Sunday, March 22, 2020
Why Accountability Is Important Essay Why Accountability Is Important It is important to note first, what accountability is. I will state why it is important as well as go over scenarios in dealing with accountability. Accountability means being liable to being called to account; answerable. A good military definition of the word would be and usually means to be liable for paperwork and or property, and personnel; usually of lesser grade and rank. When dealing with army leadership and duties; being a soldier and or a leader means being accountable for what you do or donÃ¢â¬â¢t do as well as implied duties and responsibilities. As a leader, being one means to be accountable not only for oneÃ¢â¬â¢s actions, but for the actions of the soldiers for which you are assigned. One is to be accountable for equipment that is assigned to oneÃ¢â¬â¢s-self as well. The department of defense states and defines accountability to be an obligation imposed by law or lawful order or regulation on an officer or other person for keeping accurate record of property, documents, or funds. The person having this obligation may or may not have actual possession of the property, documents, or funds. Accountability is concerned primarily with records, while responsibility is concerned primarily with custody, care, and safe-keeping. But again, let us not get the definitions confused. The term accountability differs from the term of responsibility. There is a big difference. There are reporting procedures and processes for recording and accounting for personnel and equipment. There are different types and ways of reporting within different sizes and types of elements of a command. We will write a custom essay sample on Why Accountability Is Important specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Why Accountability Is Important specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Why Accountability Is Important specifically for you FOR ONLY $16.38 $13.9/page Hire Writer There are also ways in which one will report to one who is in a designated duty position and or of higher rank and grade within different elements of commands. The ways in which a soldier may report can be orally or written in order to account for property, equipment, and or personnel. Soldiers must always be accountable for their actions. For every action there is a reaction. Soldiers are to be held to accountable for their actions because they represent the United States of America within the states as well as overseas in other parts of the world. Sometimes, we are the only source of information as to how people may think what our behavior is and how all other Americans may behave in their own country based off of even one soldierÃ¢â¬â¢s sole actions whether negative or positive. We must be accountable for what we do or donÃ¢â¬â¢t do. If we, as soldiers, are assigned a task that is to be completed, but we fail and do not get it accomplished, then we have to account and answer for it. If we lose a piece of equipment, it becomes lost or destroyed, we have to be held accountable for it and solve the problem to correct the situation however it may need to be corrected. Mission readiness is the answer to why accountability is so important. We must accomplish the mission at all costs with the least amount of loss whether it be soldiers or equipment. Without all of the soldiers or equipment present the mission may not be able to be accomplished. Even if only one soldier or piece of equipment is not present the mission may not be fully capable of being accomplished as the lack of either one would be detrimental to the mission. If a piece of equipment or a soldier is not on time at the start or finish of a mission, it may determine the outcome of the mission in regards to it being accomplished and a success or not. Either way, to be accountable for the pieces of equipment or the lack of soldiers present means providing an answer to someone else whom will have to be accountable for them to another. One will wish to know why a mission was not accomplished. A superior ranking individual will wish to know for sure. One who is accountable must have an answer. If we are not held accountable for our actions then someone else takes the blame or we never except responsibility for them and may become a pattern. If this happens, then we cannot correct the problem that causes the accountability error from the start. This would be due to a cognitive lethargic display of thought processes and or apathy. If it is not the sole cause, but a contributing factor then other problems that affect a soldiers or leaders life may be the main causal factor in not being held accountable for their actions. Someone is always accountable and answerable to the next one in a chain of command. When the answer is needed, an entire chain of command as to why and how a mission did not attain a status of successful or completed, it affects the entire chain of command and the army itself when you really think about it. One could debate about it in regards to the butterfly effect; or the chaos theory. The