be when the Huron Indians killed Uncas. In turn, Alice threw herself off a cliff because she loved him so much. Another example would be when the French told the Huron not to attack the American troops again. As a result, the Huron attack the American troops anyway. Theses various counts of cruelty show that the Huron Indians are a cruel people. In The Red Badge of Courage there also are many acts of cruelty displayed. For example, Henry runs away from battle. In turn, Jim and the rest of the company got wounded and some died. Another example would be when the red coats attacked the Americans. As a result, Henry ran away again. Another example would be when the generals were laughing about the win. In turn, Henry overheard them and thought he was celebrating about something he didn’t help in and was treating the entire war as a game. Another example would be War itself. As a result, Henry gets war fever and runs in front of the line, in a suicide attempt. Another example would be when Henry was asking for help from a running solider, the solider hit Henry with the butt of his rifle. In turn, Henry was knocked out and left for dead. Unlike the Huron, the red coats and their own men are the cruel ones. One of the solider on his side actually strikes Henry, which knocks him out. This movie also illustrates cruelty from a 3rd party, the generals are not involved directly yet cause cruelty. In Bartleby, there are many occurrences of cruelty. For example, Bartleby wouldn’t leave the office. As a result, many people get mad. Another example would be when Bartleby’s old boss moved out of the office. In turn, the new owner came back to his old boss and said get rid

What Are the Ethical Teachings of Al-Ghazali and How Important and Relevant Are They to Contemporary Muslims? Critically Discuss

What are the ethical teachings of al-Ghazali and how important and relevant are they to contemporary Muslims? Critically discuss. Imam al-Ghazali (d. 1111) remains perhaps the most important religious authority in Islam after the first three generations of Muslims. The title, ‘Proof of Islam’, conferred upon him by the majority of Muslims, is a reflection of the complexity of his work, which included jurisprudence, theology, philosophy, psychology, and mysticism.This essay will demonstrate how al-Ghazali synthesised concepts of tawheed (unity of God), islam (ritual worship, virtue, ilham (Godly inspiration) and tasawwuf (Sufism) in a broad ethical theory. His ethics, as illustrated in the Ihya Ulum id-Deen, can be applied by common Muslims, Muslim scholars. More broadly, its implications–spiritual, social, behavioural, and intellectual–can play a significant role in the umma’s Islamic revival.Al-Ghazali’s ethical vision was based on humans att aining happiness, which is ultimately found in salvation in the next life (Hourani 1976, p. 77). The means by which he thought this was achieved best was through spiritual devotion rather than rationality. Al-Ghazali prioritises spirituality over intellectualism in knowing what is right and wrong based on his assertion of the soul as the human’s most important component (Moosa 2005). The soul possesses reason, thus holds the potential of knowing God and the capacity to know the realities of this world.As the immaterial soul is merged with the material body, the temporal worldly form of a human is experienced. The body is the vehicle through which the soul can achieve its potential of knowing God; bodily senses become tools through which the soul achieves ethical behaviour. The body has faculties such as anger, appetites for food and drink, lust and greed. It is possible for the bodily faculties to overcome the soul’s faculty of reason, a condition described in the Qura n as the ‘self that incites to evil’ (Quran 12:53).Conversely, reason can be used to control bodily faculties, and by doing this achieve the ‘serene soul’ (Quran 89:27). A third self is the middle one between the two, the reproachful self (Quran 75:2), which is in constant struggle with temptations of the evil self. The integrated divine and animal souls form the nafs, which is the human’s true self or identity. The coexistence of soul and body is volatile; the soul wishes to know God, while the body desires temporal sensory pleasure.The bifurcation of the human into these two