The History of Auditing :: GCSE Business Marketing Coursework

The History of Auditing Abstract The evolution of auditing is a complicated history that has always been changing through historical events. Auditing always changed to meet the needs of the business environment of that day. Auditing has been around since the beginning of human civilization, focusing mainly, at first, on finding efraud. As the United States grew, the business world grew, and auditing began to play more important roles. In the late 1800’s and early 1900’s, people began to invest money into large corporations. The Stock Market crash of 1929 and various scandals made auditors realize that their roles in society were very important. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. The auditors’ job became more difficult as the accounting principles changed, and became easier with the use of internal controls. These controls introduced the need for testing; not an in-depth detailed audit. Auditing jobs would have to change to meet the changing business world. The invention of computers impacted the auditors’ world by making their job at times easier and at times making their job more difficult. Finally, the auditors’ job of certifying and testing companies’ financial statements is the backbone of the business world. Introduction Auditing has been the backbone of the complicated business world and has always changed with the times. As the business world grew strong, auditors’ roles grew more important. The auditors’ job became more difficult as the accounting principles changed. It also became easier with the use of internal controls, which introduced the need for testing, not a complete audit. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. Computers played an important role of changing the way audits were performed and also brought along some difficulties. A Brief History of Early Auditing Auditing has existed since the beginning of human society. Auditing was used mostly for the detection of fraud and was done through extensive detailed examination from ancient times until the late nineteenth century (Lee, 1988). Fraud was a great concern during the early history of auditing, because internal controls were not used or not used effectively until the twentieth century. The late nineteenth century was a turning point in auditing history, when laws like the English Companies Act of 1862 were enacted.

Adolescent Suicide Essay -- Death Depression Papers

Adolescent Suicide Joseph Connelly Gazzola used to be a Northeastern University football star. He has since taken his own life, and it has hit everyone he knew very hard. As reported in the Boston Globe, â€Å"Mr. Gazzola, known as Joe, was born and raised in North Attleborough, showing a love of football and a tolerance of all types of people. ‘He didn't care much about differences,’ said his father. ‘He could relate to anyone. He was the kind of kid who could walk with princes and paupers and never see a difference.’† Gazzola is not alone. There have been a numerous suicides on college campuses as well as among teens in the same age bracke. It is a real proble and it is time to take note. On October 7, 1999, a student at Ramapo College killed himself reportedly due to a break up with his girlfriend, similar to what allegedly caused the fourth NYU student, Diana Chein, 19, to commit suicide by jumping from the top of her boyfriend’s apartment building after a break up on March 10, 2004. The cycle of depression and self destruction is apparent in all cases. There have been many instances of suicide that have occurred in the past years at universities across the country, and since it is such a sensitive subject, there have not been nearly enough coverage as this topic deserves, considering this issue does not seem to be going away. When collecting data about suicide statistics, the age range is broken down as people ages 15-24, which spans most developmental years. Within this bracket are college-age students and this age-group has by far the most troubling statistics around it. In a study released by Brown University, their psychology department shed some light on common myths and facts surrounded suicide. These m... ...s there is a higher awareness level,† said Hayes. â€Å"There are still far too many suicides but now they are much better prepared.† When Gazzola died at NU, the counseling center team dealt with Gazzola’s teammates, roommates, and friends who were left bewildered at this misfortune. Also, with Northeastern’s less than perfect record this academic year, the unfortunate deaths of James Grabowski during the Super Bowl riots (although he wasn’t an NU student, his brother is), and Walter Dedrick found dead in his apartment, (still unexplainable) for example are just a few disasters that demonstrate just how real the problems are and that something needs to be done. It is time for everyone to step up and pay attention to the people around you. Some may not even realize they have a problem, but you can end up making all the difference to a friend in need if you are aware. Adolescent Suicide Essay -- Death Depression Papers Adolescent Suicide Joseph Connelly Gazzola used to be a Northeastern University football star. He has since taken his own life, and it has hit everyone he knew very hard. As reported in the Boston Globe, â€Å"Mr. Gazzola, known as Joe, was born and raised in North Attleborough, showing a love of football and a tolerance of all types of people. ‘He didn't care much about differences,’ said his father. ‘He could relate to anyone. He was the kind of kid who could walk with princes and paupers and never see a difference.’† Gazzola is not alone. There have been a numerous suicides on college campuses as well as among teens in the same age bracke. It is a real proble and it is time to take note. On October 7, 1999, a student at Ramapo College killed himself reportedly due to a break up with his girlfriend, similar to what allegedly caused the fourth NYU student, Diana Chein, 19, to commit suicide by jumping from the top of her boyfriend’s apartment building after a break up on March 10, 2004. The cycle of depression and self destruction is apparent in all cases. There have been many instances of suicide that have occurred in the past years at universities across the country, and since it is such a sensitive subject, there have not been nearly enough coverage as this topic deserves, considering this issue does not seem to be going away. When collecting data about suicide statistics, the age range is broken down as people ages 15-24, which spans most developmental years. Within this bracket are college-age students and this age-group has by far the most troubling statistics around it. In a study released by Brown University, their psychology department shed some light on common myths and facts surrounded suicide. These m... ...s there is a higher awareness level,† said Hayes. â€Å"There are still far too many suicides but now they are much better prepared.† When Gazzola died at NU, the counseling center team dealt with Gazzola’s teammates, roommates, and friends who were left bewildered at this misfortune. Also, with Northeastern’s less than perfect record this academic year, the unfortunate deaths of James Grabowski during the Super Bowl riots (although he wasn’t an NU student, his brother is), and Walter Dedrick found dead in his apartment, (still unexplainable) for example are just a few disasters that demonstrate just how real the problems are and that something needs to be done. It is time for everyone to step up and pay attention to the people around you. Some may not even realize they have a problem, but you can end up making all the difference to a friend in need if you are aware.