theory that one small move such as the flap of a butterfly wing or a car accident effects all of us on a world-wide level even though it may seem miniscule in nature. Leaders must be accountable for discipline, leadership, and training of the soldiers. While soldiers are accountable for their actions, equipment, and sometimes when directed, the actions of others; so are leaders for their subordinates actions and so forth up the chain of command. This is all an example of accountability. If we did not have this accountability in process as a standard in the United States Army then we would not be the successful fighting force that we are today. Leaders are under the most stress as they are held accountable for more actions than their soldiers. They are also responsible for training and mentorship of soldiers. They must lead and develop them to become better soldiers and future leaders themselves. Leaders have many duties and responsibilities that they must be accountable for. Keeping accountability of not only people, but equipment also helps cut down on waste. Fraud waste and abuse is a big deal in the army as there are rules and regulations to address these concerns within the army as it is written doctrine. Do you have any idea how much it would cost to replace all the equipment and people lost if leaders simply never noticed they were gone and constantly had to replace them? One of the United States militarys biggest concerns is to never leave a man behind, dead or alive. It is perhaps this knowledge that they will never be left which keeps many troops confident in their job. How hard would you fight if you knew that your life was expendable and should you go missing, you would be written off and forgotten? I know for myself that I would not fight very hard if nobody cared about me in general. Accountability is one of those ways to show subordinates that you do care about them. Others may look at it in a negative way. They may say that, Ã¢â¬Å"Man, he is always on my case about where I am and this and thatÃ¢â¬ , but this is a way to know that one is being cared for. Knowing where items and troops are keeps superiors able to know what can be accomplished and planned as far as missions and tasks. How could a plan be carried out to its full potential if the equipment type and capability and an account for soldiers is not known as well? It would be impossible to get an accurate account in order to plan with without knowledge of this information. Having an account of this information also keeps the army nformed of how many more or less soldiers are needed to accomplish a mission or task. There is paperwork to be processed to help keep accountability for all of the personnel and equipment within any given unit or command group. If property is lost damaged or stolen, one will be held accountable for those issues in regards to them as well. If there is an investigation on the soldier(s) or piece(s) of e quipment, CID will be in charge and held accountable for the investigation. Everyone plays a part in accountability on some level, one way or the other.
Thursday, March 5, 2020
Legalization for an Ancient Plant argumtative essay essays Legalization for an Ancient Plant (Cannabis Sativa) Marijuana is a controlled substance that should be legalized for medical and recreational use by responsible adults. With the Marijuana proposition coming up on the November ballot for legalization of up to 3 ounces. If approved, could generate massive tax dollars for the state of Nevada. Legalization would also remove a great tax burden from the state for imprisoning and supporting marijuana offenders. Any discussion of marijuana should begin with the fact that there have been numerous official reports and studies, every one of which has concluded that marijuana poses no great risk to society and should decriminalized. (The National Academy of Sciences) "Analysis of Marijuana Policy"(1982) In this argumentative essay, I will discuss the history of marijuana, the effects of marijuana, the ways that marijuana could be utilized in the medical field, and will discuss the reasons that marijuana should be legalized. Marijuana is defined by (dictionary.com), as a strong smelling plants from whose dried leaves a number of euphoria causing and hallucinogenic effects. The synonyms for marijuana are marihuana, ganja, pot, grass, weed, dope, skunk, Mary Jane, and Cannabis Sativa. The plant has been grown for fiber and as a source of medicine for several thousand years. The first uses of cannabis as a medicine are believed to be as an antiseptic and analgesic. Over the years marijuana has been used to treat sore eyes, earaches, edema, inflammation, hemorrhoids, asthma, skin diseases, cholera, stimulate an appetite and even to ease the pains of labor. In the 20th century, the advancements in medicine have allowed doctors to find many more uses for this miracle plant. By isolating the active drug in the marijuana plant doctors have been able to synthesize this drug. Although they have found ways to replicate the drug, it has not been as productive as the smok...
