Theoretical And Conceptual Framework Of Airlines

Theoretical And Conceptual Framework Of Airlines In the past of few decades ago, airline industry is being control very tightly with lots of regulations. For example, United State (US) air transportation industry is being control tightly by the Civil Aeronautics Board (CAB) on price, route and schedule of flight. After that in 1978, domestic air transportation market of US is having a free competition among airlines which allowed by the Airline Deregulation Acts of 1978. Through this act, every airline is allowed to set their own price, how frequent they are flying and the destination they want to fly to (Thomas, O.G., 2004). After the deregulation of American airline market, European air transport also experienced deregulation in the middle of 1980. The result of regulation is an increase competition of airlines and to open new entry to new airlines. The airline structure has changed due to deregulations. The airline industry becomes more competitive with numbers of competition. Changes of pricing strategy, marketing strategy and airlines networks such as hubs and spokes had made. There are lots of changes from deregulation such as service patterns, pricing, computerized of the management systems and industry structure. Deregulation and air transport liberalization make a turning point of airlines structure and marketing strategies. Travelers are rational and not willing to pay for a level of service which is not necessary (Pourat, H., 1994). Technological development had improved the management system of airline where they are now having seats inventory system and reservation system had been improved. During that time, lots of existing regulated airlines meet failure and left the airline industry. There are numbers of new entry airlines joined the airline industry as well. (Kaplan, D.P., 1995 cited in Thomas, O.G., 2004) report that, 19 jet operator formerly regulated by the Civil Aeronautics Board (CAB), only 7 survived until 1995. The most famous survivor, Southwest Airlines (created in 1971) remains a prosperous carrier today. Deregulation of airline market also brings in another form of new business model which is the low cost business model into the airlines industry as well. This will be further discussing in the next section. 1.2 Problem Statement The new idea of low cost business model was first brought up by Southwest Airlines in the 1970. It took 15 years for the US airline industry and 20 years for the EU airline industry to take up the challenges of the emergence of low cost airline business model. After the deregulation, in 1978, there are huge numbers of new entry of low cost airlines into the airline industry. Initially these new entry airlines was doing quite success but due to by having only low fare would not be able to sustain their business. They are lack of financial support to compete in the competitive airline industry during that time. There are new entries of airlines and airlines which faced failure and left the industry (Natthida Taweelertkunthon, 2006). There is another new generation of low cost business model emerged in the airline industry in 1990. They startup their business with a strong financial support and with a better and younger aircraft used. This new generation of low cost airline has rewritten the business model to compete in the US competitive airline business environment and also with the commercial airlines market. They had also shifted from their business strategy from product differentiation into low cost. They become more cost advantages through efficiency where their operational efficient help to bring down the cost. The emergence of low cost airline manage to steal customer from the commercial airlines especially price sensitive customer and served with wide range of services. Even those high end customers are not longer willing to pay such a high fare on air transport where this bring benefit toward the low cost airlines. Air transport is not a luxurious thing anymore. At this point of time, traditional airlines faced challenges from low cost airlines where they find difficulty on sustaining their business. In Asia, low cost airline business model is still a new idea and just started in year 2000. Nevertheless, this new business model do faced problem of restrictive of two countries involved. Problem had been solved through the agreement among Southeast Asia (SEA) countries. Air Asia the successful pioneer established in the year 2001 and took the sky in November 2002. The success of Air Asia with low cost business model is the reason of the growth of low cost airlines rapidly in Southeast Asia. There are numbers of new entries of low cost airlines such as Tiger Airways, Nok Air and etc. The fact that Southeast Asia has a massive population is crucial, more than 50 million people with a rising middle class and a growing propensity for travel. The geographical location of surrounding islands without viable and competitive alternatives modes of transportation in Southeast Asia will enhances LCCs an enormous competitive advantage over surface and ground modes. (Natthida Taweelertkunthon, 2006) Low cost business model of low cost airlines is different in between of SEA and US and EU. The application of low cost principle is different. For example, in US and EU, they could have a lower fare on landing at secondary airports. But in SEA, they couldnt be able to avoid air traffic congestion at the core airport easily. Therefore, SEA low cost airlines cannot be able to save and lower fare on landing fees and etc. Besides that, the competition faced by SEA low cost airlines is much competitive as compare to US and EU low cost airlines. This is because of there are lots of competitor in SEA country with low cost airlines. Therefore, the marketing strategy that being implement by the low cost airlines to stay and being competitive is important. This research proposal is focusing on the marketing strategy that implement by low cost airlines to gain competitive advantages in the competitive environment. 