Tuesday, October 29, 2019
CAPM ana Capital Budgeting Essay Example | Topics and Well Written Essays - 750 words
CAPM ana Capital Budgeting - Essay Example The estimation of the cost of capital in turn is based upon the CAPM. However, not only does recent discourses in academic literature challenge the validity of the CAPM model, there is lack of consensus regarding the adequate measure of the market risk premium, a central input required for computing the cost of capital using the CAPM. However, in spite of these short comings, the CAPM has survived as the predominant quantitative model in its class for over 40 years since its inception. It is precisely this paradox the paper in concern addresses. In particular, Jagannathan and Meler (2002) offer an explanation to the following question: in spite of the various short comings of the CAPM model in computing the cost of capital, why do majority of managers report using the model to make critical decisions? The answer they offer is that in the real world, computing the exact cost of capital may not be crucial for optimal decisions. Hence, although the CAPM may not provide the exact value o f cost of capital, but it still remains useful for managers. Assuming rationed organizational and managerial capital which implies that not all projects with positive NPVs can be invested in, the paper shows that utilizing a hurdle rate greater than the cost of capital and the typical NPV computations, the value of waiting for an option can be accounted for. Therefore, the exact value of cost of capital no longer remains an imperative for optimal decisions. The idea that discounting values are set much higher than the cost of capital has significant support in financial literature. Stein (2001) for instance shows that aspects like agency costs arising out of asymmetric informational situations among share owners and managers leads to setting of discount rates that are much higher than the actual cost of capital. Empirical literature also lends further support to the claim by establishing the existence of a large number of hurdle rates that are set higher than the cost of capital (Po terba and Summers, 1995). Truong, Partington and Peat (2008) have also established that there are a number of hurdle rates used in the capital budgeting procedure in Australia. The critiques of using CAPM in capital budgeting fundamentally stem from two particular difficulties. First, the time horizon of the basic model is limited to a single period. But in reality, investment appraisals of firms typically involve decision making over multiple periods. Thus, this raises the question of applicability of the CAPM in investment appraisal in the real world. Secondly, computing discount rates specific to particular projects can prove difficult owing to for instance, difficulties arising in identification of appropriate proxy betas as proxy companies usually undertake multiple activities simultaneously. Disentangling the beta specific to a project may prove near impossible because these require certain information that may be extremely difficult to obtain. (Head, 2008) Additionally, it ha s been shown that although the NPV criterion can be utilized to make accept/reject decisions, these are valid and optimal only if the discount rate is not computed using the CAPM (Magni, 2009). In light of the discussion above what emerges essentially is that the CAPM generates estimates of cost of capital
Sunday, October 27, 2019
Potassium Lithium Hydrogen Phthalate Mixed Crystals
Potassium Lithium Hydrogen Phthalate Mixed Crystals 3. RESULTS AND DISCUSSION SECTION 3.1 Synthesis, growth, structure and characterization of potassium lithium hydrogen phthalate mixed crystals* In the present work, we report the growth and structure of a new mixed crystal C16H16KLiO11 (PLHP), which crystallizes in a non-centrosymmetric space group P21 and SHG-active. The grown crystals were subjected to various characterization studies which are briefly described below. Here it is established that by synthesising the mixed crystal in a different route with a controlled concentration of additive, one can sustain nonlinearity at the macro level by allowing the specimen to crystallise in a polar space group. The main objective of the investigation is to design a noncentrosymmetric structure by attempting a different route of synthesis, leading to NLO activity. Steering to noncentrosymmetry from centrosymmetry is made possible by changing the growth conditions. 