Minimum Wage: Costs and Benefits

Minimum Wage: Costs and Benefits INTRODUCTION AND DEFINITION OF MINIMUM WAGE The concept of minimum wage has been an age long economic debate that has broadened economists’ horizon into examining both its costs and benefits. The whole concept behind minimum wage basically deals with how the welfare of workers in a country, state or geographical region can best be improved upon. Since the premiere of the industrial revolution which dates back to the early 19th century in England, minimum wage has become an increasingly open and popular debate. However, this definition has faced stiff opposition from activist who clamor for a minimum wage bracket. From a broader perspective, some critics of the minimum wage concept has proposed that instead of increasing the wages that workers receive, the employers should be more concerned about improving their welfare. This has been narrowed down to include their place of abode, their feeding, health insurance and other benefits that are not included as part of employees’ income. The proponents of employees†™ welfare have a strong belief that it would help the workers as it basically deals with economic development and in addition to this, would prevent the occurrence of wage inflation. However, there is a definition of minimum wage which is universally acceptable. According to the Wikipedia encyclopedia, it is simply defined as the least number in hours in terms of payment that an employer may legally pay to employees’. In examining this definition, it simply tells us that it is based on a set of rules guiding employees’ compensation for services rendered. COST OF MINIMUM WAGE: ALGEBRAIC AND GRAPHICAL REPRESENTATION ALGEBRAIC REPRESENTATION The cost of minimum wage can be represented algebraically via the national income model. Hence, the cost is based on a macro-economic analysis given as: GDP= C+I+G+X-M. Where they are stated as follows; GDP= Gross domestic product, C= Consumption, I= Investment, G= Government expenditure, X= Export, M= Import. In analyzing each of the following components, the following are observations based solely on the cost of minimum wage. CONSUMPTION: With regards to the consumption of goods and services, opponents to an increase in minimum wage believes that it would lead to a drastic reduction in the consumption of manufactured goods as well as services as the cost of production is transferred to the consumers. This would lead to an increase in supply and a reduction in demand owing to cost. INVESTMENT: Conservatives are of the opinion that an increase in minimum wage would lead to a slowdown in investment. Employers would be unwilling to expand their business because of the heavy cost that would be paid to labor. This is because an increase in minimum wage would drive up the cost of labor which is very essential to production. Hence businesses would be reluctant to expand thereby leading to a reduction in investment in the long-run. GOVERNMENT EXPENDITURE: Conservatives are of the belief that an increase in minimum wage would drive up government expenditure. To buttress their point, it should be noted that an increase in minimum wage would drive up the cost of production which would lead to job cuts. Job cuts would prompt the government to act quickly by providing social security programs that would discourage people from engaging in social vices and illegal activities. This increases the government expenditure. EXPORTS: An increase in the minimum wage would result in a drastic reduction in exports of the subject nation. This occurs as a result of the fact that when there is an increase in the minimum wage, it leads to an increase in the cost of production and eventually an increase in the prices of goods to be exported. This would eventually lead to a reduction in the units of exported goods. IMPORTS: Increasing the minimum wage would lead to a sharp increase in the importation of goods. The foreign nation would want to make its own good cheaper in the subject nation where the increase has occurred. This may eventually lead to illegal trading activities such as dumping of goods or manufacturing of substandard goods. Hence foreign products would flock the domestic markets killing the domestic industry which would eventually lead to unemployment and a reduction in government revenue. GRAPHICAL REPRESENTATION y axis QSo $11.00QS1 QSo $7.25x axis (Minimum wage) 13.2units 20 units Units of goods produced The graph above represents the effect of an increase in minimum wage on the cost of production. From the above graph, the y axis represents an increase in the minimum wage of workers from $7.25 to $11.00. This led to the following observations. At initial minimum wage of $7.25, the number of units produced was 20units, hence cost of production is $7.25 * 20 = $145.working by assumption At new minimum wage of $11.00, producers are trying to maximize output by reducing input. Hence new cost of production is $11.00 * 13.2 = $145.2 which is equivalent to $145. Hence the old cost of production is equal to the new cost of production (Ceteris paribus) As a result of this action initial quantity supplied by producers (QSo) is reduced from 20units to approximately 13units. This is represented by a left word movement of the arrow from QSo to QS1, which signifies a reduction. In addition to this, the x-axis is also represented by a left word movement of the arrow from initial units produced (20units) to new units produced (13.2units equivalent to 13units) BENEFITS OF MINIMUM WAGE: MATHEMATICALAND GRAPHICAL REPRESENTATION MATHEMATICAL REPRESENTATION For a better representation of the benefits of minimum wage, the most appropriate model to be employed would be the national income model. This model was also used in the cost of minimum wage. It is stated as: GDP = C + I + G + X – M C- CONSUMPTION Proponents of minimum wage increase are of strong opinion that it increases the level of consumption among the citizens. This is based on one of the factors affecting demand which states that quantity demanded increase with respect to an increase in the income of individuals. In other words when the minimum wage is increased people would be able to purchase more goods and services compared to the original amount. I – INVESTMENT Since the proponents of an increase in the minimum wage believes it would eliminate low paying jobs and lead to higher paying jobs, hence as it pertains to investment, an increase in the minimum wage would lead to greater investment in high skilled industries which would be beneficial to gross domestic product. This type of investments would in most cases be long term and is very crucial in moving a country from developing to developed. G- GOVERNMENT EXPENDITURE Increasing the minimum wage would reduce the expenditure from government. This is according to proponents who believe that workers would earn more as a result of the increase and thereby depend less on the government for welfare benefits. This would eventually reduce expenditure on the part of the government and lead to more revenue on the part of the citizens. This would be very helpful to the economy as it would create a balanced budget. X- EXPORT Exports would be of great benefit to an increase minimum wage. The reason for this is that it would be very helpful in producing goods that meet international standards and can yield maximum utility. This would make the domestic country’s goods competitive in the international market thereby leading to a trade surplus in the long run. The basic reason for this is that with an increased minimum wage, employers demand more from employees. Hence their skills and competences are put to test. M- IMPORT As regards import, an increase in the minimum wage would not be helpful to imputed goods. This is based on assumption of the proponents of minimum wage increase. It is strongly believed that because the imported goods are cheap, they would most likely be substandard compared to those goods produced in the home country. Hence consumers would boycott these products and promote their domestic product instead. This would eventually increase the gross domestic product (GDP) In summary, an increase in minimum wage (Ceteris paribus) would be favorable to the economy given the following factors are synergized. GRAPHICAL REPRESENTATION: BENEFITS OF MINIMUM WAGE Y axis QD1 $11.00 QDo QD1 $7.25QDo X axis (Minimum wage) 1kg 3kg Apples in kg The diagram above represents the effect of an increase in minimum wage on consumption. A simplified analysis of the graph is stated thus: In the above diagram, the vertical axis represents minimum wage. It also shows how the minimum wage has increased from its initial amount of $7.25to $11.00 The horizontal axis shows the amount in kg of apples that consumers can purchase given their income. Ceteris paribus, at $7.25 minimum wage, consumers are able to purchase 1kg of apples. When the minimum wage is increased to $11.00, there is a great increase by 2kg bringing the new consumption of apples to 3kg. This signifies that an increase in minimum wage has a positive effect on consumption.