Tuesday, February 18, 2020
It is a mooting - Essay Example Therefore, the University cannot exclude itself for any liability as a result of negligence, based on the provisions of term (c) of the tenancy agreement since it does not satisfy the requirements of liability, specifically, Schedule 2(a), which requires that for reasonableness to be satisfied, both parties ought to have bargaining positions relative to each other with regards to the availability of any alternative means via which the requirements of the customer could have been met. This is supported by Phillips v Hyland  1 WLR 659. Ms. Edwards did not have bargaining power relative to that of the University of East England. With regards to other alternatives, she did not have any other since the University of East England offer was the cheapest, which Ms. Edwards could not find anywhere and as such it seems she was under some sort of pressure. According to Schedule (d), for term c to be deemed reasonable, it must be satisfied that at the time of the contract, compliance to th at term would have been practical. This is supported by Smith v Eric S Bush  UKHL 1 2. ... If it pleases you My Lady, I will start with my first submission My Lady, the appeal before you is for the determination of whether a judge in a trial court erred in law in his decision in favor of the respondent, Ms. Edwards. The Appellant, the University of East England argue that, the trial judge erred in law in his determination that a term in a tenancy contract between the University of East England and Ms. Edwards , specifically term (c), which states, c) In the agreement, the University dissolves itself from taking any responsibility in case of damage to a studentÃ¢â¬â¢s property within its premises, was Ã¢â¬Å"unreasonableÃ¢â¬ . According to the Appellant, the University of East England, that term, (c), of the tenancy contract satisfies the thresholds for reasonableness on the basis of Section 2(1-2) of the UCTA 1977. We contest this notion and affirms that, the trial did not make in error in law on the basis of Section 2(1-2), which states, In the case of other loss or d amage, a person cannot so exclude or restrict his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness. We argue that, the University cannot exclude itself from liability arising from any loss or damage caused by negligence based on term (c) of the tenancy contract since it does not satisfy the requirements of reasonableness. My Lady, Schedule 2(a) of the UCTA 1977, requires that, for a term in a contract to be deemed reasonable, both parties ought to have bargaining positions relative to each other with regards to the availability of any alternative means via which the requirements of the customer could have been met. This was held in Phillips v Hyland  1 WLR 659, where, Lord Justice Slade, Mr. Justice Neill and Sir John Megaw, held in
Monday, February 3, 2020
Design of Motor Speed Sampling, Amplification, Filtering and Display - Essay Example On the other hand, the display circuit performs digital functions by showing the alpha numeric digits. The distinctive design of the electronic circuits for the control of motor speed control and the subsequent display is the physical approach used in the creation of physical circuits that also check the variations in behavior of various electronic components with close reference to their working. Therefore, the required system is an effective remote controlled DC motor with a speed display on seven segments with the D type flip flop. This type of circuit can be categorically divided into two parts; the PWM generator and the IR transmitter. Additionally, there are a number of ways that the remote control can be used. However, we shall deploy the use common approach of the NE555 with the combination of various components in both modules as illustrated below: Particularly, 555 is widely used for the frequency oscillation and can be obtained through the different frequency range according to the need by changing its subsequent duty cycle. The first part of the circuit is generated by the PWM and this is the input of the second model. Conversely, the second model is responsible for the transmitting of wireless signals at a 38 kHz range. Noteworthy, duty cycles can be changed by the trimming of RV2 variable resistance while the D3 is the IR diodes transmit signals (Krishnan, 2010, p.7). On the other hand, the second circuit represents the response from the first circuit and it receives signals using the IR sensor. These signals are later converted to signals that result in the subsequent motion of the motor. Generally, this represents the remote control switch which is tasked with the conversion of low frequencies into significantly lower voltages between 2v to 5v. This concept is illustrated below: Functionally, Q2 is an IR sensor that receives the transmitter signals and switches the 2N2222A transistor. Therefore, the voltage
Sunday, January 26, 2020
Effect of Contract Based Labourers on Indias Automobiles Research Question: How are contract based labourers affecting the productivity of Indian automobile industry? Introduction Research Origin and Focus Area of Research The employment structure in the Indian scenario has been undergoing certain changes due to globalization. The firms in order to be competitive in a global market should have the flexibility relating to labour, capital and various bureaucratic procedures. Only then can it adapt itself to the rapidly changing environment and thereby stay ahead. Although, it has been said that the stringent labour laws not only put the domestic producers at a disadvantageous position but it is also one of the primary factor causing less inflow of foreign direct investment and eventually impact adversely on investment, output and employment. As a result, number of countries has amended their labour laws so as to make them more investment and employment friendly. This has thereby led to different non-permanent employment structures, such as casual labour, contract labour, subcontractors, consultants and others, among which contract labour is the most prominent kind in the Indian industrial sector and in this paper I primarily focus on the Indian automobile sector only at present. In this research, the point to be noted is the contractual employment which is in accordance to the Contract Labour Regulation and Abolition Act, 1970. According to the law, a contract labourer is defined as one who is hired in connection with the work of an establishment by a principal employer through a contractor. Although a contractor tries to produce the given