3.1.1. Crystal growth The mixed crystal PLHP was synthesized from an aqueous solution containing equimolar quantities of AR grade potassium hydrogen phthalate (KHP) and lithium carbonate (Li2CO3) in slightly acidic conditions using de-ionized water. After successive recrystallization, the mixed crystals were grown by the slow evaporation solution growth technique. The crystallization took place within 20-25 d and the crystals were harvested. Photographs of as- grown crystals are shown in Fig. 3.1.1. Fig. 3.1.1. Photographs of mixed crystal PLHP 3.1.2. FT-IR The FT-IR spectrum of the as-grown specimen is shown in Fig.3.1.2. An absorption band in the region 500-900 cm-1 corresponds to the C-H out of plane deformations of aromatic ring. The C=O stretching frequency appeared at 1670 cm-1. The characteristic vibrational patterns of KHP104, lithium hydrogen phthalate (LiHP) 22 and PLHP are given in Table 3.1.2. A slight shift of some of the characteristic vibrational frequencies could be due to the stress development because of Li incorporation. Fig. 3.1.2. FT–IR spectrum of mixed crystal PLHP Table 3.1.2. FT-IR frequencies of some acid phthalate crystals (cm-1) aRef 105 bRef 22 c Present study 3.1.3. TGA/DTA Thermal studies reveal the purity of the material. The TGA curve shows a single stage weight loss at à ¯Ã‚  ¾150o C due to loss of water molecule. In DTA, the broad endothermic peak at 420 °C, is due to decomposition. The residual mass observed from thermogram at 600 °C is ~50%. (Fig. 3.1.3). 3.1.4. SEM / EDS The SEM micrographs give information about the surface morphology and it is used to check the imperfections105. The SEM pictures of PLHP at different magnifications are shown in Fig. 3.1.4.1. It shows highest surface roughness in a plate like structure, due to defect centers and crystal voids. The presence of Li and K in the PLHP crystal lattice is confirmed by energy dispersive spectroscopy (EDS) (Fig. 3.1.4.2). Fig. 3.1.4.2. EDS spectrum of PLHP 3.1.5. AAS and CHN analysis Atomic absorption spectroscopic studies were carried out to quantify Li (20.6 ppm) and K (21. ppm ) in the sample. Also, CHN elemental analysis was performed to estimate the quantity of carbon and hydrogen present in PLHP. The elemental composition found was: C 42.93%, H 3.29%. The calculated composition was: C 44.63%, H 3.7%. 3.1.6. UV-visible The UV-visible spectrum of the mixed crystal PLHP reveals high transmittance in the visible region and the lower cut-off wave length is observed at ~300 nm. Incorporation of foreign metal ion into the KHP crystal lattice does not destroy the optical transmission of potassium hydrogen phthalate. The concentration of an absorbing species can be determined using the Kubelka-Munk equation106 correlating reflectance and concentration, F(R) = (1-R)2 / 2R = ÃŽ ± / s=Ac / s where F(R) is Kubelka-Munk function, R is the reflectance of the crystal, ÃŽ ± is absorption coefficient, s is scattering coefficient, A is absorbance and c is concentration of the absorbing species. The direct band-gap energy of the specimen is estimated as 4.05 eV, from the Tauc plot [F(R)hÃŽ ½]2 versus hÃŽ ½ (eV) (Fig. 3.1.6). Fig. 3.1.6. Tauc plot (Direct Band gap energy) 3.1.7 X-ray diffraction analysis The powder XRD pattern of PLHP shows that the sample is of a single phase without a detectable impurity. Narrow peaks indicate the good crystallinity of the material. At room temperature all the observed reflections were indexed. The indexed powder XRD pattern is shown in Fig. 3.1.7.1. Peak positions in powder XRD match with simulated XRD patterns from single crystal X-ray diffraction. The relative intensity variations could be due to the preferred orientation of the sample used for diffractogram measurement. Also, the mosaic spread of powder and single crystal patterns may differ, resulting in intensity variations. The structure of PLHP is elucidated and the ORTEP is given as Fig. 3.1.7.2. Three-dimensional view of intramolecular hydrogen bonding interactions is displayed in Fig. 3.1.7.3. The chemical formula C16H16KLiO11 confirms the presence of K and Li in the crystalline matrix, well supported by energy dispersive X-ray spectroscopy (EDS) and atomic absorption spectroscopy (AAS). The specimen crystallizes in the monoclinic crystal system with the noncentrosymmetric space group P21. The crystallographic parameters of PLHP, KHP, LiKP and LiHP are listed in Table 3.1.7.1. Fig.3.1.7.1. Experimental (red) and simulated (blue) powder XRD patterns Fig.3.1.7.2. ORTEP of PLHP Fig.3.1.7.3. Three dimensional view of intramolecular hydrogen bonding interactions (OHà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O) Table 3.1.7.1. Crystal data of LiHP, KHP, LiKP and PLHP crystals The alkali ions are linked to each other by O–Hà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O