The Life and Accomplishment of Madam Curie: Her Contribution to Science

Marie â€Å"Madame† Sklodowska, also known as Madam Curie, was a French chemist, born November 7, 1987 in Poland. Her early years were know to be sorrowful, losing her mother and a sister, Marie was an early pioneer in the field of radiology, as well as winning two Nobel prizes and founding the Curie Institutes in Paris and Warsaw, she was noted for her diligent work ethic, she turned down food and sleep in order to study. (www. spaceandmotion. com/physics-marie-curie-biography. htm) As a child Marie learned to read at four years old, people were amazed with her memory at such a young age. Her father, was a scientist who kept his instruments in a glass case, these instruments intrigued young Marie. Marie, at an early age wanted to become a scientist, but her dream would be difficult to accomplish due to her family being poor. At the age of eighteen, in order for her surviving sister study in Paris, Marie became a governess to help with the financials. In return for helping her elder sister, Bronya financially, Bronya agreed to repay Marie by contributing to the cost of her studies after obtaining her own degree. (inventors. about. om/library/inventors/blMarieCurie. htm) At the age of twenty-four, and with the urging of her sister, Marie moved to Paris to study chemistry and physics at the Sorbonne. With her impressive work in physics Marie managed to win a scholarship, also because of her work she was paid by the Society of Encouragement of National Industry to investigate the magnetic properties of different steels. It was this that led Marie Sklodowska to Pierre Curi e, for her work with metals she needed a lab and Pierre agreed to let Marie use his lab for her work. Pierre had made important discoveries on magnetism and crystals, and with the encouragement of Marie he wrote up his findings and got a Running Head: Life and Accomplishments of Madam Curie doctorate degree which promoted him to a professor. (http://www. spaceandmotion. com/physics-marie-curie-biography. htm) In July of 1895 Marie and Pierre married, Marie completed her research on the magnetic properties of steels two years later. In September of 1897 shortly before giving birth to her daughter Marie submitted her final results on her study. It was after the birth of her daughter Irene; Marie began looking for research that would earn her a doctorate degree, something no other women in the world had completed. It was then that Pierre and Marie together studied radioactive materials, mostly uranium ore pitchblende. This ore strangely was more radioactive than uranium that was extracted from it; by 1898 the two had deduced a logical explanation. This explanation was that the pitchblende contained traces of some unknown component that was radioactive. It was on December 26th 1898 that Marie announced the existence of the new substance; she stated â€Å"I then made the hypothesis that the ores uranium and thorium contain in small quantity a substance much more strongly radioactive than either uranium or thorium. This substance could not be one of the known elements because these had already been examined: it must therefore, be a new element. † (Marie Curie, from Pierre Curie pp. 96-98) (www. spaceandmotion. com/physics-marie-curie-biography. tm) Several years passed and Marie and Pierre never stopped their labor, they refined several tons of pitchblende, concentrating the radioactive components, initially isolating the chloride salts and two new elements. They named one of the new elements after Poland, Marie’s native land and the other was named uranium after its radioactivity. With their breakthrough discovery, other scientists did not believe them due to the amount of polonium and radium was so little that it could not see seen or weighed, only their radioactivity made them known. It was then the Running Head: Life and Accomplishments of Madam Curie Curie’s knew they had t separate their elements from their substances they were mixed with, For this they had to continue there work in an abandoned shed near the school. (www. spaceandmotion. com/physics-marie-curie-biography. htm) Soon after their move to the shed Industrial Industries helped the Curies by providing additional lab space, raw materials and support staff, thus grew a thriving industry. Radium was used by other scientists for experiments on atoms. This confirmed what Marie had suspected, that the powerful energy showed in radioactivity was a fundamental property of every atom. In 1903 Marie, Pierre Curie and Henri Becquerel were all awarded the Nobel Prize in physics, â€Å"in recognition of the extraordinary services they have rendered by their joint researches on the radiation phenomena discovered by Professor Henri Becquerel† (www. spaceandmotion. com/physics-marie-curie-biography. htm) After working in the lab one morning in 1906 Pierre Curie was walking to a library when he slipped and fell into the path of an oncoming heavy horse-drawn wagon. The wagon ran over his head, instantly killing him. After his death Marie was offered his position as professor, no woman before had help such position, and she accepted. In Pierre’s memory Marie decided to establish a scientific institution worthy of such honor, it was with the help of her staff that they persuaded the French government to and privet Pasture Foundation to fund Radium Institute. (www. spaceandmotion. com/physics-marie-curie-biography. htm) In 1911 Marie was awarded her second Nobel prize in Chemistry. †in recognition of her services to the advancement of chemistry by the discovery of the elements radium m and polonium by the isolation of radiation and the study of the nature and compounds of the Running Head: Life and Accomplishments of Madam Curie emarkable element† Not only was Marie the first female professor of Sorbonne she was also the first woman to receive two Nobel prizes. Some scientists disagreed with Marie winning the prize again, stating that the discovery of the elements were part of the first prize in 1903. Thus saying she had won two prizes for the same discovery, and it was more out of sympathy than anything. This was ignored; most chemists considered that the discovery and isolation of