results with the help of a contract labour for the organisation, a principal employer is the person responsible for the control of an establishment. Over the years the pace of contracting has increased dramatically both across borders as well as within. The research will be dealing with the effect of these outsourcing activities. According to the WTO-ILO report (2009), contracting has largely taken place in the emerging economies. Now what could be the consequences of contracting on the labour productivity of a particular firm within the country is what this research paper will be discussing about. Although a lot has been discussed about the rights in terms of wages and other emoluments for the contractual labour, not much has been said about the productivity of the contractual labour. Much has been said recently about the slowdown in the Indian automobile industry, in fact this sector of the Indian manufacturing industries has recorded its lowest point in terms of growth past year. In this research paper, I have taken up the issue of subcontracting of labourers as the one of the primary reason for this lag in productivity. The organised auto sector in India broadly consists of three tiers and the Original Equipment Manufacturers (OEMs) sit at the top of the chain. Most of these OEMs are members of the Society of Indian Automobile Manufacturers (SIAM), while most of the tier 1 auto component manufacturers are members of the Automobile Component ManufacturersÃ¢â¬â¢ Association (ACMA). Tier-2 and Tier-3 auto-component manufacturers are relatively smaller players. To assess the importance of the sub sectors in terms of generation of employment, it is essential to analyse the intensity of labour employment in these sectors. There is a concern in the industry that wages are growing for the permanent labours without proportionate increase in the productivity front. As a result, higher subcontracting takes place in order to curb wage costs both in the periphery as well as in the core sector. Contract labourers, paid comparatively much lower than the permanent employees and enjoying hardly any other benefits, make up 70-80% of the industry workforce, according to estimates by trade union leaders. The underlying tension between their aspirations and outdated labour laws cause dispute and de-incentivise work effort and lowering productivity. Literature Review In order to proceed with the analysis of subcontracting and productivity, there are literature which illustrate the importance of investment in RD. Romer (1990) has stated on the Ã¢â¬Å"endogenous technological changeÃ¢â¬ and hence proved how RD plays an instrumental role in accelerating long run growth of a country. Thereafter, many works have been published citing the role of variable factors on RD and long term growth, which varies from economy to economy. Scholars like Goo (2011) mentioned the effects of transportation costs in RD technology sector on the endogenous growth. He showed that larger the transportation costs of RD technology, larger will be the price of RD technology and hence leading to slower economic growth. Lee (2005) empirically showed a direct and much stronger effect of information networks on international RD. Research in relation to this field by eminent economists has also discussed the strategically important interactions of firms and their implication of RD of firms and the performances. Grossman and Helpman (2002, 2003), Egger and Egger (2003), Shy and Stenbacka (2003) and Antras and Helpman (2004) established the positives of outsourcing over any other organizational structures, for example the vertical integration and foreign direct investment. If outsourcing and RD are complementary to each other, outsourcing leads to an increase in RD, which leads to a reduction of the negative impact of outsourcing on wages and employment in the outsourced countries. Based on a similar framework, Marjit and Mukherjee (2008) argued that outsourcing has a positive relationship with the RD investment and hence an increase in outsourcing causes an increase in the RD investment in small markets and highly competitive product market, whereas it decreases the RD investment in large markets Based on the efficiency wage models, which talk about the positive effect of higher wages (Shapiro and Stiglitz, 1984; Banerjee and Gupta, 1998), have shown a direct effect on labour productivity of higher wages, as result of greater incentive. Hence, a decline in wage mean declining productivity and the entrepreneurs might be reluctant to reduce the wage, even in the situations of unemployment. That is the key argument explaining unemployment and wage rigidity at the same time. Dibyendu Maiti and Sugata Marjit (2011) had focused on the subcontracting part of a typical firm to the informal sector for a developing economy. Although, these literature give us the basis of contractual labour hiring practices, but they do not mention much about the productivity perspective. Dibyendu Maiti and Sugata Marjit (2011) gave an overview of the productivity and subcontracting issue for a developing economy, this research study will only deal with the Indian automobile sector as its primary domain. Research Design and Methodology Starting with a simple framework of a firm, which has two alternatives to hire labourers, i.e. either using subcontracting way at a lower cost or it can go for permanent employment of labourers. The formal wage structure is determined exogenously at each level whereas the contractual labourersÃ¢â¬â¢ wages are determined endogenously by the market and using the bargaining power of the contractor. Also assuming, is the fact that contractual labour wage rate do not adjust rapidly in the short run. In case of a rise, in the wage rates of the permanent labourers the firm would go for contractual hiring, thereby increasing the demand for temporary labourers in turn leading to an increase in wages. In the short run time period, if the contractual wage rises, the firm would opt for the existing permanent labourers, which again leads to an increase in the demand for permanent labourers. With this relation between the wages of both the contractual and permanent labourers, we can establish th e fact that the contractual wage and permanent wage would be correlated. Although from a long run view, the contractual wage is adjusted by the market forces. The net effect of the above interactions between the contractual and permanent wage determines the level of wage and employment in a particular sector. In order to analyse the study, information from secondary sources of Indian database