A Book Keeping Error

In: Business and Management

Submitted By arkabhuiya
Words 267
Pages 2
Article 5. A Book-Keeping Error (The Economist, 30th August 2007)
Key Points of this article are: “How far the Fair-Value Accounting System should be pushed in banking sector”.-this is the main issue
More accurate disclosures are better according to some bodies those are setting the standards.
The commercial banks are very reluctant to expose the idiosyncrasies of their loan books to the glare of market scrutiny. How the article relates to the theory:
There are reasons behind the attractions of the fair-value accounting system. Based on the current market prices, the commercial bank shows the actual historical cost and the financial health of a firm. And by taking the arbitrary dates, the calculation of the net worth becomes easy. As shown in the accounting principles, a firm’s viability become simple by the fair-value system and the shareholders along with the regulators spot their financial trouble quickly.

Implication to Management Practices:
In case where market value is rising, if loans are being valued at their historical cost, they are likely to be sold. No matter the market is undervaluing them; this is the only way of realizing profit.
As bringing the idea of frictionless economical closer may magnify the effect of remaining distortions; it’s not needed to eliminate a single market imperfection.
Evaluation:
The article focused on the practical and the theoretical aspects of the fair value system of book keeping. This paper also draws some underlines on market liquidity that has painfully been learned during market troubles many times.

Bibliography
The Economist. (30th August 2007). A book-keeping error. Economic Focuses .…...

Similar Documents

Keeping the Faith

...Sunday Service (October 7, 2012) April Jade Bonoan How to Keep the Faith and Finish and Finish the Race. The Book of Hebrews is known for Its Hall of the Fame – the list is long in chapter 11 of the book of names of people of old who because of their faith made their way into God’s honor roll of the faithful. Reading the entire chapter, it made me wonder how they kept the faith. Today we are going to study the twelfth chapter of Hebrews. First thing we have to do is I. Have a Proper Start How we start determines how we end. Before we run the race, we have to let go of certain things. A lot Christians instead of having a proper start found themselves running yet stopping in the middle of the race. And once they stopped it was so hard to regain the track. Paul encourages his readers to lay aside every weight, and the sin that so easily ensnares. To finish the race is another way of saying that we have kept the faith. “I have fought the good fight, I have finished the race, I have kept the faith. “ – 2 Timothy 4:7 A. Dead Works - The weight that Paul was referring to here that we should lay aside, is not a sin. These are what we call the dead works. The bible says in 1 Corinthians 10:23 that all things are permissible, but not all things are beneficial. These are things that we could live better without. Just like in a race, the athletes have a choice what kind of clothing they would wear, but if they wanted to win, they must choose the light fabric. There are......

Words: 2258 - Pages: 10

Medication Error

...From Medscape Nurses Medication Error Prevention for Healthcare Providers Faculty and Disclosures CE Information There are between 44,000 and 98,000 individuals who die every year in hospitals due to preventable medical errors.[1] It has also been reported that this is only part of the problem, as thousands of other patients are adversely affected by medical errors or barely avoid injuries that are nonfatal.[2] These medical errors not only cost the loss of lives, but carry a financial burden that is estimated to be in a range of $17 billion to $29 billion annually. Additionally, there is physical and psychological pain and suffering related to these errors.[1] Another consequence is that medical errors diminish trust and satisfaction in the healthcare system and in healthcare professionals.[1] Ginette A. Pepper, PhD, RN, FAAN, a Professor and Helen Lowe Bamberger Colby Presidential Endowed Chair and Associate Dean for Research, University of Utah College of Nursing, Salt Lake City, spoke on medication safety for the geriatric nurse practitioner (GNP).[3] Dr. Pepper was trained as a pharmacologist with a nursing focus. She was one of the first NPs to add "geriatric" to her title as well as one of the first NPs to have prescriptive authority. Safety Principles and the Medication Use Process Dr. Pepper noted that safety issues are of the utmost importance for all healthcare providers.[3] Nursing as a profession has a long history of regarding patient safety as a......

Words: 4864 - Pages: 20

Strategy Errors

...10 Strategy Magazine www.sps.org.uk I Issue 28 I March 2012 Were strategy errors behind the crisis? While the 2008 crash and its aftermath are inextricably linked in the public’s view with ‘greedy bankers’, the conditions for a recession were already present in other sectors. Disasters like Northern Rock and Royal Bank of Scotland were caused not by banking blunders but basic errors of strategy. By Kim Warren H ad the recent crisis been limited to banking, as most of the public believes, the downturn may have been less destructive. However, mistakes occurred in other sectors, even among otherwise successful companies. Spectacular cases may hit the media but they are only the visible tip of a large iceberg of strategy errors that damage value across all sectors. Starbucks, for example, has mostly been outstandingly successful, but its recent history shows costly errors. Not only did the company suffer a major drop in profits during 2008-09, but it also had to close more than 500 underperforming stores – stores previously opened at a cost to shareholders of hundreds of millions of dollars. Its smaller UK rival, Costa Coffee, suffered no such collapse in profits, even though its market also saw a drop in consumer confidence. Starbucks’ error is all the more remarkable because, just a few years earlier, McDonald’s publicly explained that it had made exactly the same mistake. Problems do not just show up in recessions. In 2005, eBay acquired Skype for $2.6 billion,...