radium was the greatest event in chemistry since the discovery of oxygen. (nobelprize. rg/nobel_prizes/physics/articles/curie/) During the first a World War, most of Marie’s staff had enlisted, so scientific research was forced to halt, so Marie looked for ways she could help with science. She then publishes new uses for mobile radiography units; they would be used for the treatment of wounded soldiers. These mobile units were powered using tubes of radium emanation. This colorless radioactive gas would later be identified as radon. Marie personally milked the radium and filled the tubes. (www. spaceandmotion. com/physics-marie-curie-biography. htm) Marie trained women in simple x-ray technology, and was a driver for one of the vans that located metal splinters. And sometimes found herself giving lessons to doctors in geometry. After the war most of her time was spent raising money for the Radium Institute. (nobelprize. org/nobel_prizes/physics/articles/curie/) Marie Curie died July 4th 1934 from aplastic pernicious anemia, which is a disorder in which the bone marrow greatly decreases or stops production of blood cells. It’s believed it is almost certainly due to her massive exposure to radiation throughout her work. Her daughter. Running Head: Life and Accomplishments of Madam Curie Irene won a Nobel Prize in Chemistry in 1935, a year after her mother’s death. Marie’s younger daughter, Eve wrote her biography after her death. (www. spaceandmotion. com/physics-marie-curie-biography. htm) Marie â€Å"Madame† Curie was essential to the discovery of radium and polonium. If it was not for her and her husband Pierre Curie, radiology would not be what it is today. Without her studies who knows how long it would have taken for another scientist to discover the two elements. It is thanks to Marie Curie that we are as far advanced in radiology that we are. References nobelprize.org/nobel_prizes/physics/articles/curie/ www.spaceandmotion.com/physics-marie-curie-biography.htm inventors.about.com/library/inventors/blMarieCurie.htm

Impact of Stock Split on Stock Return

Proceedings of ASBBS Volume 16 Number 1 THE IMPACT OF STOCK SPLIT ANNOUNCEMENTS ON STOCK PRICE: A TEST OF MARKET EFFICIENCY Garcia de Andoain, Carlos Longwood University carlos. [email  protected] longwood. edu Bacon, Frank W. Longwood University 2O1 High Street Farmville, VA 23909 [email  protected] edu Phone: 434-395-2131 Fax: 434-395-2203 ABSTRACT The purpose of this study is to test whether the investor can make an above normal return by relying on public information impounded in a stock split announcement. Using risk adjusted event study methodology, this study tests â€Å"how† and â€Å"when† public announcements of forward and reverse stock splits affect stock price. Stock split announcement samples include 38 two for one, 39 three for two, and 10 reverse splits. A total of 36,714 observations for the announcement samples and the corresponding S&P 500 stock index were analyzed using standard risk adjusted event study methodology. Results suggest that the firms’ public stock split announcements did not affect stock price on the announcement day. Rather, for the two for one and three for two forward split samples, stock price exhibited a significant positive reaction up to 27 days prior to the announcement. For the reverse split sample, stock price exhibited a significant negative reaction up to 30 days prior to the announcement. Results support the semi- strong form efficient market hypothesis since stock prices adjust so fast to public information that no investor can earn an above normal return by trading on the announcement day. Investors greet forward stock split announcement with a positive sign, whereas they view reverse splits as bad news. Management may be using stock splits to adjust stock price to a more marketable range, downward with forward and upward for reverse splits. Evidence here suggests signs of insider trading activity up to twenty-seven days prior to the announcement of the stock split. INTRODUCTION Stock split announcements have always been very common phenomena among firms and continue to be one of the least understood topics in finance. A stock split announcement increases the number of shares of a company while decreasing the price per share. The two for one split is most common, for example a company with 500 shares at $10 per share will issue 500 additional shares bringing the total to 1000 shares theoretically dropping the stock price to $5 per share. A stock split usually takes place after an increase in the price of the stock, and it carries a positive stock price reaction. (Asquith) This phenomenon has not yet been fully understood, regardless the numerous studies in the field. ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS Volume 16 Number 1 BACKGROUND Barker (1956) presented one of the most popular theories to explain stock split behavior. Barker findings failed to consider the split action itself. Barker’s study concluded that price changes occurred because of the increase in cash dividends and not from the split action. (Johnson). According to the â€Å"signaling hypothesis†, managers use stock split announcements to convey positive information about the firm (Ikenberry, Rankine, Strice). Investors see a stock split announcement as a positive thing, whereas a reverse split does not convey favorable information. Fama (1969) suggests that the stock market is â€Å"efficient†, meaning that stock prices adjust very fast to new information. The theory of market efficiency is concerned with whether prices reflect all the public available information or not (Fama 1970). Efficiency implies that it is impossible for the investor to earn an above normal return from public information. PURPOSE The purpose of this event study is to test market efficiency theory by analyzing the impact of three samples of stock split announcements on the firm’s stock price. Stock split announcement samples include 38 two for one, 39 three for two, and 10 reverse splits. Specifically, how fast does the market price of the firms’ stock react to the samples of regular and reverse stock split announcements examined? The study tests whether the investor can make an above normal return by relying on