hydrogen bonds through the carboxylate oxygen. The O atoms of the carboxylate group (in phthalate ions) namely O(1)-O(8) are connected to K1, while the lithium ions are connected with central metal ion via O(5)-O(6), O atoms of the water molecules. The K-O bond distances range from 2.8311 (19) to 3.207 (8) Ã…, which is higher than bond distances observed in potassium hydrogen phthalate monohydrate 2.305 (1) –2.597 (1) Ã…. The Li–O bond distances lie in the range 1.956 (3)–1.968 (3) Ã…. The aromatic C-C bond distances fall in the range 1.377 (3) –1.485 (2) Ã…. The four carboxy C-O distances are almost same and the values are close to that observed for potassium hydrogen phthalate monohydrate107 and sodium acid phthalate108. In LiKP, O(4)–K(1) bond distance lies at 2.7491 Ã… whereas in our present study, the O(4)–K(1) bond dist ance is 2.7671 Ã…. The selected bond angles and bond lengths are given in Table 3.1.7.2. Crystal packing with hydrogen bonding interactions along the b-axis is given in Fig. 3.1.7.4. Strong intramolecular hydrogen bonding interactions are O(2)-H(2)à ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O(11) and O(5)-H(5B)à ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O(3) assembled with distances of 1.77 and 1.86 Ã… respectively (Fig. 3.1.7.5). Weak intermolecular interactions are observed for O(7)-H(7B)à ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O(10), O(7)-H(7B)à ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O(11) and O(5)-H(5B)à ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O(1), with bond distances of 2.41 (2), 2.46 (3) and 3.25 (4) Ã… respectively (Table 3.1.7.3.). Table 3.1.7.2. Selected bond lengths (Ã…) and angles (o) of PLHP Table 3.1.7.3. Hydrogen bonds geometry for PLHP [Ã…, o] Fig. 3.1.7.5. Three dimensional image of polyhedron with O-Hà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O interactions 3.1.8. SHG efficiency In order to confirm the influence of incorporation of lithium on the NLO properties of KHP the pure and mixed crystals were subjected to SHG test with an input radiation of 6.5 mJ/pulse. The outputs give the relative SHG efficiencies of the measured specimens. As seen, the SHG activity of the mixed crystal is comparable with that of KHP (Fig. 3.1.8) and it is quite likely due to the facile charge transfer, not disturbed by Li-incorporation. Although many materials have been identified that have higher molecular nonlinearities, the attainment of second-order effects requires favourable alignment of the molecule within the crystal109. It has been reported that the SHG can be greatly enhanced by altering the molecular alignment through inclusion complexation110. The mixed crystal PLHP grown from an aqueous solution containing equimolar quantities of reactants crystallize in a noncentrosymmetric space group P21 and SHG-active, whereas when Li is taken in excess in the growth medium the f ormed mixed crystal LiKP crystallizes in a centrosymmetric space group P1 and hence SHG-inactive29. It is interesting to observe that the mixed crystal of KHP synthesized by a different route crystallises in a polar space group. By changing the growth conditions it is possible to attain noncentrosymmetry in preference to centrosymmetry, a required characteristic of an NLO material. Fig. 3.1.8. The comparative SHG oscilloscope traces of the powder samples of KHP (red) and PLHP (blue) 3.1.9. Hirshfeld surface analysis The Hirshfeld surfaces of PLHP have been demonstrated in Fig. 3.1.9.1 by showing dnorm, shape index, de and di. The Hirshfeld surface111-113 surrounding a molecule is defined by points where the contribution to the electron density from the molecule under consideration is equal to the contribution from all the other molecules. For each point on that isosurface, two distances are determined: one is de representing the distance from the point to the nearest nucleus external to the surface and second one is di, representing the distance to the nearest nucleus internal to the surface. The normalized contact distance (dnorm) is based on both de and di. The surfaces are shown as transparent to allow visualization of the molecule around which they were calculated. The circular depressions (deep red) which are visible on the Hirshfeld surface are an indicator of hydrogen bonding contacts and other visible spots in Fig. 3.1.9.1a are due to Oà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Li ( 3.6%), Hà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O (14.5%), Oà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢H (15.9%), Kà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O (2.0%) and Lià ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O (3.5%) interactions. The short interactions represented by deep red spots in de surface (Fig.3.1.9.1c) are Oà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Li contacts (3.6%). The dominant Oà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢H (14.5%), Lià ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O (3.5%) and Hà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢H (31.7%) interactions are viewed in di surface plots by the bright red area in Fig. 3.1.9.1d. The shape index indicates the shape of the electron density surface around the molecular interactions. The small range of area and light color on the surface represent a weaker and longer contact other than hydrogen bonds. The two-dimensional fingerprint plots114 of PLHP exemplify the strong evidenc e for the intermolecular interactions pattern. In the fingerprint region (Fig. 3.1.9.3), Oà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢H (15.9%) interactions are represented by a spike in the bottom area whereas the Hà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O (14.5%) interactions are represented by a spike in the top left region. Hydrogen-hydrogen interactions Hà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢H (31.7%) are very high while compared to the other bonding interactions. Sharp curved spike at the bottom left area indicates the Oà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Li (3.6%) and top left corner with curved spike indicates the Lià ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢O (3.5%). The finger print at the bottom right area represents Cà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢H (11.7%) interactions and top right area represents Hà ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢Ãƒ ¢Ã‹â€ â„ ¢C (8.7%) interactions. The number of interactions in terms of percent age are represented in a pie chart in Fig. 3.1.9.2. Fig.3.1.9.1. Hirshfeld surface analysis of PLHP (a) dnorm (b) shape index (c) de (d) di Fig. 3.1.9.2. Relative contribution of various intermolecular interactions in PLHP Fig. 3.1.9.3. Fingerprint plots of PLHP 1
Friday, October 25, 2019
Mad Cow Disease :: essays research papers
Mad cow disease kills many and is spreading rapidly throughout Britain and is slowly affecting the United States. Mad cow disease is a serious disease that affects many different species. There are different forms of the disease. This disease has occurred in Britain and can occur in the United States as well. Mad cow disease can be prevented.      Mad cow disease has several different names. It is called Bovine Spongiform encephalopathy or BSE. Other names are New Variant Creutzfeldt-Jakob disease or vCJD (Morris). Transmittable Spongiform encephalopathy or TSE is another name. Spongiform encephalopathies are nervous system disorders which nerve cells of the brain die, causing the brain to assume a sponge-like appearance (Montague, Part 1). In 1985 a veterinarian found odd symptoms in a cattle (Morris). Cows in Britain began to die of mysterious ailments (Montague, Part 1). German physicians Hans Gerhard Creutzfeldt and Alfons Jakob first discovered vCJD in its natural form in the 1920’s (Shell, Part 2). In 1996 British government conceded that people were falling victim to a degenerate new brain disease linked to BSE (Morris).      Some cows in the United States may already have mad cow disease. It is also very possible that people in the United States may have the human form of the disease. Cows are vegetarians by nature. They can be infected when they are forced to eat parts of other infected animals. When animals are slaughtered for human food at least half of the carcass-hide, hooves, entrails, etc can not be sold for human consumption. It’s then sent to a â€Å"rendering†plant where it’s ground up, boiled down and driven into the consistency of brown sugar. Now, it’s sold for feed for cows, pigs, chickens and pets. Eating infected animals transmits mad cow disease or eating animal parts especially brains and spinal cords (Montague, Part 3). Cattle, sheep, pigs and poultry that are exposed to BSE via animal food can secretly harbour the disease (Morris). Scrapie is a disease that has affected sheep for at least 200 years. Sheep infected with Scrapie rub up ag ainst fences or barns until they scrape away their wool, leaving raw wounds, then they die. Scrapie infected sheep are sometimes fed to cows (Montague). Humans can get the human form of mad cow disease by eating infected meat.      Mad cow disease has a severe effect on animals. The infamous disease has increased 23 percent a year in Britain since 1994 (ABC News).