Words: 2059 - Pages: 9

Keeping the Past

...located was originally granted to former NSW Corp member Jonas Bradley in 1818. The Bradley Family lived in the house until 1858. – Bungarribee House, Doonside Road, Doonside, NSW 2767. This house provides the residents of Blacktown and its surrounding suburbs a rare and intact view of an early homestead from 1822. – Vinegar Hill, 712 Windsor Road, Kellyville, NSW 2155. The battle of vinegar is regarded as a very important battle, as it was the site of the first ever military battle to have taken place on Australian soil. This took place in 1789. ii) The first resource that can help is the NSW State Heritage Register. The Register has details on all the heritage listed items from Federal down to Local. The next source is the book “Australia's Blacktown from 1788” that is written by Collinridge Rivett. The third resource is the NSW State heritage Register, which holds information on heritage listed items. iii) Timeline 1788 - First Fleet Arrival to Australia 1791 - Governor Phillip started to grant land around Blacktown 1798 - Battle at Vinegar Hill 1818 - Merriville House built 1819 - Land granted to two indigenous men (Colebee and Nurragingy) 1822 - Bungarribee House Built 1862 - Blacktown named “Blacktown” 1906 - Shire of Blacktown formed 1930 - Electricity was bought into the town 1973 - WestPoint Shopping Centre opened Reference List: Blacktown City Council History Page.......

Words: 1322 - Pages: 6

Error Avoidance

...Error Avoidance Beth Burhans MHA 601 Principles of Health Care Administration Dr. Tricia Devin September 16, 2013 Error Avoidance There are errors in all ways of life and in all industries and workplaces. Some errors are unavoidable, while many errors are avoidable whether through planning and strategy or better training practices. In the healthcare field, errors can be very simple and not have a big impact, or they could be so significant that they could result in loss of life. As an administrator of a healthcare facility, it is imperative that the procedures, training, and regulations are updated and followed throughout every level of the facility from the maintenance crew, non-clinical staff, clinical staff and nurses and on up to the doctors themselves. The first error that could be avoided involves the operation of machinery and the employee attempting to create work around procedures on their own to enhance their own production (Johnson, 2009, p. 80). Although this sounds like a positive initiative on the part of the employee, this could prove dangerous if the proper safe guards are not being followed concerning the machinery involved. When shortcuts are taken, there is usually a consequence that will have to be paid, whether it shows up immediately or somewhere down the road. The next error that could be avoided involves “putting all employees through the same orientation program regardless of cultural interpretations of organizational hierarchies”......

Words: 1259 - Pages: 6

Medication Errors

...Medical errors have and continue to be an enormous problem in health care. Patients die from the wrong drug or wrong dosage, or perhaps an infection that could have been prevent with better hygiene practices. More attention was placed on the issue of medical errors in 2000 when the Institute of Medicine made available the well-known report titled “To Err is Human: Building a Safer Health System”. The report documented evidence of an estimated 44,000 people and as many as 98,000 people dying in hospitals from medical errors each year in the United States (IOM, 1999). Of the many medical errors, medication errors happen to be one that can not be overemphasized. Medication use have been found to account for at least 20 percent of adverse events in patients in hospitals. Out of every hundred medication orders, there is an occurrence of five adverse drug events (Tam, 2005). Malpractice claims due to adverse drug events can have negative effects on the hospital and the health care providers. The hospital and health care providers can have their reputation damaged, thousands of dollars are spent for the losses, there is time lost from work, not to mention the emotional stress involved (Rothschild et. al, 2002). The cost of preventable medication errors has been estimated between 17 and 29 billion dollars annually (Strohecker, 2003). As such, due to these alarming statistics, this paper focuses on some of the potential risks of medication errors, and some recommended interventions...