public information imbedded in a stock split announcement, as well as if stock price is affected by a stock split announcement. This study investigates if acting on public information is enough to have an unusual return, or if there must be an illegal action such as inside trading to be able to â€Å"outperform† the stock market. Which form efficiency is the market? Research shows that the market is semi-strong form efficient. An above normal return can only be gained from inside information, and not when acting in public information. LITERATURE REVIEW Fama defined market efficiency in terms of how quick the stock market reacts to the information and suggested three kinds of market efficiency: Weak form, semi-strong and strong form efficiency. If market is weak for efficient, then stock price reacts so fast to all past information that no investor can earn an above normal return (higher than the market or the return on the S&P 500 index). This study shows how investors will not earn a high return from acting on public information (stock split announcement), while investors having access to inside information will make an abnormal return. A second kind of market efficiency is semi-strong. It states that stock price reacts so fast to all public information that no investor can earn an above normal return (higher than the market or the return on the S&P 500 index) by acting on this type of information. (Fama 1970). Splits usually result in high market valuations, but study done by Fama (1970), Dodd, Patell and Wolfson, found that there is no evidence of abnormal return after the release of public information. They concluded that the market assimilates and takes into consideration public information very fast, within 5 to 15 minutes after the disclosure (Malkiel). This supports the idea that an investor acting on public information will not earn an above normal return. When this happens the market is said to be semi-strong form efficient. If the market is strong form efficient, then stock price reacts so fast to all information (both public and private), that no investor can earn an above normal return (higher than the market or the return on the S&P 500 index) by acting on this kind of information. Studies made by Friend, Brown concluded that profit can only be gained by having access to private or inside information, which is illegal. Fama ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS Volume 16 Number 1 presents evidence supporting that efficiency is not met in the strong form and that the semi-strong form is more accurate. This study agrees that stock split announcement are affected in a company stock price according to the semi strong form efficiency which states that stock prices reacts so fast to all public information that no investor can earn an above normal return after the announcement is made. An example would be information concerning a merger. If an investor would buy shares on the announcement day of the merger, the semi strong market efficiency believes that the investor would never be able to earn an above normal return, because adjustments had already been done in the stock price. The market has already been adjusted, so therefore the only way to outperform the market in this case would be by using inside information. METHODOLOGY: This study includes samples of companies that announced a two for one, three for two or reverse stock split announcement. These companies trade their stock in either the NYSE or NASDAQ. The Data for this study was collected from http://finance. yahoo. com/. The announcement date (Day 0) is the day that the stock splits are announced. Every stock return from the companies and from the S&P 500 index was also collected. The Event Study proceeds as following: 1. Historical prices for both the firms and the S&P 500 were collected from day -180 to day +30, being the event period -30 to +30 and Day 0 the announcement day. 2. Holding Period Return was calculated for all the companies as well as for the S&P 500 on the event period days (-180 to +30). HPR was obtained from the following formula: Current Daily Return = (current day close price – previous day close price) / prev. Day close price 3. A regression analysis was performed, being the current firm return the dependent variable and the S&P return the independent variable. The data that was used was the one belonging to the pre-event period (from day -181 to -30). The alpha and the beta were obtained from the regressions. 4. The expected return for each firm as well as for the S&P 500 was calculated: Expected Return = (Alpha + Beta) x S&P actual return 5. Excess Return was obtained from the difference between Actual and Expected Return. Excess Return = Actual Return – Expected Return 6. Average Excess Return (for the Event period) was calculated as: Average Excess Return (AER) = Total Excess Return / n (number of firms in the sample) 7. Cumulative Average Excess Return for the event period (Day -30 to Day +30) was calculated by adding the AER for each day in the event period. 8. A correlation test was done with AER and CAER. The graphs represent AER and CAER plotted against Time. ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS Volume 16 Number 1 Table 1 describes 38 companies that split their stock on a two for one basis between December 1, 2006 and May 14, 2007, along with their respective alphas and betas. TABLE 1: TICKER AFAM ACLI COMPANY NAME Almost Family Inc. American Commercial Lines Inc Selective Insurance Group Inc. ZOLL Medical Corp Trimble Navigation Ltd. Albemarle Corp Guess? Inc. Cooper Industries Ltd Jacobs Engineering Group, Inc GameStop Corp Sealed Air Corp. Carlisle Companies Inc CarMax Inc. Harsco Corp. Amphenol Corp Cabot Oil & Gas Corp Nike Inc Cummins Inc Greif Inc DATE ANNOUNCED Dec 11 Feb 06 TRADED INDEX NASDAQ NASDAQ ALPHA 0. 01665915 -0. 000394377 BETA 0. 08530878 2. 602491516 SIGI ZOLL TRMB ALB GES CBE JEC GME SEE CSL KMX HSC APH COG NKE CMI GEF Jan 30 Jan 25 Jan 25 Feb 07 Feb 14 Feb 14 Jan 26 Feb 12 Feb 16 Feb 08 Feb 22 Jan 23 Jan 17 Feb 26 Feb 15 Mar 08 Feb 26 NASDAQ NASDAQ NASDAQ NYSE NYSE NYSE NYSE NYSE NYSE NYSE NYSE NYSE NYSE NYSE NYSE NYSE NYSE -0. 000319706 0. 004077614 -0. 000187534 0. 0022 37728 0. 001589658 0. 000761731 0. 