is collected. With these dataset, and to establish a significant relationship between the wages and productivity regression analysis has to be done. The study takes the annual emoluments for hired workers in Non-Directory Manufacturing Establishments (NDME) documented by National Sample Survey Organisation, Government of India and annual emoluments of the various factory workers documented by Annual Survey of Industries, Government of India, Society of Indian Automobile Manufacturers (SIAM) and Automobile Component ManufacturersÃ¢â¬â¢ Association (ACMA). Running pooled OLS regression with state and time as dummy variables and panel GLS regressions to estimate the relationship between contractual wage and formal productivity, and formal wage and formal productivity controlling other variables. With the results for the regression analysis it can be showed that the correlation between formal wage and formal productivity is not statistically significant, while for the formal productivity and informal wage it is highly significant and with the GLS panel regression, it can be proved that formal productivity is highly affected by informal wage. The formal or the permanent workersÃ¢â¬â¢ sector does not necessarily affect the contractual workersÃ¢â¬â¢ sector in the long term. If the permanent wage increases, the firm will transfer its production activities from its in house permanent sector to external contractual sector which leads to two effects on the contractual wage rate. Firstly, a substitution effect would raise the demand for contract labours. The discharged labours from the formal sector due to shortage of production would also supply more labour. Therefore, the net effect remains ambiguous. If the contract labour sector have a net positive demand for labours, it would increase the employment and it would raise the informal wage when the economy is at its full employment level. Again, if net demand is negative, it might also reduce the contractual wage. This situation alters the efficiency gain of permanent labours and also brings down the condition for the contract sector. Thus a developing economy or an economy with a higher number of poor populations will have less productive permanent sector. This indicates that when a society has a greater number of poor informal workers, those who are fortunate enough to land up with relatively high-wage jobs may not be as productive as they would be in a society where access to the low wage informal segment restricted.
Saturday, January 18, 2020
1. How did the Philippines become a major headache for America? Filipinos erupted into an open insurrection in 1899 under Emilio Aguinaldo. The war/ conflict was sordid and prolonged. Instead of quietly assimilating, they objected. 2. Why did the United States hold on to the Philippines? Millions of American dollars were invested in improving the nationÃ¢â¬â¢s infrastructure and education. Moreover the 2 nations had established important economic ties including trades in sugar. 3. Why did Hay propose the Open Door Policy? What was it? He proposed it because Chinese markets were being monopolized by Europeans. Hays open door policy suggested that in their leaseholds and spheres of influence they would respect certain Chinese rights and the ideal of fair competition. 4. How did the US get Ã¢â¬Å"entangledÃ¢â¬ in China? American public was alarmed by European encroachments into Chinese markets and demanded that Washington should do something. Chinese did not like being used as Ã¢â ¬Å"doormatsÃ¢â¬ by the Europeans and revolted. America joined in on a multinational rescue force to quell the rebellion. 5. Why was Roosevelt Ã¢â¬Å"kicked upstairs?Ã¢â¬ he was elected governor of New York but the local political bosses found him too headstrong and difficult to manage. 6. What were the major issues of the election of 1896? Why did McKinley win? The paramount issue as republican overseas imperialism. Along with republican fostered trusts. 7. What were RooseveltÃ¢â¬â¢s general ideas on foreign and domestic policy? Domestic: mostly consisted of his ideas of the Square Deal on supporting middle class and Progressive ideas, regulating Business Monopolies, and enforcing the Anti-Trust act and hopes of protecting the common people. Also towards farmers, consumers, workers, and business owners have equal treatment and opportunity to succeed. Foreign: consisted mostly of the pressing need for the canal across Central America. Roosevelt also expanded the Monroe Doctrine in order to make new agreements with European Nations. RooseveltÃ¢â¬â¢s Corollary to the Monroe Doctrine stated that if America and its protectorates receive problems and complications with other Nations, then America can handle its own issues and will not need the aid from foreign Countries. 8. Why did many Americans push for a canal in Central America? During the Spanish American war, battleship Oregon had to sail all the way across the southern tip of south America to reach the Cuban coasts. Building the canal would fortify Americas naval mobility. 9. What was the Clayton-Bulwer Treaty? What was the Hay-Pauncefote Treaty? Signed with Britain in 1850, The US could not secure exclusive control over such a route as the Panama Canal. In 1901 with the second treaty, US could build canal and fortify it too. 10. How did the US intervene in Panama to get access to the canal route? US naval forces did not let Columbian troops cross isthmus to quell the uprising. 11. What was the Hay-Banau-Varilla Treaty? Sold canal strip of ten miles for forty million. 12. How did the Panama Canal episode change US relations with Latin America? Made them bad. Fear spread and US became a bully. LOL 13. What was the Roosevelt Corollary to the Monroe Doctrine? What was its impact? Justified US intervention in Latin American Countries. A policy of preventive intervention, it kept out European nations by allowing US forces to take over custom houses and pay off debts. Latin Americans viewed the US with disapproval as we interfered in the DR and Cuba. 14. Why was TR involved in the dispute between Japan and Russia? What was the result of his intervention? Established him as a global statesmen. Japan got no indemnity and only the southern half of Sakhalin. Japanese and American and Russian and American unfriendly relations grew. 15. What was the GentlemenÃ¢â¬â¢s Agreement? Japanese flow of laborers to America by withholding passport happened and Californians were forced to repeal offensive school order. 16. What was the Root-Takahira Treaty? Japan and US will respect territorial possessions and uphold Open Door in China.