Words: 839 - Pages: 4

Keeping Track

...IT426-1303A-02 System Integration and Organization Deployment Keeping Track Josh. Falwell August 12, 2013 Some of this paper has been recited from IT426-1303A DB 2-3 Table of Contents Project Outline 3 Integration Model and Tasks 4 Standards and Regulations 10 Support Strategies 9 Best Practices 13 Cultural Implications 16 Project Outline For this project it has been brought up by The National Transportation Safety Board that there needs to be a better way of keeping an accurate count on passengers. The reason for this in 2011 an Amtrak passenger train was struck by a semi-truck. When this happen it took Amtrak two full days to account all the passengers that where on the train, then after they had their final count they come to realize that there were two people missing from the train. With this project the integrated software for security will track all passengers at all times during the travel on Amtrak trains. With this when a customer will purchase a ticket from Amtrak all there information will be encoded on the ticket. With this ticket it will be the only way that passengers will be able to open any door within the railcar. When a passenger has to go from one passenger car to another they must use their ticket with the encoded information in the barcode to open the door. Also with this Amtrak will be able to store all this data on their serves also be able to pull this data at any given time. Now for instants if there was a derailment,......

Words: 4161 - Pages: 17

Error Forecasting

...MEASURING FORECASTING ERROR (The students are advised to refer to the book under reference for details.) Because quantitative forecasting techniques frequently involve time series data, a mathematical notation is developed to refer to each specific time period. The letter Y will be used to denote a time series variable unless there is more than one variable involved. The time period associated with an observation is shown as a subscript. Thus Y1 refers to the value of the time series at time period t. The quarterly data for the Outboard Marine Corporation presented in Example 3.5 (see p. 73) would be denoted Y1 = 147.6,Y2 = 251.8, Y3 = 273.1, ... , Y52 = 281.4. Mathematical notation must also be developed for distinguishing between an actual value of time series and the forecast value. A^ (hat) will be placed above a value to indicate that it is being forecast. The forecast value for Yt is Yt^. The accuracy of a forecasting technique is frequently judged by comparing the original series Y1, Y2, ... with the series of forecast values Y^1, Y^ 2, .... Basic Forecasting Notation Basic forecasting notation is summarized as follows. Yt = value of time series at period t t = forecast value of Yt et = Yt - Yt^ = residual, or forecast error Several methods have been devised to summarize the errors generated by a particular forecasting technique. Most of these measures involve averaging some function of the difference......

Words: 778 - Pages: 4

The Error

...Alzheimer's. There are many different causes of memory loss. If you or a loved one is experiencing symptoms of dementia, it is best to visit a doctor so the cause can be determined.  | | | Microscopic changes in the brain begin long before the first signs of memory loss.The brain has 100 billion nerve cells (neurons). Each nerve cell connects with many others to form communication networks. Groups of nerve cells have special jobs. Some are involved in thinking, learning and remembering. Others help us see, hear and smell.To do their work, brain cells operate like tiny factories. They receive supplies, generate energy, construct equipment and get rid of waste. Cells also process and store information and communicate with other cells. Keeping everything running requires coordination as well as large amounts of fuel and oxygen.Scientists believe Alzheimer's disease prevents parts of a cell's factory from running well. They are not sure where the trouble starts. But just like a real factory, backups and breakdowns in one system cause problems in other areas. As damage spreads, cells lose their ability to do their jobs and, eventually die, causing irreversible changes in the brain.The role of plaques and tangles  Plaques and tangles tend to spread through the cortex as Alzheimer's progresses.  Two abnormal structures called plaques and tangles are prime suspects in damaging and killing nerve cells.Plaques are deposits of a protein fragment called beta-amyloid (BAY-tuh......

Words: 1086 - Pages: 5

A Book Keeping Error

...Article 5. A Book-Keeping Error (The Economist, 30th August 2007) Key Points of this article are:   “How far the Fair-Value Accounting System should be pushed in banking sector”.-this is the main issue More accurate disclosures are better according to some bodies those are setting the standards. The commercial banks are very reluctant to expose the idiosyncrasies of their loan books to the glare of market scrutiny. How the article relates to the theory: There are reasons behind the attractions of the fair-value accounting system. Based on the current market prices, the commercial bank shows the actual historical cost and the financial health of a firm. And by taking the arbitrary dates, the calculation of the net worth becomes easy. As shown in the accounting principles, a firm’s viability become simple by the fair-value system and the shareholders along with the regulators spot their financial trouble quickly. Implication to Management Practices: In case where market value is rising, if loans are being valued at their historical cost, they are likely to be sold. No matter the market is undervaluing them; this is the only way of realizing profit. As bringing the idea of frictionless economical closer may magnify the effect of remaining distortions; it’s not needed to eliminate a single market imperfection. Evaluation: The article focused on the practical and the theoretical aspects of the fair value system of book keeping. This paper also draws some underlines on......