001074342 0. 000477979 0. 00085897 -0. 001167829 0. 003087277 -0. 001056001 0. 000467862 0. 000826123 0. 001079523 -0. 000720045 0. 02203648 1. 38328513 1. 207411999 1. 321541131 1. 327988752 2. 246784079 1. 308635864 1. 946533548 1. 721660362 1. 172042857 1. 346601558 1. 240366727 1. 658082593 1. 86971211 1. 568927816 0. 553921446 1. 980439113 1. 880200397 ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS VLGEA AZZ ATR TSO GEO TSBK VSEC MRO GIL NRG CROX AGN PMFG MIDD SJR PVA GILD PBR STR Village Super Market Inc AZZ incorporated AptarGroup Inc Tesoro Corporation Geo Group Inc Timberland Bancorp Inc. VSE Corp Marathon Oil Corp. Gildan Activewear NRG Energy Inc. Crocs, Inc Allergan Inc PMFG Inc Middleby Corp Shaw Comm CL Penn Virginia CP Gilead Sciences Petroleo Brasileiro Questar CP Mar 21 Apr 09 Apr 18 May 01 May 01 Apr 25 May 01 Apr 25 May 03 May 02 May 03 May 02 May 04 May 04 May 10 May 08 May 08 May 11 May 14 NASDAQ NYSE NYSE NYSE NYSE NASDAQ NASDAQ NYSE NYSE NYSE NASDAQ NYSE NASDAQ NASDAQ NYSE NYSE NASDAQ NYSE NYSE Volume 16 Number 1 0. 00054113 0. 002118906 0. 00174286 0. 00160687 0. 002825174 0. 000615586 0. 001278324 0. 000144992 0. 003089016 0. 00241574 0. 00282982 -0. 000453038 0. 002024817 0. 02028334 0. 001186211 -0. 00050926 . 000009116 -0. 00064373 -. 000142796 1. 351096108 0. 681656728 0. 033542167 0. 973844695 1. 578867077 0. 107464578 2. 457597999 0. 986395517 0. 000111517 0. 316285515 1. 783171812 0. 952984111 0. 039990601 1. 964415725 0. 938731083 1. 1695925 1. 517629839 1. 817825121 . 706466451 Table 2 describes 39 companies that split their stock on a three for two bases between August 23, 2006 and May 15, 2007, along w ith their respective alphas and betas. TABLE 2: ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS TICKER NGA EPIQ BAM WMS VIVO IEX ATLS VSEA BWS WCN RSG JCTCF MDCI PFBC CMCSA SWS BKE VOL SSI FMD CRVL GBCI AFG SPAR COMPANY NAME North AM Gav Epiq Systems Inc Brookfield Asset MGT V M S Industries Inc Meridian Bioscience IDEX Cop Atlas America Inc Varian Semicond Brown shoe corp Waste connections Republic SVCS Jewett Cameron Inc Medical Action IND Preferred Bank LA Comcast Cp A SWS Group Inc Buckle Inc Volt Info Science Inc Stage Stores Inc First Marblehead Corp Corvel CP Glacier Bancorp American Financial Group Spartan Motors Inc DATE ANNOUNCED May 15 May 10 May 02 May 07 April 19 April 04 April 27 April 24 March 08 Feb 12 Feb 01 March 13 Jan 09 Jan 25 Feb 01 Nov 30 Dec 12 Dec 20 Jan 09 Nov 10 Nov 13 Nov 29 Nov 15 Nov 02 TRADED INDEX NASDAQ NASDAQ NYSE NYSE NASDAQ NYSE NASDAQ NASDAQ NYSE NYSE NYSE NASDAQ NASDAQ NASDAQ NASDAQ NYSE NYSE NYSE NYSE NYSE NASDAQ NASDAQ NYSE NASDAQ Volume 16 Number 1 ALPHA -0. 001032797 0. 001183339 0. 000859066 0. 002219704 0. 0011736 22 0. 000243421 0. 000488161 0. 001788461 0. 000592124 -0. 000187979 -0. 000441765 0. 000124622 0. 001559912 0. 000301413 0. 001381697 0. 000530857 -. 000641295 0. 001338437 0. 000540995 0. 004563185 0. 003763906 0. 000329484 0. 000736169 0. 003450361 BETA 1. 997738247 1. 038735222 1. 251257403 1. 094503791 1. 550013068 1. 509306631 0. 38871871 2. 207840195 2. 599167684 0. 92152423 0. 761431985 -0. 512126102 1. 004029551 0. 867741293 0. 927831638 2. 477624454 1. 602298009 2. 358292804 1. 756904894 0. 830932855 2. 113368174 1. 743070573 0. 936337426 0. 519840545 ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS SBIB AEO CTBK IRM PERY EAT AME WGNB ACAP UBSH EML MCBI CASS CCFH Sterlin Bancshares American Eagle Outfitters Inc Trico Bankshares Iron Mountain Inc Perry Ellis International Brinker International Inc Ametek Inc WGNB Corp American Physicians Cap Union Bankshares Corp Eastern Co Metrocorp Bancshares Cass Information Systems CCF Holding Co Oct 31 Nov 14 Nov 08 Dec 07 Nov 21 Nov 02 Oct 25 Sep 18 Sep 26 Sep 07 Sep 28 Aug 04 Jul 24 Aug 23 NASDAQ NYSE NASDAQ NYSE NASDAQ NYSE NYSE NASDAQ NASDAQ NASDAQ AMEX NASDAQ NASDAQ NASDAQ Volume 16 Number 1 0. 001127642 0. 003616084 0. 001058586 -0. 0000284 0. 002794647 -0. 000020642 0. 00005895 0. 00024115 0. 000317657 -0. 00058103 0. 000419721 0. 000941528 0. 003356848 0. 002118726 1. 165421403 1. 593723526 1. 432917191 0. 627633001 0. 919648907 0. 886164833 1. 31003146 -0. 00226624 0. 066171033 1. 663620313 0. 22686963 0. 121493122 0. 113211419 -0. 08732041 Table 3 describes 10 samples of companies that split their stock on a reverse basis between August 27, 2003 and September 15, 2008, along with their respective alphas and betas. TABLE 3: TICKER OPWV ERIC IWOV SIG COMPANY NAME Openwage Systems LM Ericcson Telephone Co Interwoven Inc Signet Jewelers LTD DATE ANNOUNCED Oct 09 Oct 18 Aug 27 Sept 11 TRADED INDEX NASDAQ NASDAQ NASDAQ NYSE ALPHA 0. 00680888 -0. 006696905 0. 001398048 -0. 000938713 BETA 2. 51286756 1. 949328188 1. 469236928 0. 891488791 ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS BFLY REV CNXT IACI TMTA ERIC Bluefly Inc Revlon Inc Conexant Systems Inc. IAC/ InterActiveCorp Transmeta Corporation LM Ericcson Telephone Co April 3 Sep 15 June 2 June 09 Aug 15 April 09 NASDAQ NYSE NASDAQ NASDAQ NASDAQ NASDAQ Volume 16 Number 1 -0. 00449535 0. 000925943 -0. 004900502 -0. 001442165 -0. 002052045 -0. 004006643 0. 070525685 0. 902722337 1. 73193906 0. 982384488 1. 265168622 -0. 16807384 To test for semi-strong market efficiency the following null and alternative hypotheses are used for the three stock split samples: H10: The risk adjusted return of the stock price of the sample of firms announcing stock splits is not significantly affected by this type of information on the announcement date. H11: The risk adjusted return of the stock price of the sample of firms announcing stock splits is significantly positively affected by this type of information on the announcement date. H20: The risk adjusted return of the stock price of the sample of firms announcing stock splits is not significantly affected by this type of information around the announcement date as defined by the event period. H21: The risk adjusted return of the stock price of the sample of firms announcing stock splits is significantly positively or negatively affected around the announcement date as defined by the event period. QUANTITATIVETESTS AND RESULTS: Did the market react to the announcements of regular two for one, the regular