Friday, January 10, 2020
Should Smaller Public Companies be Exempted from Complying with SOX Section 404(b)? ABSTACT On July 21, 2010 the Dodd-Frank Wall Street Reform and Consumer Protection Act provided the non-accelerated public companies (those with a market capital below $75 million) a permanent exemption from complying with the Sarbanes-Oxley (SOX) Section 404(b). The Section 404(b) would have required these smaller companies to do what larger companies over the $75 million market cap are currently doing; requiring an external auditor to audit their internal controls over financial reporting.However, what may seem like a huge win for the smaller companies who long have complained about the cost out weighing the benefits of complying with the standard, does not appear that way to everyone. INTRODUCTION Sarbanes-Oxley (SOX) Act SectionÃ¢â¬â¢s 404 (a) and (b) were created to help restore the publicÃ¢â¬â¢s trust in what public companies are reporting in their financial statements, as well as the opinio ns on the reports that the auditors are providing on the financial statements.SOX 404(a) implies that managements of public companies assess and report on whether their internal controls over financial reporting (ICFR) are effective (United States Securities and Exchange Commission [SEC], 2009); in order to ensure that those requirements in Section 404(a) are being met, public companies are required to have an external auditor attest to managementÃ¢â¬â¢s assessment over the ICFR (SEC, 2009). While SOX 404(a) is required by all public companies, Section 404(b) was required only by large companies (those with a market cap greater that $75 million).As for the smaller public companies (those $75 million and under), they were granted numerous extensions and were eventually permanently exempted. The main purpose of SOX 404 was to alleviate the growing tension between investors, government agencies, and public companies. While the public trust is continuing to be restored, according to r esearch and studies; unintended circumstances of the SOX 404 implementation caused massive financial burdens for smaller public companies (Garrett, 2009).The outcries from the small public companies were answered by numerous extensions on the compliance of SOX 404(b). This was in order to give these companies more time to get their internal controls in place for external auditors to attest to them. Finally, on July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was passed. The Dodd-Frank Act provided permanent exemption from complying with the SOX 404(b) for non- accelerated public companies (those with a market capital below $75 million) (Dodd-Frank Wall Street Reform, 2010, pg. 83). As a result of this Act, another issue surfaced as to why permanently exempt the smaller companies from SOX 404(b). All public companies, to include smaller public companies, should be held to the same standards and be subject to the rules under SOX 404(b). Ins tead of permanently exempted them, the SEC should have came up with a way to make it more cost effective to comply. This paper will address arguments from both sides of the Dodd-Frank Act, and why smaller firms should be required to comply with SOX 404(b).ANALYSIS The permanent exemption comes as a relief for the small public companies as complying with SOX 404(a) has been very expensive and time consuming. By adding to the cost associated with complying with SOX 404(b), it would be more than they would be able to handle. A study conducted by Financial Executives International, showed that the cost of complying with SOX for those public companies whose market cap was under $100 million was approximately $824,000 compared to $1. million for those who market cap is between $100 million to $500 million, at the time the article was written (Wolkoff, 2005). Furthermore, Wolkoff (2005) goes on to say that at the AMEX median, the median revenue for its companies are $57 million, which mean s that for these companies to comply with SOX 404(b) it would cost close to 1. 