opposing components indicates the necessity for a method of achieving equilibrium, for the solution to the struggle between the divine and animal forces is not a simple separation of soul and body, as this renders void the Creator’s wisdom in creating the worldly human. A more complex method assumes the human comprises other entities integral to the nafs. Here al-Ghazali ’s ethical theory assumes a view of the human imparted by Sufis before him; in addition to the soul and body, there is the ruh (spirit), qalb (spiritual heart), and ‘aql (intellect) (Moosa 2005, p. 24). The qalb is an abstract entity directly linked with the physical heart that contributes to the human experience, the faculties of perception, knowing, and spiritual experience (Moosa 2005, p. 225). The level of integration of the faculties of the qalb determines the success of the soul’s goal in knowing God. Thus, the qalb’s condition is vital to the outcome of the soul’s journey through this temporal life. Hourani (1976) describes Ghazali’s ethical concern as ‘right conduct and the purification of the soul by the individual . . ’ (p. 1). To this end, the method of equilibrium that al-Ghazali promoted, like Sufis after him, is tazkiyat al-qalb, or purification of the spiritual heart. Ameur (2009) notes three aspects of the process of purification: good action; virtues; and knowledge (p. 3). Good action refers to the following of ritual and social behaviour as prescribed by the shariah. Ghazali’s categorises actions in a five-fold system: fardh (commanded), sunnah (recommended), mubah (permitted), makruh (disapproved), or haram (forbidden).The significance of external acts lies in both their being rewarded as obedience, and their contribution to cultivation of virtues (Hourani 1976, p. 77). Good action cultivating virtues indicates a key agenda in Ghazali’s ethics: the restoration of balance between the outward and the inward states of people (Murad 2002). He realised that this balance could be best pursued in the purification of the inward, which requires first the elimination of vices. Vices are spiritual ailments of the qalb and include harmful traits such anger, envy, lust, and riya (ostentation). They form impediments to spiritual progress.The method of removing these impediments is mujahad a (Ameur 2009, p. 4) or what is commonly described by Sufis as jihad al-nafs (struggle against the self). Mujahada is a concept covering a broad array of practices used in tasawwuf to purify the nafs including: tafakkur (introspection); muraqaba (self-awareness); dhikr (meditation); and zuhd (asceticism). The previous two aspects of purification are not possible without knowledge. For al-Ghazali, knowledge is of two types: (a) one that is learnt in tenets of faith and rules of Islamic law; (b) one that is known through the qalb (Ameur 2009, p. ). The first type is all knowledge required to perform good action. This includes the basic tenets of faith, and worldly and religious activities including social dealings and private worship. The sources of these knowledges are – in accordance with Ghazali’s tradition-based approach to theology and jurisprudence – the Quran, Sunnah, ijma (consensus of ulama), and qiyas (analogical deduction from the Sunnah). The second ty pe of knowledge is abstract in nature as its locus is the qalb. This knowledge can be described as insight.One Prophetic tradition warns ‘beware the firasa of the believer, for he sees with the light of God’ (Tirmidhi, cited in Gulen). This knowledge is a set of experiences, or insights, impressed upon the heart through good action and Godly disposition. Such knowledge, Ameur (2009) states, â€Å"is a disposition deeply rooted in the soul, from which actions flow naturally and easily without need of reflection or judgement† (p. 4). This state is described in a hadith Qudsi reported in Sahih Bukhari:My slave approaches Me with nothing more beloved to Me than what I have made obligatory upon him, and My slave keeps drawing nearer to Me with voluntary works until I love him. And when I love him, I am his hearing with which he hears, his sight with which he sees, his hand with which he seizes, and his foot with which he walks. If he asks me, I will surely give to him , and if he seeks refuge in Me, I will surely protect him (cited in Keller 1995). In this way