Homebuying 101: An Affordable Challenge Essay -- Journalism Essays

Homebuying 101: An Affordable Challenge For the past four weeks, Natalie Delsoin and 24 other Boston residents have been spending their Tuesday nights learning the ins and outs of affordable housing. Delsoin recently moved to Dorcester after a military stint in Germany, and she hopes to someday own a home. She plans on that day coming sooner rather than later. Delsoin’s biggest concern is her 2 year-old daughter. â€Å"I need a single family home that is safe†¦ and safe for my child,† she said. The class’ instructor, Tanya Townshend, teaches 30 to 60 people in each of her homebuyers classes. Townshend works as an assistant property manager for Maloney Properties, a New England real estate chain that sponsors a number of sessions for homebuyers. Townshend said â€Å"about 10% (of class attendants) seem to be ready to buy† after her four week seminar. The rest attend more classes or work on improving their credit rating before bidding on a home. Boston is one of the tightest housing markets in the country. Many first-time homebuyers are looking for any advantage they can get in finding their first home. For many homebuyers, affordable housing is the only realistic option. However, affordable housing is limited and there are a number of obstacles for families seeking to go that route. To help with the process, the city of Boston and a handful of community development groups sponsor first-time homeowner courses and support programs for people interested in affordable housing. According to a August 2000 U.S. Department of Housing and Urban Development (HUD) low income housing study, â€Å"the overall vacancy rate for rental units in the Boston was 4.1% in 1998 compared to 6.7% for the Northeast region and 7.9% for the country.† The h... ... at the assessment shows this duplex has no remodeling work done, the exterior and interior structures are poor, and the interior finish is graded as substandard. For a two-family home, it offers a decent accommodation – each residence has three bedrooms and one and a half bathrooms, as well as over 1,700 feet of living space. Significant depreciation in property value indicates the place is extremely run down. For prospective first-time homeowners, a tight housing market and constantly changing neighborhoods make finding the right home a difficult choice. The market is full of wrong choices. Potential buyers like Natalie Delsoin and James Creed hold out hope when their lottery number is picked, there are still affordable housing options waiting for them. Creed says that regardless of when that time comes, the classes â€Å"make you go in with your eyes more wide open.†

colonization Essay -- essays papers

colonization From the beginning of American colonization we were a mainly farming people. The basis of our society was built upon agriculture, and little else. The rise to corporate capitalism has had such a profound impact on American society, it is impossible to study any aspect of United States history post Civil War without a direct relation, on any level, to the industrial revolution. America would not be the superpower it is today had we not made the change from an agricultural society to an industrial one long ago. The rise of corporate capitalism radically changed the way Americans lived forever. In the years previous to those following the Civil War, the American lifestyle was pretty much the same. People lived on the farm, and everybody contributed to the families well being. After the Civil War, the technological change in America was so great, it forced people to reconstruct the way the lived their lives. New inventions and technology bombarded every aspect of the American life. â€Å"Whereas only 276 inventions had been recorded during the Patent Office’s first decade in the 1790s, during the single year of the Columbian Exposition [1893] 22,000 patents were issued† (Martin 420). The government’s role in the rise of corporate capitalism varies depending upon whom you asked the question to. Some said the government held to the laissez-fair policy, while some said that they favored the big business and disregarded the common worker as a non-issue. â€Å"Government’s proper role was to leave the economy alone, so as not to disrupt the operation of the natural forces that ordered the economy† (Martin 426). In a actuality, both are probably right. â€Å"To a large extent the industrialists got what they wanted- a laissez-fair policy that left them alone, except when they needed help† (Martin 426). The government set out no regulatory rules to the large corporations until the Interstate Commerce Commission in 1887. In 1886 the Supreme Court passed a ruling that allowed the 14th amendment to include a corporation as a â€Å"person.† States could then not deny equal protection without due process of law, and the courts were now in charge of setting the limit of â€Å"reasonable† profits by corporations (Martin 428). This once again left the common laborer to be subject to the ruling of their superiors in the business world. Industrialism was growing so rapidly,... ...nvironment. While the 8-hour workday and end of child labor was a long way off, this strike helped to hasten the coming of these events. The rise of corporate capitalism had such a profound positive impact on our nation as a whole, its nearly immeasurable. Without it, America would not have become the world superpower that it is today. The shift from and agricultural society into an industrial one may have been difficult for those in the immediate wake of it, however, it was a new situation to everybody. Such great technological advances had never been seen before in America or anywhere else at any time. I believe it would be impossible for a nation to go through such tremendous changes without some misuse of power, and burden on the lower classes of people. After time, things were smoothed out and ran in an acceptable manner to everybody. The big bosses were still making their money, and the lower working class people were granted the 8 hour workday, as well as having conditions improved in the workplace. Overall, I believe this to be the most important time in US history. It has developed us as a nation, and set us apart as independents strong enough to provide for ourselves. colonization Essay -- essays papers colonization From the beginning of American colonization we were a mainly farming people. The basis of our society was built upon agriculture, and little else. The rise to corporate capitalism has had such a profound impact on American society, it is impossible to study any aspect of United States history post Civil War without a direct relation, on any level, to the industrial revolution. America would not be the superpower it is today had we not made the change from an agricultural society to an industrial one long ago. The rise of corporate capitalism radically changed the way Americans lived forever. In the years previous to those following the Civil War, the American lifestyle was pretty much the same. People lived on the farm, and everybody contributed to the families well being. After the Civil War, the technological change in America was so great, it forced people to reconstruct the way the lived their lives. New inventions and technology bombarded every aspect of the American life. â€Å"Whereas only 276 inventions had been recorded during the Patent Office’s first decade in the 1790s, during the single year of the Columbian Exposition [1893] 22,000 patents were issued† (Martin 420). The government’s role in the rise of corporate capitalism varies depending upon whom you asked the question to. Some said the government held to the laissez-fair policy, while some said that they favored the big business and disregarded the common worker as a non-issue. â€Å"Government’s proper role was to leave the economy alone, so as not to disrupt the operation of the natural forces that ordered the economy† (Martin 426). In a actuality, both are probably right. â€Å"To a large extent the industrialists got what they wanted- a laissez-fair policy that left them alone, except when they needed help† (Martin 426). The government set out no regulatory rules to the large corporations until the Interstate Commerce Commission in 1887. In 1886 the Supreme Court passed a ruling that allowed the 14th amendment to include a corporation as a â€Å"person.† States could then not deny equal protection without due process of law, and the courts were now in charge of setting the limit of â€Å"reasonable† profits by corporations (Martin 428). This once again left the common laborer to be subject to the ruling of their superiors in the business world. Industrialism was growing so rapidly,... ...nvironment. While the 8-hour workday and end of child labor was a long way off, this strike helped to hasten the coming of these events. The rise of corporate capitalism had such a profound positive impact on our nation as a whole, its nearly immeasurable. Without it, America would not have become the world superpower that it is today. The shift from and agricultural society into an industrial one may have been difficult for those in the immediate wake of it, however, it was a new situation to everybody. Such great technological advances had never been seen before in America or anywhere else at any time. I believe it would be impossible for a nation to go through such tremendous changes without some misuse of power, and burden on the lower classes of people. After time, things were smoothed out and ran in an acceptable manner to everybody. The big bosses were still making their money, and the lower working class people were granted the 8 hour workday, as well as having conditions improved in the workplace. Overall, I believe this to be the most important time in US history. It has developed us as a nation, and set us apart as independents strong enough to provide for ourselves.