5% of its median revenue(Wolkoff, 2005). Specifically, Wolkoff states that this could Ã¢â¬Å"severelyÃ¢â¬ have a negative impact on these companies operating margins and Ã¢â¬Å"in many cases to near zero Ã¢â¬â and depleting funds available for a reinvestmentÃ¢â¬ (Wolkoff, 2005, pg. ). In addition, resources that could be used for other more important business needs would be diverted to costly Ã¢â¬Å"tedious documentation requirementsÃ¢â¬ , and would not be worth the benefits derived (Garrett 2009, pg. 1). Even after the creation of Auditing Standard No. 5 (AS5), a study done by George Washington University, found that the decrease that larger public companies found with the relief provided from AS5 was not the case for smaller public companies (Garrett, 2009).Furthermore, NASDAQ research showed that based on revenue percentage it would cost 11 times more for smaller companies than larger compan ies to comply with SOX 404 (b), which creates an Ã¢â¬Å"unfair competitive advantage for larger companiesÃ¢â¬ (Garrett, 2009 pg. 1-2). Not to mention that these smaller companies believe that the cost associated with SOX 404(b) far outweighs the benefits of compliance (Wolkoff, 2005).On the other hand, opponentÃ¢â¬â¢s of the Dobb-Frank Act believes that despite the George Washington University and NASDAQ studies, SOX 404 costs are still expected to go down and that the reduction is not only due to the implementation of AS5, but because of other factors. For instance, the cost of complying with SOX 404 is expected to continue to go down as companies continue to implement and document effective controls and move into the Ã¢â¬Å"maintenance phase of monitoring and reportingÃ¢â¬ (How Potential Changes in Small-Company, 2006, pg. 7).As this relates to SOX 404(b), this could also mean that once the external auditors have completed their first audit of the companyÃ¢â¬â¢s internal controls and improvements are made based on the outcome of the audit, audit fees should go down because the audits will become easier since any ineffective internal controls should have been or is being addressed. Another SOX 404(b) obstacle that proponents of the Dobb-Frank Act believed threatened the small companies was that the Securities Exchange Commission (SEC) was trying to take a Ã¢â¬Å"one size fits allÃ¢â¬ approach.Meaning, the SEC was trying to use the same standards for both large and small companies when regulating corporate governance. Proponents felt that this was unfeasible because larger companies were in a better financial position to handle the expense for consultant and external audit fees that came with the SOX 404 regulations. For example, an increased auditing bill to $500 thousand for a company who has a $10 billion market cap would not have the same effect on a company with a market cap of $100 million (Wolkoff, 2005).Conversely, an analysis done by CRA International for the Big Four, reported that audit fees did not make up the majority of the cost associated with SOX 404. Specifically, the smaller of the larger companies that had to comply with all sections of SOX 404 (i. e. , those with market caps between $75 and $700 million); 35% of those costs were related to audit cost (How Potential Changes in Small-Company, 2006) as it relates to SOX 404(b). Additionally, those companies with a market cap over $700 million, only 26% were related to audit cost (How Potential Changes in Small-Company, 2006).Although the compliance with SOX 404(b) was implemented to restore investorÃ¢â¬â¢s confidence, Wolkoff (2005) states that in doing so caused a deterrent in the number of small firms that would go public both domestically and overseas. The Amex has seen the impact as the number of small companies that have delisted from the Exchange has increased (Wolkoff, 2005), and those that would have joined decided not to, which reduces the number of initial public offerings in the United States.The SOX Act, specifically, Sections 404(a) and (b), didnÃ¢â¬â¢t take into account that large companies have a more complex business structure, which makes for more complex accounting practices (Wolkoff, 2005). For example, the segregation of duties obstacles that many smaller companies are faced with and do not have the resources to fix this control problem. According to Wolkoff (2005), the SEC should have taken that into consideration the Ã¢â¬Å"market capÃ¢â¬ or Ã¢â¬Å"minimal revenueÃ¢â¬ that a company generates and apply different standards accordingly (pg. 1).Another point that proponents of the Dobb-Frank Act made was that scandals like Enron are least likely to happen in smaller public companies. The reasoning behind this is that smaller companies are not normally out to cheat themselves. This is because these smaller companies are usually run by the people that founded the companies or closely related (Wolkoff, 2005). However, by requiring smaller public companies to comply with SOX 404(b), will not only ensure that they are in compliance with SOX 404(a), but it will also help these companies by uncovering inefficiencies in some