three for two, and the reverse stock splits? Was the information surrounding the event significant? A’priori, one would expect there to be a significant difference in the Actual Average Daily Returns (Day -30 to Day +30) and the Expected Average Daily Returns (Day -30 to Day +30) if the information surrounding the event impounds new, significant information on the market price of the firms' stock. If a significant risk adjusted difference is observed, then we support our hypothesis that this type of information did in fact significantly either increase or decrease stock price. To statistically test for a difference in the Actual Daily Average Returns and the Expected Daily Average Returns over the event period day -30 to day +30, we conducted a paired sample t-test for the three samples and found a significant difference at the 5% level between actual average daily returns and the risk adjusted expected average daily returns. Average Excess Return (AER) graphs are shown below. Results here support the alternate hypothesis H21: The risk adjusted return of the stock price of the sample of firms announcing stock splits is significantly affected around the announcement date as defined by the event period. This finding supports the significance of the information around the event since the market’s reaction was observed. ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS Volume 16 Number 1 Is it possible to isolate and observe the samples’ daily response to the announcement from day -30 to day +30? If so, at what level of efficiency did the market respond to the information and what are the implications for market efficiency? Another purpose of this analysis was to test the efficiency of the market in reacting to the three samples of stock split announcements. Specifically, do we observe weak, semi-strong, or strong form market efficiency as defined by Fama, 1970, in the efficient market hypothesis? The key in the analysis is to determine if the AER and CAER are significantly different from zero or that there is a visible graphical or statistical relationship between time and either AER or CAER. T-tests of AER and CAER both tested different from zero at the 5% level of significance. Likewise, observation of the following CAER Charts (graphs of CAER from day –30 to day +30 for each sample) confirm the significant positive reaction of the risk adjusted returns for the two forward split samples up to 27 pre-announcement and a significant negative reaction for the reverse split sample up to 30 days prior to the stock split announcement. Two for one stock split announcements: ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS Volume 16 Number 1 Three for two split announcement: ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS Volume 16 Number 1 Reverse split announcement: ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS Volume 16 Number 1 There are three forms of market efficiency as defined by Fama, which are strong, semi-strong and weak form efficiency. Observation of the CAER graphs against time for two for one and three for two stock split announcements shows a positive reaction twenty seven days prior to the announcement date. Reverse splits are normally done in order make the stock more appealing for investors with an unusual low market price. (Lawson) Also, reverse splits might be used in order to reduce the number of shareholders of the company. As an example if a 1-10 reverse stock split is made effective, the investor will have ten times less shares than before, but at ten times the price. In the reverse split case, the CAER graph suggests that return falls from day -30 until day -15, while then increasing until day 10. After day 10 the stock starts to level off. CAER graphs for two for one and three for two stock splits show how excess return rises up to 27 days prior to the announcement day. From Day 0 until Day 30 stock returns start to level off. This evidence supports Hypothesis H10, which states that stock price is not affected by this type of information on the announcement date. The stock return has already been adjusted before the stock split announcement is made. The investor cannot outperform the market by using public information. The price has already been affected by the announcement of two for one and three for two stock split announcement. After the announcement day, from days 6 to 16 the return goes up, which is caused by investors that react favorably to the announcement by buying more shares. After this small increase, stock price decreases and levels off. The CAER graphs support the idea that the market is semi- strong form efficient. For the samples analyzed, public information does not affect stock price on the announcement day. Reaction is observed up to 27 days prior to the announcement date which suggests that to be able to â€Å"outperform† the market you must be aware of inside information. CONCLUSION: The purpose of this study was to test whether the investor can make an above normal return by relying on public information impounded in a stock split announcement. Using risk adjusted event study methodology, this study tests â€Å"how† and â€Å"when† public announcements of forward and reverse stock splits affect stock price. Stock split announcement samples include 38 two for one, 39 three for two, and ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS Volume 16 Number 1 10 reverse splits. A total of 36,714 observations for the announcement samples and the corresponding S 500 stock index were analyzed using standard risk adjusted event study methodology. Results suggest that the firms’ public stock split announcements did not affect stock price on the announcement day. Rather, for the two for one and three for two forward split samples, stock price exhibited a significant positive reaction up to 27 days prior to the announcement. For the reverse split sample, stock price exhibited a significant negative reaction up to 30 days prior to the announcement. Results support the semi- strong form efficient market hypothesis since stock prices adjust so fast to public information that no investor can earn an above normal return by trading on the announcement day. Investors greet forward stock split announcement with