Governmental Family Policy Essay -- Women Feminist Papers

Governmental Family Policy The modern working woman is struggling to balance work and family. The Second Wave of feminism has pushed her into the workforce, promising its ideals of equality in wages and in the home. However, many women find themselves in a world that devalues their work in home and in the workplace. Our society has not yet caught up to the Third Wave of feminism, which attempts to break down the traditional gender roles our constructions of work and family are based on. Many are hoping that government intervention through work policies that reflect the demands of an egalitarian family will be able to propel men and women out of the "stalled revolution". One must now address the question why the United States government is not following the lead of other industrialized nations if they are so supportive of "family values" and "moral values." Until there is a public outcry that can no longer be ignored, which is fast-approaching, the government can continue playing with words in order to avoid accountability. The problem exists with how these policies are categorized. The common term applied to such policies is "social benefits." This language alludes to the "social welfare state"-an ideal a liberal democracy like America does not strive to uphold. The American attitude for such concerns is usually along the lines of "you have your rights, now work it out for yourself." However, it is crucial to break down the relation between these family-friendly policies and the word "benefits." Progressive policies do not predominantly "benefit" working mothers. Without such policies, women cannot pursue their right to earn a living in the same way a man could. Earning a living is not a "benefit," equal opportunity fo... ...ing Job For Kids." 21 Jan. 2003 http://lexis-nexis.com Coltrane, Scott. Family Man. New York: Oxford UP. (1996). Contemporary Women's Issues. March 2003. Vol. 52, No.2. http://lexis-nexis.com De Pasquale, Lisa. "The PC Workplace." The Washington Times. 27 April 2003. http://lexis-nexis.com English, Holly. "Workplace Issues; When employers deal with 'gender issues,' they need to include men." Legal Times. 10 Nov. 2003. http://lexis-nexis.com Fuss, Diana.. "Inside/Out." Critical Encounters: Reference and Responsibility in Deconstructive Writing. New Brunswick: Rutgers University Press, 1995. 233-240. Hochschild, Arlie. The Second Shift. New York: Rutledge Publishing, Inc. (1995). Gerson, Kathleen and Jacobs, Jerry A. Changing the Structure and Culture of Work. Journal of Women's History. September 2003. Vol. 15, No.3. http://lexis-nexis.com

Chapter 1 Modern Auditing

CHAPTER 1 AUDITING AND THE PUBLIC ACCOUNTING PROFESSION – INTEGRITY OF FINANCIAL REPORTING |LEARNING CHECK | 1. SEVERAL COMMON ATTRIBUTES OF ACTIVITIES DEFINED AS AUDITING ARE (A) SYSTEMATIC PROCESS, (B) OBJECTIVELY OBTAINING AND EVALUATING EVIDENCE, (C) ASSERTIONS ABOUT ECONOMIC ACTIONS AND EVENTS, (D) DEGREE OF CORRESPONDENCE, (E) ESTABLISHED CRITERIA, (F) COMMUNICATING THE RESULTS, AND (G) INTERESTED USERS. 2.A financial statement audit involves obtaining and evaluating evidence about an entity's financial statements for the purpose of expressing an opinion on whether the statements are presented fairly in conformity with established criteria–usually GAAP. Thus, the nature of the auditor's report is an opinion on the fairness of the financial statement presentation. A compliance audit involves obtaining and evaluating evidence to determine whether certain financial or operating activities of an entity conform to specified conditions, rules, or regulations.A report on a compliance audit takes the form of a summary of findings or assurance regarding degree of compliance. An operational audit involves obtaining and evaluating evidence about the efficiency and effectiveness of an entity's operating activities in relation to specified objectives. Reports on such audits include an assessment of efficiency and effectiveness and recommendations for improvements. 3. Independent auditors are individual practitioners or members of public accounting firms who render professional auditing services to clients. These services may involve financial statement audits, compliance audits, and operational audits.Internal auditors are employees of the companies they audit. They are involved in an independent appraisal activity, called internal auditing, as a service to the organization. Internal auditors are primarily concerned with compliance and operational audits. Government auditors are employed by various local, state, and federal governmental agencies. They ma y be involved in all three types of audits. 4. a. The financial statement audit is a form of an examination engagement in which the auditor provides reasonable assurance that the financials statements are free of material misstatement.The CPA might also perform an engagement to examine a forecast or a projection in which the auditor provides reasonable assurance that the forecast or projection reflects the underlying assumptions and that there is support reasonable for the underlying assumptions. A CPA might also perform an engagement to examine an assertion regarding compliance with laws or regulations in which the auditor provides reasonable assurance that the entity complied with laws or regulations. b.A review of financial statements is an engagement in which the CPA provides negative assurance that he or she is not aware of any material modifications that need to be made to the financial statements in order for them to be in conformity with GAAP. 5. Accounting and compilation s ervices provide financial statement users and decisions makers with relevant information. However, they are not designed to test the reliability of such information. The primary benefit received is information that may be relevant to a decision, even though evidence is not obtained about the reliability of such information. . The following table summarizes several assurance services provided by CPAs and explains the how they improve the relevance or reliability of information used by decision makers. |Assurance Service |How the service improves the relevance or reliability of information used by decision makers | |CPA Risk Advisory |Provides relevant information to management or the board of directors about business risks faced| | |by an entity.It ma also provide information about the reliability of management’s system for | | |identifying and monitoring business risks. | |CPA Performance View |Provides relevant financial and nonfinancial information to management or the boar d of directors| | |about the entity’s performance. It ma also provide information about the reliability of | | |management’s system for monitoring the entity’s performance. | 7. a.The audit provides reasonable assurance that financial statement information is free of material misstatements. Decision makers can uses financial information to anticipate business opportunities and to make business decisions based with reasonable assurance that the information set used to make decisions is reliable. b. A review of financial statements provides less assurance about the reliability of financial information than that provided by an audit. The CPA provides negative assurance that he or she is not aware of any material modifications that need to be made to the financial statements in order for them to be in conformity with GAAP.This service is focused on both the relevance and reliability of information used by decision makers. A compilation does not provide assurance abo ut the reliability of financial statement information used by decision makers. However, a compilation service may provide decision makers with relevant information that they would not otherwise have. c. The CPA risk advisory service may transform complex information into knowledge by helping management better understand business risks. The CPA risk advisory service may also provide assurance about the reliability of information produced by management’s system of evaluating business risks. . The origin of the company audit as we know it can be