processes.This in turn will help the companies because it will Ã¢â¬Å"Ã¢â¬ ¦makes fraud harder to commit and easier to detectÃ¢â¬ (Aguilar, 2010, pg. 33). Especially since smaller companies are in a better position and at greater risk for committing fraud and accounting manipulations (Aguilar, 2010). Furthermore, who is to say those smaller companiesÃ¢â¬â¢ investors do not deserve the same level of confidence and Ã¢â¬Å"financial reporting safeguardsÃ¢â¬ that larger public companiesÃ¢â¬â¢ investors are receiving (Solnik, 2010).In addition, studies have shown a correlation between Ã¢â¬Å"weak internal controls and poorer earnings relative to effective internal controlsÃ¢â¬ (Hamilton, J. , 2009). In time of a declining economy, the temptations for fraudulent r eporting is increased and by having smaller companies comply with SOX 404(b) serves as a deterrent for those temptations (Hamilton, J. , 2009). Lastly, smaller public companies feel that they have already spent a lot of money just to be in compliance with SOX 404(a), and do not feel the need to be monitored by external auditors.This is because they feel that are capable of monitoring, finding, and remediating deficiencies through internal audits (Solnik, 2010). However, as previously mentioned, SOX 404(b) was not only put in place to ensure that public companies were in compliance with SOX 404(a), but to also have it attested by an independent auditor. This not only helps restore investorÃ¢â¬â¢s confidence, but also provides the public companies beneficial information as to whether or not they have proper controls in place and/or additional controls are needed.Moreover, small companies may be putting themselves at risk especially, if the investors penalized them for not meeting th e Ã¢â¬Å"transparency normsÃ¢â¬ that is projected by external auditors (Silverstein, 2008 pg. 26). Especially since there are approximately 7,300 smaller public companies, which accounts for 65% of the overall public companies (Hamilton, J. 2009). CONCLUSION While there are good cases made from both sides of the Dobb-Frank Act, permanently exempted smaller companies doesnÃ¢â¬â¢t solve the issue of ensuring compliance with SOX 404(a) is being followed.More importantly, it doesnÃ¢â¬â¢t provide the smaller public investors with the same confidences as large public investors as to whether or not the proper controls are in place, and/or whether the controls are effective. By having external auditors attest to ICFR it will provide the smaller companiesÃ¢â¬â¢ investors the same boost of confidences as its larger counterparts. Instead of permanent exemption, other means should be looked at in order to make it to where it is cost effective to comply with SOX 404(b).Also, as recommen ded by the Key Advisory Committee, Ã¢â¬Å"[e]xempt some smaller public companies entirely from SOX 404 reporting requirements, but add stricter corporate governance requirements for those companiesÃ¢â¬ (How Potential Changes in Small-Company, 2006, pg. 6). That way we will not have to wait until another scandal is made public to scramble and make these changes; as the old saying goes, Ã¢â¬Å"ItÃ¢â¬â¢s not if, but whenÃ¢â¬ . REFERENCES Aguilar,Ã M. (2010,Ã May). Small filers struggle with internal controls over fraud. Compliance Week,Ã 7(76),Ã 33,74.Retrieved from ABI/INFORM Trade & Industry. Dodd-Frank Wall Street Reform and Consumer Protection Act. Conference Report to Accompany H. R. 4173. House of Representative , 111th Cong. 583 (2010). Garrett, S. 2009. Garrett introduces SOX exemption for small businesses, Press release, Oct. 8,2009. Hamilton,Ã J. (2009, June). Section 404 works and is important for small companies, Aguilar feels. SEC Filings Insight,1,4. Retr ieved from ABI/INFORM Global. How potential changes in small-company SOX regulations could affect your firm. (2006,Ã February).Accounting Office Management & Administration Report,Ã 06(2),Ã 1,6+. Retrieved from ABI/INFORM Trade & Industry Silverstein, M. (2008,Ã December). (Sarbanes-Oxley Revisited:) The Good, the Bad, the Lessons. New Jersey Business,Ã 54(12),Ã 26. Retrieved from ABI/INFORM Dateline Solnik, C. (2010,Ã July). Small companies push to gain permanent exemption from Sarbanes-Oxley requirement Silverstein nts. Long Island Business News. Retrieved from ABI/INFORM Dateline. United States Securities and Exchange Commission, Office of Economic Analysis. 2009). Study of the Sarbanes-Oxley Act of 2002 Section 404 Internal Control over Financial Reporting Requirements. 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