Thursday, October 24, 2019
‘Resurrection Is More Likely to Be True Than Reincarnation.’ Discuss
Resurrection is more likely to be true than reincarnation. ’ Discuss In discussing this statement, we must first define the words resurrection and reincarnation to decipher what they mean. Resurrection is the act of rising from the dead or returning to life and reincarnation is the rebirth of a soul in a new body. There are many problems surrounding the two due to mainly religious beliefs. I will be focussing mainly of the religion of Hinduism as they believe in reincarnation, and Christianity which believes in resurrection.Reincarnation is a common belief in the eastern part of the world, with Buddhism as well as Hinduism, supporting the idea of rebirth. In Hinduism each person has an essential self which is called the Atman, and is eternal and seeks unity with God. At physical death, the Atman leaves the body and enters another at birth. The physical body is gone but the Atman remains the same. The status of the body that the Atman re-enters is depended on whether in the pre vious life the person was morally good or bad, if good it will be in a higher status body, and if bad will be in a lower status body.This cycle of rebirth, birth and death is called Karma which Buddhism also follows, except they do not believe in a soul, but instead the five skandhas which are woven together and make a person attract karma. These two religions are heavily followed in the eastern part of the world and so therefore it may be argued that because it is an accepted belief it is therefore normal to believe in such an idea, however in the western part of the world where religions such as Christianity are followed it is not as accepted.Some would also question the fairness of suffering in this life for something in a past life which they cannot remember and that punishment doesn’t have a value unless you understand what it is for; it needs to be associated with something. However, Hindus would argue that karma is not seen as a punishment; it is just bearing out the k armic fruits and is a part of the Natural Law, and if you can’t remember a past life, that is a sign of wisdom. There have been cases where reincarnation has been seen to be identified, for example by an American professor of psychiatry, Ian Stevenson.He wrote a book, ‘Twenty cases suggestive of reincarnation’, where he looked at cases where people had seen to be reincarnated from someone else in the past from India, Ceylon and Brazil. He used examples of children to make his judgement more reliable as they would not be influenced by society or money in such a way that adults might. In one case there was a boy, Imad, who talked about a family whom he used to live with, and the family had no connection to this other family at all.He gave the name of where he lived and the family name, events and people that he knew there, and could even direct them to the area of where he used to live. Stevenson later found out that a man, Ibrahim, had died there and which matched up to all the events that the man had seen. The reincarnation was not immediate but was nine years later. This extraordinary case gives strong belief that reincarnation is true. However philosopher John Locke studied Steveson’s book and suggests that the dead person has left behinf some psycic traces or husks and therefore has a ‘memory’ of the previous life, and is therefore not reincarnated.Reincarnation completely goes against the teachings of many other religions, such as Christianity, Islam and Judaism as resurrection is the key to their religion. Without resurrection there would be no point to the religion. For Christianity, Jesus rose from the dead and ascended into heaven, so too will we come to resurrection at the end of time, when Jesus returns to the Earth. When the dead will rise from their graves and will be called up to God to be judged and the bad will then â€Å"go away to eternal punishment, but the righteous to eternal life†.Fundamentali st Christians believe exactly what the Bible says and therefore will believe that we will rise again in physical forms as Jesus did. If this is the case, it implies that after death there is some sort of space and that they take up room, so where would this be? Would it have a climate or shelter? And famously Peter Cole said if we are all physical bodies then you ‘will have to queue to see Jesus’. Hick is a more modern philosopher, who came up with the idea of the Replica Theory. Despite not believing it himself, he described it as a thought process that tackles the idea of resurrection.If John Smith disappears from one place and appears in another with exactly the same DNA, personality and physical matter, we must conclude that this is the same man, John Smith. then let’s say if this happened, but instead of another earthly location, John Smith appeared in a resurrection world. It is the same man again, but in another world entirely. An issue with Hicks theory i s that, how would we be recreated in the other place, and surely a replica of someone would have exactly the same bodily problems as the original person. If someone was ying for example, their replica would also be dying as it is exactly the same. But Hick also brings up the idea that we have a new resurrection body created by God that is without earthly defects. A more viable answer to resurrection that some Christians believe is that the soul is resurrected and that spiritual body will live on. The idea that the resurrected body will be forever in eternal life links in with Kant’s idea of the Summum Bonum which is the highest good, in heaven, and suggests that because there is terror in the world, once resurrected with God, He will make everything alright.In conclusion, reincarnation seems to be more likely to be true than resurrection due to the fact that resurrection brings out more questions than answers to it, rather than a simple concept of karma. Studies have been exa mined with reincarnation, and not in resurrection which gives more evidence for the theory of reincarnation to be true. Reincarnation may seem prominent in many peoples’ lives without knowing it as deja vu may be a sign of this, which I can relate to myself.