linked to British legislation during the industrial revolution in the mid-1800s. One or more stockholders designated by other stockholders initially performed company audits, but subsequent revisions in the legislation permitted the use of outside independent auditors, giving rise to the formation of auditing firms. The focus of these early audits was on finding errors in the balance sheet accounts and stemming the growth of fraud associ ated with the increasing phenomenon of professional managers and absentee owners.Several important milestones in the rise of the U. S. profession were (1) the passage of legislation (2) the stock market crash of 1929 which drew attention to deficiencies in financial reporting and produced a challenge to the accounting profession to provide stronger leadership, (3) adoption of a requirement by the New York Stock Exchange in 1933 that all listed corporations obtain an audit certificate from an independent CPA, and (4) passage of the Securities Act of 1933 and the Securities Exchange Act of 1934 which added to the demand for audit services for publicly owned companies.Three important changes in audit practice that evolved by the 1040s were (1) a shift from detailed verification of accounts to sampling or testing as the basis for rendering an opinion on the fairness of financial statements, (2) development of the practice of linking the testing to be done to the auditor's evaluation of a company's internal controls, and (3) deemphasis of the detection of fraud as an audit objective.In recent years, the profession has come under increasing pressure to reverse the deemphasis on detecting fraud as the public's expectation that the auditor will detect fraud persists. The quality of audits was questioned when a series of restatements of earnings from public companies such as Sunbeam, Waste Management, Xerox, Adelphia, Enron and WorldCom brought about a crisis of confidence in the work of auditors.By 2002 the collapse of Enron and WorldCom led Congress to pass the Sarbanes-Oxley Act of 2002. This act created the Public Companies Accounting Oversight Board (PCAOB) and gave it responsibility for setting auditing, ethics, independence, and quality control standards for audits of public companies. 9. Four factors that contribute to the need for independent audits are (a) conflict of interest, (b) consequence, (c) complexity, and (d) remoteness. Collectively these factors co ntribute to information risk. 0. Financial statement audits enable companies to (a) meet statutory and other regulatory requirements that must be satisfied in order to gain access to capital markets, (b) obtain debt and equity financing at a lower cost of capital, (c) deter inefficiency and errors in the accounting function and reduce the risk of fraud in the accounting and financial reporting process, and (d) make internal control and operational improvements based on suggestions made by the auditor as a by-product of the audit. 1. The limitations of a financial statement audit include the fact that an auditor works within fairly restrictive economic limits that impose time and cost constraints and necessitate the use of selective testing or sampling of the accounting records and supporting data. Also, the auditor's report must usually be issued within three months of the balance sheet date, which affects the amount of evidence that can be obtained.The availability of alternative a ccounting principles permitted under GAAP, and the impact of accounting estimates and uncertainties on the financial statements represent additional inherent limitations on financial statement audits. 12. Six public sector organizations include (1) the Securities and Exchange Commission, (2) state boards of accountancy, (3) the U. S. General Accounting Office, (4) the Internal Revenue Service, (5) state and federal courts, and the U.S. Congress. Five private sector organizations associated with the public accounting profession include (1) the Public Companies Accounting Oversight Board, (2) the American Institute of Certified Public Accountants, (2) State Societies of Certified Public Accountants, (4) Practice Units (CPA firms), and (5) Accounting Standard Setting Bodies — principally the Financial Accounting Standards Board (FASB) and Governmental Accounting Standards Board (GASB). 3. The Securities and Exchange Commission regulates the distribution of securities offered for public sale and subsequent trading of securities on stock exchanges and over-the-counter markets. The SEC also has the authority to establish GAAP for companies under its jurisdiction, and it currently recognizes the pronouncements of the FASB as constituting GAAP in the filing of financial statements with the agency.In some instances, however, the SEC’s disclosure requirements exceed GAAP. Finally, the SEC also exerts considerable influence over auditing profession. The Sarbanes-Oxley Act of 2002 established a private sector, Public Companies Accounting Oversight Board to oversee the audit of public companies that are subject to securities laws. The PCAOB’s rulemaking process results in proposals that do not take effect until the SEC approves them. 14. a.The PCAOB has authority in five major areas (1) registering public accounting firms that audit the financial statements of public companies, (2) setting quality control standards for peer review of auditors of public companies and conducting inspections of registered public accounting firms, (3) setting auditing standards for audits of public companies, (4) setting independence and ethics rules for auditors of public companies, (4) performing other duties or functions to promote high professional standards for public company audits, and enforce compliance with the Sarbanes-Oxley Act of 2002. . Three important AICPA divisions, or teams, that have a direct impact on auditors are (1) the AICPA Practice Monitoring Program is responsible for quality control standards and peer reviews of firms that provide assurance services to private companies, (2) the Auditing and Attest Standards Team sets auditing and attest standards for audit, accounting, and review services provided to private companies, and (3) the Professional Ethics Division is responsible for setting and enforcing the AICPA Code of Professional Conduct. 15. a.A CPA firm may be organized as a proprietorship, partnership, Professional Corpo ration, or any other form of organization permitted by state law or regulation (including limited liability partnerships (LLPs) and limited liability corporations (LLCs)). b. CPA firms are often classified into the following four groups: (1) Big Four, (2) Second Tier, (3) Regional, and (4) Local. 16. a. The purpose of the profession's multilevel regulatory framework is to help assure quality in the performance of audits and other professional services. b. The four components of the profession's multilevel regulatory framework are: Standard-setting. The private sector establishes standards for accounting, auditing, ethics, and quality control to govern the conduct of CPAs and CPA firms. †¢ Firm regulation. Each CPA firm adopts policies and procedures to assure that practicing accountants adhere to professional standards. †¢ Self-or peer regulation. The AICPA has implemented a comprehensive program of self-regulation including mandatory continuing professional education, pee r review, audit failure inquiries, and public oversight. Government regulation. Only qualified professionals are licensed to practice, and auditor conduct is monitored and regulated by state boards of accountancy, the SEC, and the courts. 17. The five elements of quality control are (1) independence, integrity and objectivity, (2) personnel management, (3) acceptance and continuance of engagements, (4) engagement performance, and (5) monitoring. 