a positive sign, whereas they view reverse splits as bad news. Management may be using stock splits to adjust stock price to a more marketable range, downward with forward and upward for reverse splits. Evidence here suggests signs of insider trading activity up to twenty-seven days prior to the announcement of the stock split. ASBBS Annual Conference: Las Vegas February 2009 Proceedings of ASBBS REFERENCES: Volume 16 Number 1 Asquith, Paul, Paul Healy, and Krishna Palepu. â€Å"Earnings and Stock Splits. † The Accounting Review 64 (1989): 387-403. Barker, C. A. , â€Å"Effective Stock Splits,† Havard Business Review, XXXIV (January-February, 1956), pp. 101-106 Easely, David, Maureen O'hara, and Gideon Saar. â€Å"How Stock Splits Affect Trading: a Microstructure Approach. † The Journal of Financial and Quantitative Analysis 36 (2001): 25-51. Fama, Eugene F. Efficient Capital Markets: a Review of Theory and Empirical Work. † The Journal of Finance, 25 (1970): 383-417. 9 Dec. 2007 . Fama, Eugene F. , Lawrence Fisher, Michael C. Jensen, and Richard Roll. â€Å"The Adjustment of Stock Prices to New Information. † International Economic Review 10 (1969) : 1-21. 9 Dec. 2007 . Ikenberry, David L. , Graeme Rankine, and Earl K. Stice. â€Å"What do stock splits really signal?. † Journal of Financial and Quantitative Analysis 31. n3 (Sept 1996): 357(19). General OneFile. Gale. Longwood University. 9 Dec. 2007 . Johnson, Keith B. â€Å"Stock Splits and Price Change. † The Journal of Finance 21 (1966): 675-686. 9 Dec. 2007 . Lakonishok, Josef, and Baruch Lev. â€Å"Stock Splits and Stock Dividends: Why, Who, and When. † The Journal of Finance 42 (1987): 913-932. Lamoureux, Christopher G. , and Percy Poon. â€Å"The market reaction to stock splits. † Journal of Finance 42. n5 (Dec 1987): 1347(24). General OneFile. Gale. Longwood University. 9 Dec. 2007 . Lawson, Michael J. â€Å"Reverse Stock splits: The Fiduciary's obligations under State LAw. † California Law Review 63 (1975): 1226-249. Malkiel, Burton G. â€Å"Is the stock market efficient?. † Science 243. n4896 (March 10, 1989): 1313(6). General OneFile. Gale. Longwood University. 9 Dec. 2007 . ASBBS Annual Conference: Las Vegas February 2009

A Study of the Association between Frederick Douglass and Abraham Lincoln

A Study of the Association between Frederick Douglass and Abraham Lincoln Fredrick Douglass and Abraham Lincoln shared an unusual friendship based on the hardships Fredrick had in life and the influence Abraham had on the country and slavery as a whole. Both Douglass and Lincoln wanted to slavery to end. Both had strong influences and ties to slavery. Fredrick Douglass had a very hard life growing up as a slave. Witnessed beating of other slaves but was never beating as a child. As a child he realized that they was no getting out of the situation he was end. He had a lot of time to himself which made him a witness to a lot of things like deaths of fellow adult slaves. â€Å"To be accused was to be convicted and to be convicted was to be punished.† (Douglass 18) Mr. Gore (one of Col Lloyd’s overseer) used to beat slaves no matter how guilty or innocent they were. Mr. â€Å"Gore was a grave man, and, though a young man, he never told jokes, said no funny words, seldom smiled.† (Douglass 19) This made Douglass understand that people were really cruel and had no care for anybody that was a slave. After leaving Col Lloyds plantation Fredrick Douglass was sent to live with Master Hugh’s family. â€Å"Mistress, in teaching me the alphabet, had given me the inch, and no precaution could prevent me from taking the ell.† (Douglass 33) While living on the plantation Hugh’s wife taught Douglass his A B Cs. As soon as Master Hugh’s found out what his wife was doing he and forbid her from teaching him anything else. From then on he slowly start teaching himself to read. It got so bad every time the Hugh’s family felt like the Douglass was alone they felt like he was away trying to learn. Growing up around a lot of white friends made him kind of jealous and mad that he had to be a slave for the rest of his life. â€Å"You will be free as soon as you are twenty-one, but I am a slave for life† (Douglass 34) He also used a lot of his white friends as teachers where he learned more and more. â€Å"I often found myself regretting my own existence, a nd wishing myself dead; and but for the hope of being free, I have no doubt but that I should have killed myself, or done something for which I should have been killed.† (Douglass 36) The thought of being a slave forever was killing him he was very depressed. â€Å"Frederick Douglass never lost faith in the possibility of humankind’s improvement. He confronted, he argued, he pleaded, he bluffed, he threatened and conned — using whatever tactics might work in a particular situation. No aspect of human oppression escaped his concern or compassion.†(Abraham Lincoln and Frederick) Through it all Douglass stood strong and fought for his freedom. He eventually got free and wrote many different writing about his times as a slave that influenced a lot of white and blacks to realize how evil slavery really was. Abraham Lincoln was very influential to the end of slavery. â€Å"As a young man, Abraham Lincoln had witnessed the slave system when he twice traveled down the Mississippi River on a raft to New Orleans.† (Abraham Lincoln and slavery) Lincoln always hated the injustice of slavery ever since he was a child. As a young man he had a lot of African American friends even his barber was African American. Lincoln knew how involuntary servitude felt. It just was unfair for someone to work for someone and it was wrong to not give someone there fair earnings. Especially when you’re gaining from their hard work and labor. In his Alton debate with Senator Stephen A. Douglass in 1858, Mr. Lincoln said: â€Å"That is the real issue. That is the issue that will continue in this country when these poor tongues of Judge Douglass and myself shall be silent. It is the eternal struggle between these two principles – right and wrong –throughout the world. They are the two principles that have stood face to face from the beginning of time; and will ever continue to struggle. The one is the common right of humanity and the other the divine right of kings. It is the same principle in whatever shape it develops itself. It is the same spirit that says, ‘You work and toil and earn bread, and I’ll eat it.’ [Loud applause.] No matter in what shape it comes, whether from the mouth of a king who seeks to bestride the people of his own nation and live by the fruit of their labor, or from one race of men as an apology for enslaving another race, it is the same tyrannical principle.† (Abraham Lincolns Values) He knew how it felt to have to work in the field in a lesser way. While he was young he worked at a farm for his father. In the 1830 Lincoln was a young and poor lawyer but he, alongside with Lyman Trumbull and Gustave Koerner, together destroyed the legal basis of the Negro indenture system which amounted to de facto slavery in Illinois. (Burlingame) He worked hard to help against slavery even as a poor lawyer. He felt very strongly about slavery and worked on many cases including Cromwell vs Baily a case where he won a case for an African American slave girl named Nancy. It was a decision made by the Illinois Supreme Court which was a very historic decision and the first of its kind. (Abraham Lincoln and slavery) The decision was that an African American was free and not for sale. It took a lot of morals and strength for a young lawyer to fight for slave freedom. Lincoln served a single term in Congress. During that term he voted for the Wilmot Proviso multiple times. (Abraham Lincoln and slavery) Wilmot Proviso was law that would prohibit slavery in new U.S. Territory. During The Civil War the main point of war Abraham stuck with was to preserve the Union. . Throughout the whole 1862 he offered many southern states a Compensated emancipation to make things easier for the south which would slowly transition the slave states to Free states. â€Å"President Lincoln took a measured approach to emancipation and set a period of 100 days until he would issue the final Emancipation Proclamation – giving the South a grace period until January 1, 1863 in which to return to the Union.† (Abraham Lincoln and slavery) Lincolns plan during the war was to fight mainly to preserve the Union but to slowly push the publics influence on abolishment. Lincoln said it himself â€Å"When I issued that proclamation, I was in great doubt about it myself. I did not think that the people had been quite educated up to it, and I feared its effects upon Border States.†(Burlingame) The south never took advantage of their grace period and a lot of people thoug ht that Lincoln wouldn’t even issue you the final emancipation. Many slaves never knew they were free until years later after the war was over. Both Fredrick Douglass and Abraham Lincoln were very crucial people in ending slavery. They both influenced many people to fight. Fredrick Douglass writing was very intense and it made people really understand the hardships of the life he lived as a slave. By the end of the war in over 617,000 Americans died by the time the Confederate army surrendered. The landscape was destroyed.

Unit IV Essay Example | Topics and Well Written Essays - 750 words

Unit IV - Essay Example Three years’ statements are provided for the company. In addition, statements can also be viewed on quarterly basis. This is an interesting link and shows prices for IBM stocks since December 31, 1965 to date. The information that is provided include open and close prices for the day, highest and lowest prices and total volume of transactions for the day. One can search the range of dates for which the historical stock prices are to be viewed and the system provides these readily. This link shows the industry in which the company operates. For IBM, the industry is â€Å"Diversified Computer Systems† in the â€Å"Technology† sector. It also gives a brief comparison of the company with the industry changes in stock prices. This page provides comprehensive information about IBM. This includes the full business address of the company, its website, the stock exchanges where the company is listed, number of employees (366,486 for IBM) and a brief summary of IBM together with a description of key executives and their pay package. The research reports provide various analysis of the company by different research agencies like Standard and Poor’s, Plunkett, Reuters etc. The reports are provided for existing and potential shareholders to gain an insight into company’s strategies, operations and market standings. The P/E ratio for IBM is 16.92 (as on June 28, 2007). The stock price depends upon factors like last dividend paid, dividend growth ratio and the interest rate in the market. The actual figure, though, might differ from the calculated one because other non-financial factors like market conditions, speculation, and company’s image are also critical in the actual stock price. 2. Yes. Government needs to intervene into the operations of companies from the viewpoint of a regulator. This is because these listed companies use common people’s money to develop their systems and procedures and hence, have

The Influence of Media Essay Example | Topics and Well Written Essays - 250 words

The Influence of Media - Essay Example Media technologies bring a number of considerable benefits to people some of which include reduced distances, improved international relationships, enhanced level of interactivity, low-cost communication, and improved reach to information. Media also has a strong influence on the world of businesses. People use it to remain updated with ongoing issues related to their particular businesses. For example, people related to the business of stock exchange make continuous use of the internet and television to remain updated with the ups and downs of local and international stock markets. Similarly, marketing professionals make use of a variety of media technologies, such as television and internet marketing to make people aware of new products and services. Moreover, some companies also use social networking websites and the internet to expand their businesses, as well as to introduce their products and services to local and international customers.  Looking at these examples, it is obvious that media has a strong influence on people from all fields of life.