Words: 267 - Pages: 2

Keeping Google

...that they are not left out in decision making. It makes them feel a part of the organization. d) It also outlines the management role as critical decision makers, which may drive them into being more responsible. e) It provides an interactive platform between management and other staff. f) It also checks on how employees work, thereby, assuring accountability. On the contrary, the approach has the following disadvantages: a) It has a possibility of killing staff morale in case views of some are not represented and put into effect. b) At times when discussions are too long, the decision making process may still be too slow.                             Reference   Groysberg, B. Thomas, D. A. & Wagonfeld, A. B. (2009). “Keeping Google “Googley” ​(Abridged).” Harvard Business School, 9. 409-099...

Words: 954 - Pages: 4

Books in Digital Error

...of Printed Books in the Digital Age Name Institution Date of submission Once upon a time printed books were the undisputed medium of expressing literary culture, as well as source of information and knowledge. Books were a central part of the society acting as a vehicle for carrying and disseminating histories, ideas, stories, and pictures. However, over the centuries, the literary culture of reading and relying on printed books as the primary source of information has gradually changed. The digital age is populated with technology, which has revolutionized all aspects of lifestyle. Thompson (2005) notes that one of these aspects is the culture of reading printed material from books and other sources. In this digital age, information is readily available on the internet merely by a click of a button. This is not only convenient, but also consume less time as opposed to the earlier eras where one would take time and go to the library, search for a book, and finally read to get the required information. As a result, books are becoming less and less desirable as their future is overtaken by the digital sources of information. Today, e-books have replaced the printed version of books particularly with the invention and popularity of tablets and iPads that are perfect carriers of e-books. E-books are on the rise as the sales of printed books decrease, and soon they will completely replace the printed versions. For instance, in 2003, the sales of printed books decreased......

Words: 658 - Pages: 3

Book

...for damages. The author has asserted her right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First edition 1999 Second edition 2003 Published by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 1-4039-1135-5 A catalogue record for this book is available from the British Library. This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. 10 9 12 11 8 7 10 09 6 08 5 07 4 06 3 2 1 05 04 03 Acknowledgements The author would like to thank the following: TMP Worldwide Research, 32 Aybrook Street, London W1M 3JL (tel. 0171 872 1500), for permission to reproduce their data on ‘soft skills’ and employment. Lynn Chiswick, for her full encouragement and support for Skills for Success when all I had to show her were a few pencil-and-paper sketches and a lot of enthusiasm. Robert Simpson, Pam Dixon and David Gosling for helpful comments on the first edition of the Handbook. The many lecturers at UEL who used Skills for Success and the other materials......

Words: 19814 - Pages: 80

The Standard Error of Regressions

...Journal of Economic Literature Vol. XXXIV (March 1996), pp. 97-114 The Standard Error of Regressions By D E I R D R E N . M C C L O S K E Y and STEPHEN T. ZILIAK University of Iowa Suggestions by two anonymous and patient referees greatly improved the paper. Our thanks also to seminars at Clark, Iowa State, Harvard, Houston, Indiana, and Kansas State universities, at Williatns College, and at the universities of Virginia and Iowa. A colleague at Iowa, Calvin Siehert, was materially helpful. T cant for science or policy and yet be insignificant statistically, ignored by the less thoughtful researchers. In the 1930s Jerzy Neyman and Egon S. Pearson, and then more explicitly Abraham Wald, argued that actual investigations should depend on substantive not merely statistical significance. In 1933 Neyman and Pearson wrote of type I and type II errors: HE IDEA OF Statistical significance is old, as old as Cicero writing on forecasts (Cicero, De Divinatione, 1. xiii. 23). In 1773 Laplace used it to test whether comets came from outside the solar system (Elizabeth Scott 1953, p. 20). The first use of the very word "significance" in a statistical context seems to be John Venn's, in 1888, speaking of differences expressed in units of probable error; Is it more serious to convict an innocent man or to acquit a guilty? That will depend on the consequences of the error; is the punishment death or fine; what is the danger to the community of......

Words: 10019 - Pages: 41

Book

...56 8 THEORY OF LEAST SQUARES ................................................................................ 57 Method of least squares ................................................................................................ 57 Properties of estimators................................................................................................. 58 Small sample properties ............................................................................................ 58 Bias ....................................................................................................................... 58 Efficiency .............................................................................................................. 58 Mean square error ................................................................................................. 59 Large sample properties ............................................................................................ 59 Consistency ........................................................................................................... 59 ˆ Mean of the sampling distribution of β ................................................................... 63 ˆ Variance of β ............................................................................................................ 63 Consistency of OLS .................................................................................................. 64 Proof of the Gauss-Markov Theorem ..........

Words: 75823 - Pages: 304