18. a. The key elements of the PCAOB inspection program includes: †¢ Inspecting and reviewing selected audit and review engagements of the firm. Evaluating the sufficiency of the firm’s quality control systems and the firm’s documentation and communication of that system. †¢ Performing such other testing of the audit, supervisory, and quality control procedures of the firm as are necessary or appropriate in light of the purpose of the inspection and the responsibilities of the board. The PCAOB conducts annual inspecti ons of firms that regularly provide audit reports for over 100 public companies.The PCAOB inspects the quality control activities of firms that provide audit reports for 100 or fewer public companies every three years. b. The purpose of the AICPA practice monitoring (peer review) program is to: †¢ Determine that a firm’s system of quality control for its accounting and auditing practice has been designed in accordance with quality control standards established by the AICPA. †¢ Determine that a firm’s quality control policies and procedures were being complied with to provide the firm with reasonable assurance of conforming with professional standards. Determine that a firm has demonstrated the knowledge, skills, and abilities necessary to perform accounting, auditing, and attestation engagements in accordance with professional standards, in all material respects. |Comprehensive Questions | 1. 19 (Estimated time – 20 minutes) a. Internal auditing is an independent appraisal activity performed by employees of the company being audited. The objective of internal auditing is to assist management in the effective discharge of its responsibilities.External auditing is done by independent, external auditors for the purpose of expressing an opinion on the fairness of the company's financial statements. Governmental auditing is done by government auditors to determine (1) fairness of financial reports, (2) compliance with applicable laws and regulations, (3) efficiency and economy of operations, and (4) effectiveness in achieving program results. b. The Public Companies Accounting Oversight Board and the American Institute of Certified Public Accountants, the Institute of Internal Auditors, and the U.S. General Accounting Office establish practice standards for independent, internal, and government auditors, respectively. c. The audits serve different purposes and are made by different types of auditors. Auditing only by internal auditing will not satisfy the requirements of stock exchanges and the SEC for independent audits by external auditors. Moreover, internal audits will not satisfy all government requirements for audits, particularly in the area of compliance with applicable laws and regulations.In sum, each type of auditing is necessary. 1. 20 (Estimated time – 30 minutes) |a. Type of Audit |b. Type of Auditor(s) |c. Primary Recipient(s) | |1. Financial statement (1) |Independent(1) |Stockholders, investors, regulatory agencies, and| | | |general public | |2.Operational (3) |Internal (2), Independent(1) |Senior Management | |3. Compliance (2) |Government – IRS (4) |IRS | |4. Operational (3) |Government – GAO (3) |Congress | |5. Financial statement (1) |Independent (1) |Creditors | |6.Operational (3) |Internal (2) |Management | |7. Compliance (2) |Government – GAO (3) |Congress | |8. Compliance (2) |Independent (1), Internal (2), |Congress | | |and Government – GAO (3) | | |9.Financial Statement (1) |Independent (1) |Citizens, taxpayers | |10. Operational (3) |Government – GAO (3) |Congress | |11. Compliance (2) |Independent (1), Internal (2) |Bondholders | |12. Compliance (2) |Internal (2), Independents (1) |Management | 21. Estimated time – 15 minutes) a. The first step in the accountant’s value chain involves capturing data about business events, such as data about sales and the collection of receivables. The second step involves developing an information set that communicates the total picture with integrity and objectivity. The relevant information set here might include information about sales, receivables and the calculation of inventory turn days. Transforming complex information into knowledge involves understanding how the client’s receivable collection period (58 days) compares with the rest of the industry.In this case the 75% of the industry collect their receivables faster than the client. Anticipating an d creating the opportunity involves recognizing that the client will improve its cash flow if it brings its collection days more in line with the industry median. This may further involve a study of specific customers that are delinquent and considering how to take steps to speed collection. The final stage involves management’s implementation of tighter credit policies, improved discounts for paying quickly, or charging interest for being delinquent. b.A financial statement audit is important as it provides reasonable assurance that the sales and receivables information that is being used to make business decisions is free of material misstatement. If the information supporting the calculation of accounts receivable turn days is materially understated, the company may not recognize that it needs to take steps to improve cash flows, and in turn, make poor business decisions. 22. (Estimated time – 20 minutes) a. The benefits of a high quality audit include the following : †¢ Access to Capital Markets.An audit allows companies’ access to public securities markets. In many cases, companies also need audits to support a lender’s loan decisions. †¢ Lower Cost of Capital. An audit often allows companies to obtain capital at a lower cost of capital, because of the reduced information risk associated with audited financial statements. †¢ Deterrent to Inefficiency and Fraud. Research has demonstrated that when employees know that an independent audit is to be made, they take care to make fewer errors in performing accounting functions and are less likely to misappropriate company assets.The fact that financial statement assertions are to be verified reduces the likelihood that management will engage in fraudulent financial reporting. †¢ Control and Operational Improvements. Based on observations made during a financial statement audit, the independent auditor often makes suggestions to improve internal control, to evaluate management’s assessments of business risks, to recommend improved performance measures, and to make recommendations to achieve greater operational efficiencies within the client’s organization.Your fellow business student is correct that these benefits are not achieved when an audit is not performed in accordance with professional standards. b. Even an audit performed in accordance with professional standard may not detect every material misstatement in financial statements. The following inherent limitations explain why an audit can only provide reasonable assurance that financial statements are free of material misstatement, not a guarantee that the financial statements are accurate. †¢ Reasonable Cost. Audits must be performed at a reasonable cost.Auditors use selective testing, or sampling, of the accounting records and supporting data. In addition, the auditor may choose to test internal controls and may obtain assurance from a well-functioning system of int ernal controls. Audits cannot audit every transaction. †¢ Reasonable Length of Time. The auditor’s report on many public companies is usually issued three to five weeks after the balance sheet date. This time constraint may affect the amount of evidence that can be obtained concerning events and transactions after the balance sheet date that may have an effect on the financial statements.Moreover, there is a relatively short time period available for resolving uncertainties existing at the statement date. †¢ Alternative Accounting Principles. Alternative accounting principles are permitted under GAAP. Financial statement users must be knowledgeable about a company’s accounting choices and their effect on financial statements. For example, there may be a material difference between the value of inventory using LIFO or FIFO. †¢ Accounting Estimates. Estimates are an inherent part of the accounting process, and no one, including auditors, can foresee the ou tcome of uncertainties.Estimates range from the allowance for doubtful accounts and an inventory obsolescence reserve to impairment tests for fixed assets and goodwill. An audit cannot add exactness and certainty to financial statements when these factors do not exist. 