Wednesday, October 23, 2019
Internal Control Essay
1. Inform the President of any new internal control requirements if the company decides to go public. As per the accident that happened in the company about some employees was viewing pornography on company computer and he had a hard time to get his employees admitted that they were the one who doing it. He should use limit access by individual passwords for each person to log in the computer systems. To make sure that which person was log on in the computer and do bad thing during that period. 2. Advise the President of what the company is doing right (they are doing some things well) and also recommend to the President whether or not they should buy the indelible ink machine. When your advice the President, please be sure to reference the applicable internal control principle that applies. From the passage that the accountant has recently started using prenumbered invoices following by the principle of internet control activities. Please find the Documentation Procedures passage below. From the passage, the president wants to buy an indelible ink machine to print their checks. In my opinion, I would like to recommend that he should buy an indelible ink machine following by the principle of internal control activities. Please find the Physical Controls passage below. Principles of internal control activities Documentation Procedures Companies should establish procures for documents. First, whenever possible, companies should use prenumbered documents, and all documents should be account for. Prenumbering helps to prevent a transaction from being recorded more than once, or conversely, from not bring recorded at all. Second, the control system shown that employees should promptly forward source documents for accounting entries to the accounting entries to the accounting department. This control measure helps to ensure timely recording of the transaction and contributes directly to the accuracy and reliability of the accounting record. Require use prenumbered checks and account for them in sequence; each check must have an approved invoice; require employees to use corporate credit cards for reimbursable expenses; stamp invoices â€Å"paid†. Physical Controls Store blank checks in safes, with limited access; print check amounts by machine in indelible ink. 3. Advise the President of what the company is doing wrong (they are definitely doing some things poorly). Please be sure to include the internal control principle that is being violated along with a recommendation for improvement. Following from the passage that they have one accountant who serves as Treasurer and Controller which streamlines many of their processes. In this dual role, he purchases all of the supplies and pays for these purchases. He also recieves the checks and completes the monthly bank recommendation. The accountant is so busy that the company handels pretty cash a bit differently. He should asign duties to more than one person not only one because it hard for one person to control and serves as treasurer and controller in the same time. Following by Principles of internal control activities. Please find Segregation of Duties and Establishment of Responsibility passage below. From the following passage that all employees have access to the petty cash in a desk drawer and are asked to only place a note if they use any of the cash. In my opinion, he should limit access to the petty cash in a desk drawer, only one person could have responsible for the petty cash. Following by Principles of internal control activities. Please see the Establishment of Responsibility passage below. Principles of internal control activities Segregation of Duties Different individuals approve and make payments; check singers do not record disbursements Segregation of duties is indispensable in an internal control system. There are two common applications of this principle: 1. Different individuals should be responsible for related activities. 2. The responsibility for record-keeping for an asset should be separate from the physical custody of that asset. The rational for segregation of duties is this: The work of one employee should, without a duplication of effort, provide a reliable basis for evaluating the work of another employee. Segregation of related activities making one individual responsible for related activities increases the potential for errors and irregularities. Establishment of Responsibility An essential principle of international control is to assign responsibility to specific employees. Control is most effective when only one person is responsible for given task. Establishing responsibility often requires limiting access only to authorized personnel, and then identifying those personnel. Only designated personnel are authorized to sign checks (treasurer) and approve vendors. Compare checks to invoices; reconcile bank statement monthly
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