a reciprocal relationship emerges between action, virtue and knowledge; each reinforcing the other.The successful integration of them leads to the soul’s objective of knowledge of God. Here the veil of the human’s limited ‘sight’ is lifted; the result is the realisation of truths (Gardener, p. 136). The culmination of Ghazali’s ethical purification is wilaya (intimacy). For the wali (an intimate) of God, the inner and outer are harmonised in realising tawheed. Here, tawhid (the unity of God) is not merely knowledge of theological principles, but rather it is ‘an inbuilt attribute’, the product of repetitive good acts and strengthening of virtues (Ameur 2009, p. ). For al-Ghazali, like other Sufis, knowledge of tawheed signifies the ultimate ethical goal of attaining happiness, which is experiencing as the nafs al-mutma’inna (the serene s oul). The scope of al-Ghazali’s ethical theory, incorporating shari’ah knowledge, theology, philosophy, and Sufism, ensure its relevance to contemporary Muslims is multifaceted. It holds special relevance to laymen, scholar and umma in general, as illsutrated in the title of the work that is a summary of Ghazali’s ethics: the Ihya Ulum id-Deen (Revival of the Religous Sciences)For the lay Muslim, al-Ghazali’s tripartite system of purification provides a practical guide to living Islam as a whole; hence, the Ihya covers all activities falling under iman, islam, and ihsan (Ormsby 2008, pp. 111-119). It explains the relationship between ritual devotion, social dealings, belief, vices, and virtues. Nofal (1993) uses a specific example from the Ihya that shows the relevance of the latter’s ethics to contemporary Muslims in the area of children’s education. Al-Ghazali says about children that:They must be trained to obey their parents, teachers an d elders, and to behave well towards their classmates’; ‘should be taught modesty, generosity and civility’; ‘[their] tutors must devote attention to religious education (cited in Nofal 1993, p. 5). A noticeable lesson here for Muslim parents and educators is that education ‘is not limited to training the mind and filling it with information, but involves all aspects—intellectual, religious, moral and physical—of the personality of the learner’ (Nafal 1993, p. 5).More broadly, the raising of children described by al-Ghazali facilitates adab, or Islamic culture, which in light of the modern culture of individualism and selfishness, is vital for cultivating Islamic personality. The scholarly class also may benefit from al-Ghazali’s Ihya. Ebrahim Moosa (2005) describes him as an exemplar for ‘critical traditionalism’ (p. 264). His scholarly legacy vis-a-vis ethics, Moosa (2005) comments, is that revival of traditi on entails fostering understanding of the ethical imperatives and practices in tradition (p. 278).This idea promotes juridical ethics over legal scientism, indicating the primacy of the implicit moral code of Quran and Sunnah over its text. In outlining this ethical system, al-Ghazali resuscitated the discursive sciences. The importance of his accomplishment is understood by reflection on his environment. To resuscitate the religious sciences, al-Ghazali effectively bridged the Arabicate and Persianate modes of thought prevalent at that time. Muslim scholars and students today, even moreso than al-Ghazali, face a dilemma of multiple matrices of cultures and politics.Within Islamic thought, Saeed notes eight main trends (ref), which can be characterised as varieties of traditionalism, modernism, and fundamentalism. Al-Ghazali’s approach to ethics could indeed be the bridge allowing crossing of ideas between the three main strands. Julia Day Howell (2001), commenting on Sufismà ¢â‚¬â„¢s role in the Indonesian Islamic revival, says that ‘as part of the broader revival, it has been subject to reinterpretations that have helped break down distinctions between ‘‘Traditionalists’’ and ‘‘Modernists’’’ (p. 710).Finally, the umma at large is also in need of the tasawwuf aspect of al-Ghazali’s ethics. The vagueness of the term within modern society notwithstanding, historical Muslim communities understood its importance, as noted by ibn Kaldun, who says about tasawwuf: This knowledge is a branch of the sciences of Sacred Law that originated within the Umma. From the first, the way of such people