1. 23(Estimated time – 15 minutes) |1. |State boards of accountancy |10. |State societies of CPAs | |2. |FASB and GASB |11. |SEC, state and federal courts | |3. |AICPA |12. GASB | |4. |SEC |13. |AICPA | |5. |AICPA, state societies of CPAs, |14. |State boards of accountancy | | |and state boards of accountancy | | | |6. |FASB |15. |AICPA | |7. |State boards of accountancy |16. Practice units | |8. |SEC |17. |GAO | |9. |AICPA |18. |IRS | 1. 24(Estimated time – 20 minutes) a. The four sets of standards in the private sector and the standard setting bodies are: (1) accounting by the FASB and GASB, (2) auditing by the AICPA, (3) professional ethics by the AICPA, and (4) quality control by the PCAOB and th e AICPA. The other components of the regulatory framework are: (1) firm regulation that occurs within the public accounting firm through day-to-day monitoring of the actions of the firm's professional staff by the firm's management; (2) inspections and peer reviews that relates to the activities of professional entities outside the firm such as the PCAOB and the AICPA's Practice Monitoring (Peer Review) program; and (3) governmental regulation that occurs at both the state and federal levels through activities that range from positive enforcement programs to punitive actions.This type of regulation is done by state boards of accountancy, the SEC, and state and federal courts of law. 1. 25(Estimated time – 30 minutes) | | |Purpose of Policy / Procedure |Additional | |Policy/ |Element |(b) |Procedure | |Procedure |(a) | |(c) | |1. Personnel Management |Personnel should have the qualifications to |Establish qualifications necessary for | | | |fulfill responsibilities they may be called upon |each level of responsibility in the firm. | | | |to assume in the future. | | |2. |Engagement Performance |Work at all levels should be supervised to ssure |Establish procedures for reviewing working| | | |that it meets the firm's standards of quality. |papers and reports. | |3. |Personnel Management |Work is assigned to people who have the technical |Identify areas and specialized situations | | | |training for the assignment and personnel should |for which consultation is required. | | |seek assistance, when necessary, from persons | | | | |having appropriate expertise, judgment, and | | | | |authority | | |4. Independence, Integrity and|All professionals should be independent of |Monitor compliance with independence | | |Objectivity |clients. |rules. | |5. |Monitoring |Determine that procedures relating to the other |Provide for reporting inspection results | | | |elements are being effectively applied. |to appropriate management levels in the | | | | |firm. | |6. Personnel Management |Only individuals who possess the qualities of |Maintain a recruiting program to obtain | | | |integrity, competency, and motivation should be |new hires at the entry level. | | | |hired. | | |7. |Personnel Management |Personnel should have the knowledge required to |Provide Programs to develop expertise in | | | |fulfill assigned responsibilities. specialized areas and industries. | |8. |Engagement Performance |Personnel should have the technical training and |Permit partner in charge of engagement to | | | |proficiency required by the engagement. |approve assignments. | |9. |Acceptance and Continuance |The firm should not be associated with clients |Establish review procedures for continuing| | |of Clients and Engagements. |whose management lacks integrity. |a client. | 1. 6(Estimated time – 30 minutes) a. The PCAOB’s inspection program and the AICPA’s practice monitoring (peer review) program do not have a direct impact on individual memb ers. They are focused on a firm’s quality control activities. However, these programs may have an indirect effect on members who are involved in audits that are subject to inspection or peer review and all individuals in a firm may receive certain types of continuing professional education based on the findings of these programs. . The PCAOB is responsible for the inspection of audit firms that audit public companies. The AICPA’s practice monitoring (peer review) program is focuses on audit firms that audit private companies. The objectives of both programs focus on a firm’s adherence to quality control practices. c. The following table compares the objectives of the PCAOB’s inspection program and the AICPA’s practice monitoring (peer review) program. They both focus on a firm’s adherence to quality control practices. PCAOB’s inspection program |AICPA’s practice monitoring (peer review) program | |In conducting inspections, the Sarbanes-Oxley Act of 2002 states |The purpose of a peer review is to determine whether: | |that the PCAOB should: |The reviewed firm’s system of quality control for its accounting | |Inspect and review selected audit and review engagements of the |and auditing practice has been designed in accordance with quality | |firm. control standards established by the AICPA. | |Evaluate the sufficiency of the firm’s quality control systems and |The reviewed firm’s quality control policies and procedures were | |the firm’s documentation and communication of that system. |being complied with to provide the firm with reasonable assurance | |Perform such other testing of the audit, supervisory, and quality |of conforming to professional standards. |control procedures of the firm as are necessary or appropriate in |The reviewed firm has demonstrated the knowledge, skills, and | |light of the purpose of the inspection and the responsibilities of |abilities necessary t o perform accounting, auditing, and | |the board. |attestation engagements in accordance with professional standards, | | |in all material respects. | d. The primary activities of the AICPA practice monitoring program include providing peer reviews and issuing reports on a firm’s compliance with quality control standards. Professional Simulation | (Estimated time – 30 to 45 minutes) | |Research | | | | | | |Situation | |Communication | A student can perform the search of quality control standards in two ways. First, the student can do a key words search on â€Å"monitoring procedures. † Second, if a student looks at the way the Quality Control Standards are organized, he or she will note that QC Section 30 addresses Monitoring a CPA Firm’s Accounting and Auditing Practice.The relevant paragraphs are outline below. 1. Explain the monitoring procedures that should be performed by the firm. QC Section QC 30. 03 -. 08 2. Explain the factors that should be co nsidered by small firms with a limited number of management individuals. QC Section QC 30. 10 -. 11 | | |Communication | | | | | |Situation |Research | | To: Tom Meyers and Kenny Vaughn Re: Monitoring ProceduresFrom:CPA Candidate Based on a review of relevant quality control standards (QC 30. 03-. 09) the firm’s monitoring procedures should include the following: 1) Inspection procedures evaluate the adequacy of the firm's quality control policies and procedures, its personnel's understanding of those policies and procedures, and the extent of the firm's compliance with its quality control policies and procedures. These might include: a) Review of selected administrative and personnel records pertaining to the quality control elements. ) Review of engagement working papers, reports, and clients' financial statements. c) Discussions with the firm's personnel. d) Summarization of the findings from the inspection procedures, at least annually, and consideration of the systemic c auses of findings that indicate improvements are needed. e) Determination of any corrective actions to be taken or improvements to be made with respect to the specific engagements reviewed or the firm's quality control policies and procedures. f) Communication of the identified findings to appropriate firm management personnel. ) Consideration of inspection findings by appropriate firm management personnel who should also determine that any actions necessary, including necessary modifications to the quality control system, are taken on a timely basis. 2) Preissuance or postissuance review of selected engagements. 3) Analysis and assessment of a) New professional pronouncements. b) Results of independence confirmations. c) Continuing professional education and other professional development activities undertaken by firm personnel. ) Decisions related to acceptance and continuance of client relationships and engagements. e) Interviews of firm personnel. 4) Determination of any correct ive actions to be taken and improvements to be made in the quality control system. 5) Communication to appropriate firm personnel of any weaknesses identified in the quality control system or in the level of understanding or compliance therewith. 6) Follow-up by appropriate firm personnel to ensure that any necessary modifications are made to the quality control policies and procedures on a timely basis.

Organic food Essay

We have all heard the phrase â€Å"What you don’t know won’t hurt you† and it has undoubtedly applied to many situations in our lives that we are still unaware of. We like to toss around this phrase without worrying too much about what it implies because that is the whole point of the phrase, not to worry. When it comes to what we are putting into our bodies, though, what we do not know can indeed hurt us immensely. In the United States, we have grown accustomed to not thinking much about what we are consuming. The main factors we look for in food are taste and price. We live in a consumer society where money rules our nation, it rules our lives, and it rules us. Money has become the main focus for every decision we make, but when it comes to something as important as our health, should we look at a few other factors? With societies concerns focusing on wealth and profit, there is no surprise that the food industry finds the cheapest ways to produce the most food. Consequently, this produces many negative effects on aspects of our lives such as our health and the environment. When choosing what foods to consume, we should begin to pay more attention to factors other than the price tag. The food industry obviously plays a big role in this epidemic of processed food, but they are not the only ones to blame. Yes they are the ones taking advantage of our ignorance by mass-producing cheap food that they know we will not think twice about, but the ignorance is our fault. Author of The Omnivore’s Dilemma, Michael Pollan, describes the current foundation of the food industry, â€Å"Our food system depends on consumers’ not knowing much about it beyond the price disclosed by the checkout scanner. Cheapness and ignorance are mutually reinforcing† (Pollan 245). Pollan is correct in his assumption that most Americans do not know much about their food besides how much it cost. Most of them are not even aware that they do not know what is in their food. They subconsciously assume that chicken is chicken and cheese is cheese, but unfortunately that is hardly ever the case. Many people choose to live along these guidelines of â€Å"ignorance is bliss† by not paying attention to the horror stories of the food industry; they turn their heads from documentaries on animal treatment and plug their ears at the mention of the real ingredients of their precious snacks. As long as the food they are eating tastes good and did not cost a lot of money, they are content with not knowing how unhealthy it might be. Pollan further explains another reason people buy the cheapest available food: It makes good economic sense that people with limited money to spend on food would spend it on the cheapest calories they can find, especially when the cheapest calories—fats and sugars—are precisely the ones offering the biggest neurobiological rewards. (Pollan 108) People with lower incomes are confined to buying cheap food, typically the most processed and unhealthy food, because with their limited funds they cannot afford to care about the quality of what they are eating. They buy what is cheapest because that is all they can get. As long as they have food in their stomachs, they do not complain or worry too much about the side affects. Eating food that may not be very healthy definitely outweighs the alternative of eating nothing and starving. Americans are ignorant of the food that they purchase either because they choose not to educate themselves or because they really have no choice. Either way, they are missing out on other possibilities of obtaining food that have many advantages. Not knowing what our food is made of also prevents us from knowing what alternative food options are available to us. Because we see no problems with our current food choices, we see no reason to discover new ones. The processed food at the supermarket is all we know because it is the most convenient and affordable from of nourishment we can obtain. Pollan’s book includes the testimony of someone who buys food from a local, organic farmer, â€Å"†¦for me it’s all about the taste, which is just so different—this is a chickinier chicken. Art’s chickens just taste cleaner, like the chicken I remember when I was a kid† (Pollan 252). The food available from local farmers is not only better for our health and the environment but it also tastes better. We have grown accustomed to the artificially flavored food we buy from grocery stores and do not realize that the food we eat could taste better and more natural. The locally grown food tastes healthier and more natural because that is precisely what it is. The artificially engineered taste of chicken in a common chicken nugget is not what a chicken should taste like. Besides enhanced taste, buying from local farmers offers many other benefits as well. An organic farmer interviewed in The Omnivore’s Dilemma explains some more benefits of buying locally, With our food all of the costs are figured into the price. Society is not bearing the cost of water pollution, of antibiotic resistance, of food-borne illnesses, of crop subsidies, of subsidized oil and water—of all the hidden costs to the environment and the taxpayer that make cheap food seem cheap. (Pollan 243) One of the main reasons why people do not want to look into these alternative methods of eating is because they are more expensive. People overlook these opportunities because the organic food appears overpriced, but when you evaluate all these factors it might not be as overpriced as you might think. Yes the food is more expensive but it stands true that you get what you pay for. When paying more, you are receiving a whole lot more that benefits your health, community, and environment. The extra money that would be spent on food, you might save on your medical bills and taxes. Locally produced food is healthier for you and it carries a much less chance of containing disease and illness. Another bonus of buying from local farms: there is less pollution created than in the factories and slaughterhouses of the globalized food industry. If people became aware of alternative food options and the benefits associated with them, they would be more inclined to pay better attention to what they are buying. This would not only improve ones personal health, but also the environment. Although money remains a very important role in deciding what we purchase, it would benefit us to consider a few other aspects of the food that we buy. Paying attention to details such as what goes into the food, where it is produced, and how it is produced would lead us to make healthier decisions. More often than not, a satisfying answer to these questions will not be found in the food at our local supermarkets, but rather a local farmer. Buying from these farmers would mean supporting a healthy environment and body. Their production methods are healthier and much more environmentally friendly than any factories in a big-name food industry. While it may seem that this is a simple choice, many Americans will continue to ignore these truths. When it comes down to it, money rules everything and it will take a lot more than the promise of better health for people to overlook a price tag. They say ignorance is bliss, but when that ignorance leads to decisions that contaminate our bodies and our environment, the bliss will be short lived.