had also been considered the path of truth and guidance by the early Muslim community and its notables (cited in Keller 1993). Keller (1995) notes that for the early communities, tasawwuf signified ikhlas (sincerity).Ikhlas is a state of the qalb, and like other states of the qalb such as love, mercy, f ear is obligatory for Muslims hoping for felicity in the afterlife. The Quran says: ‘a day when wealth will not avail, nor sons, but only him who brings Allah a sound heart’ (26:88). Thus tasawwuf, Keller notes, is necessary for ‘fully realising the Shariah in one’s life, to attain the states of the heart demanded by the Quran and Sunnah’. Al-Ghazali’s ethics, as practical tasawwuf, becomes a means of addressing the spiritual aspect of religious life.The broader implications of Ghazali’s tasawwuf lie in negotiating the modern world. Murad (2002) notes that the failure of the ‘Enlightenment paradigm, as invoked by the secular elites in the Muslim world, to deliver moral and efficient government and cultural guidance, indicates that the solution must be religious’. To this end he suggests traditional Islam; it is the middle path between two extreme responses elicited by secularisation: liberalism and fundamentalism. Moosa (20 05) notes that one of the challenges to contemporary Muslim society is epistemicide, the destruction of a social-group’s knowledge (p. 65). The need to stem this epistemicide surely cannot be done by zealots or modernist liberals as the former cannot relate its scripture to changing circumstances and the latter decide to change its basic meanings. Here Ghazali’s ‘critical traditionalism’ may be utilised. Its moderate tradition-based ethics provides an antithesis to the ‘contemporary positivist and scientist ethics of dos and donts’ (Murad 2002). A critique of the relevance of al-Ghazali’s tasawwuf-laden ethics is that it may alienate many contemporary Muslims.The more advanced stages of his ethics involving knowledge of God are ungraspable for the non-initiated ‘purifier’. However, the beginning of his ethics, practice of daily rituals and pursing good character, remains accessible to all people. Therefore, in view of conte mporary society’s focus on materialism, and the lax attitude elicited by modernity towards religious life, al-Ghazali’s tasawwuf-laden ethics, at various levels, provides a robust cognitive-behavioural ethical methodology that can facilitate religious living in contemporary society. In summary, al-Ghazali’s ethics provides a successful method of attaining the ‘serene soul’.He framework of purification of the self involving action, virtue, and knowledge culminates in the state of wilaya wherein one witnesses realities of tawheed. The implications of his holistic ethics are daily application in worldly and religious living, resuscitation and mediation of Islamic scholarship, and a tasawwuf-based spiritual revival of the umma. References Ameur, R 2009, 101466 Ethical Traditions in Islam, The Ritual of the Law: lecture transcript, University of Western Sydney, Milperra. Gardener, RWR 1917, ‘al-Ghazali as Sufi’, The Muslim World, vol. 7, no. 2, 131-143.Hourani, G 1976, ‘Ghazali on the ethics of action’, Journal of the American Oriental Society, vol. 96, no. 1, pp. 69-88, University of Western Sydney Resources Online ( 101466). Gulen, F n. d. , Basira and insight. http://www. fethullahgulenchair. com/index. php? option=com_content&view=article&id=626:basira-and-firasa-insight-and-discernment-&catid=69:key-concepts-in-the-practice-of-sufism-&Itemid=210>. Howell, JD 2001, ‘Sufism and the Indonesian Islamic Revival’, The Journal of Asian Studies, vol. 60, no. 3, pp. 701–729. Keller, NHM 1995, The place of tasawwuf in traditional Islam, viewed 8 June 2011, .Keller, NHM 1995, How would you respond to the Claim that Sufism is bid'a? , viewed 8 June 2011, . Moosa, E 2005, Ghazali: The poetics of imagination, The University of North Caroline Press, Chapel Hill. Murad, AH 2002, The Faith in the future: Islam after the Enlightenment, viewed 9 June 2011, . Nofal, N 1993, Ghazali, Prospects: The qua rterly review of comparative education vol. 23, no. 3/4, pp. 519-542. Ormsby, E 2008, ‘The revival of Islam’, in Ghazali: The revival of Islam, Oneworld, Oxford. Saeed, A 2007, ‘Trends in contemporary Islam’, The Muslim World, vol. 97, pp. 397-404.