Samsung Electronic

Executive Summary There are many ways specifically in innovation that Samsung is doing well. There is no doubt that they are one of the leaders in their industry. With so many products and product lines there many facets that Samsung is involved in maybe too many. There may need to be more focused. There is a large market that Samsung has but there is still more of the target group that can be reached. Green products have become more important to consumers however the approach to green technology Samsung is taking needs to be directed a different way.Samsung Distribution ChannelThe slowing of buying behavior in the U. S. and recession has made the need for entertainment important to everyone but included in this is the need to be financially savvy. This mindset is a gap that can be filled through marketing properly to the consumers sharing this mindset by purchasing Samsung electronics and staying home to save money essay writer in uk. Introduction Samsung has made many changes throu ghout the years to increase their market share and grow to be one of the top companies in electronics. There has been a growing focus on innovation and design.Samsung has done this by studying target markets in depth. They do this by study groups, creating innovative design labs and sending designers around the world to study museums and architecture. With the target market’s needs and expectations changing more focuses on green technology and the spending habits of consumers has changed. Samsung started with designing and creating simple electronics and now are in a variety of products outside of computers and televisions. This is a problem Samsung is facing is too many focuses instead of how they started in specializing in a few specific products.Samsung has done well in creating design centers across the world that can help study a specific localized target market but when you are designing for so many different target markets whose needs change based on region it can be v ery expensive. There are some generic products that can be made and sold worldwide but you are looking at a high expense for the company. Situation Analysis With the focus of Samsung products having the perfect feel and function, they are doing a great job of studying the needs and wants of the consumer.The innovation awards that have been won throughout the years show their focus and employees is spot on to where they need to be and with sales every year increasing, the current plan they is successful. The company is already aware of some problems and most are specific to products they are creating. Solar panels they are struggling with over supply and price erosion. Electronic batteries where there is such a small demand. Medical devices and biotech drugs face the same issue of having a large chance of competitors to enter the market. All of these things are associated with green technology.There problems are being created and could be avoided by focusing on making their current p roducts more â€Å"green† instead of creating new products. Reducing their carbon footprint is one way they can look at still being involved in the growing green industry. The recession has affected all businesses especially in the United States. The consumers buying entertainment items have decreased but this fact can also be an opportunity to Samsung. There is a way to focus on the costs of going out versus buying a nice 3D television or HD television and staying at home.With so many companies producing similar products the competition that Samsung faces can put a decline in market share within certain product categories. Samsung has the resources and ability to do what they want globally in every product category. The company seems to be willing to make changes and take risks despite the potential payoff or loss. With a large amount of revenue this will allow Samsung to test multiple options without it hurting their productivity and money flow. AlternativesOne alternative Samsung could do is limiting the locations of design centers. Currently the locations span the globe and for the president to be involved in every location would require traveling basically the entire time. To keep a more focused eye on productivity and keep the CEO connected and less reliant on managers and supervisors to relay information. Focus on making current product â€Å"green† from packaging to ways of transportation to export their products across the world. Some of the current products are not selling well and there is an oversupply.By taking focus away from those products this will help save money or use the current money being put in these investments to better use. Recommendations I would recommend Samsung doing a full financial and cost analysis on each product line and see what the top selling products are and make a list of all the products and their ranks in selling. I would suggest doing this annually so they are able to compare from year to year. With this information Samsung will be able to eliminate products that are wasting money and continue to improve and invest in innovation for the products that are selling well.Even taking away some the products that don’t sell well and focusing on the top sellers will help make Samsung be known for making specialized products. Instead of focusing on new green products limit the amount of new green innovation for now and focus on making the current products more â€Å"green†. In addition to narrowing focus on successful products there should be more meeting held to compare the target market research that happens at the many design centers across the world to verify similarities and differences within markets. This will help keep communication open and ideas flowing.If there is a need to continue the green technology product line there needs to be a slowing of production and very detailed account of what is selling from season to geographic location. If there is demand that start s to build then an increase of production would be suggested. In the United States, Samsung is the number one television brand. Although the country is in a recession there is still a large market and amount of money being spent on entertainment. Samsung should start a marketing campaign to show the value in making a large purchase such as a television and watching movies at home.There is no doubt that it is expensive to go to the movies. It is a reasonable idea that buying an HD television or even a 3D television can provide just as good if not better experience then going to the movies. Most of the older generations like to keep very standard electronics and do not need or desire electronics with all the bells and whistles that a younger generation would want. There is an opening to market to the baby boomer generation. These older generations have money and if their old televisions go out or they are want to keep in touch with family they will be looking for something that is sim ple and satisfies their needs.Making a simpler design that could be geared to the older generation is a market within the electronics industry that should be looked at. In addition there is a brand loyalty that is there with this older generation. Brand loyalty when it comes to electronics is becoming rarer with many consumers going with products that number one meet their cost requirement. There are so many competitors that offer similar products. Getting the consumer to keep buying your brand will continue to be a main goal for every company.