1.3 Research Question From the problem statement above, it brings to several research questions where the researcher need to collect information for the purpose of this proposal. What are the marketing strategies implementing by Air Asia? How does marketing strategies influence the sales of Air Asia? What are the objectives, benefits and cost of the marketing strategies implementing? Are there any differences in between of traditional and low cost airlines marketing strategies? How Air Asias marketing strategies make Air Asia to be competitive among other low cost airlines? 1.4 Research Objective Research objectives have been listed down at below to guide the researcher in getting and answering the research questions which had stated above. Identify the marketing strategies that being use by Air Asia. Analyze on the marketing strategies that had being used. Analyze the sales trend of Air Asia. Compare the sales trend and marketing strategies that had implemented. Evaluate the objectives, benefits and cost of the marketing strategies implemented. Compare the marketing strategies of traditional and low cost airline. Evaluate the competitive advantages of Air Asia. 1.5 Theoretical and Conceptual Framework 1.5.1 Conceptual Framework 1.5.2 Theoretical Framework The process of this research proposal is shown in the diagram above. First of all, the problem statement would be discussing that the emergence of low cost airlines in the airline industry. 1.6 Scope and Limitation 1.6.1 Scope In the business world, there are plenty of strategies that are implementing by different company to stay competitive in the business environment. The strategies implemented by company are such as marketing strategy, financial strategy, research and development (RD), management information system (MIS) and etc. in this research proposal, the strategy that is being focus on is marketing strategy of an airline. It is to research on the ways of an airline manage their marketing strategy well to gain competitive advantage. Airlines industry is a huge industry which consist of full service airlines and no frills airlines. This research proposal has limited the research topic into a small scope which is focusing on analyzing the marketing strategy of no frills airlines. Besides that, there are numbers of no frills airlines in the world as well. Therefore, the researcher has further scope the topic down to low cost no frills airline of Malaysia which is Air Asia. 1.6.2 Limitation In every research proposal, there would have some limitations which limit the researcher to collect better information or result for the presentation of proposal. There is limitation which face by the researcher when doing research for this research proposal. AirAsia.com (2010), Air Asia is the only low cost airline available based in Malaysia (which not consist of low cost airline (FireFly) with subsidiaries of Malaysia Airline System Berhad). There do not have choice to researcher where Air Asia is the only available choice to be included as the scope of the topic. Besides that, there are limited journals available about the marketing strategy of a low cost airline. Therefore, it is a limitation for the researcher to collect journals for review the literature. In addition, the marketing strategy of low cost airlines differs from airline to airline. It is difficult to finalize the main marketing strategy that is implementing by low cost airlines. 1.7 Significance of the Study This research proposal is important to YBhg. Dato Tony Fernandes, the CEO of Air Asia and the marketing manager of Air Asia. This is because the research proposal has a summary of the effectiveness of the marketing strategies that being implementing by Air Asia where it makes them to be competitive advantage and a head above other low cost airlines. They would have the opportunity to have an outlook on a different angel of view in order to further improve on their current marketing strategy by advancing the current strategic planning model. Besides that, another targeted reader of this research proposal is the marketing managers of other airlines (such as low cost or full service airlines). This is because they could have the idea of how Air Asia is having such an excellent marketing strategy which brings it to where it is right now as the Worlds Best Low Cost Airline. They could use the strategic that Air Asia is implementing as the role model to market their airlines to be more competitive as well. In addition, this research proposal is useful to students who are majoring in marketing strategic management. This is because it would be a good and appropriate case study to read and learn from on the ways of a company could be able to manage their strategic planning model so well and gain competitive advantages over other competitors. Student would have the opportunity to have an in-depth understanding on the ways of a low cost airline planning the marketing strategy model to suit the business model which to keep cost low and being successful. 1.8 Definition of Term ASK = Available seat kilometer ASK is to measure the carrying capacity of airlines passenger. The formula is seat available x distance flown = carrying capacity per plane Chapter 2: Literature Review According to Natthida Taweelertkunthon (2006), there are two types of low cost carrier which are low cost no frills carrier and low cost low frills carrier. Low cost no frills carrier is those low cost airlines which do not provide any other extra services like on board meals. Tiger Airways and Air Asia are the example of low cost no frills carrier. On another hand, low cost low frills carrier refers to low cost airline which provide some extra service like on-board drinks or snacks. The fare of air ticket is slightly higher than low cost no frills carrier. The example of low cost low frills carrier are Nok Air, One-Two-Go and Jetstar Asia. 2.1 Key Features of Low Cost Airline Business Model Figure 2.1: LCCs Business Model Source: (Jiang, H., 2007) The figure above shows the low cost airline business model which is build up three main key features which are simple product, low operating cost and positioning. 2.1.1 Simple Product / No Frills A low cost airline would keep service and product simple to maintain cost advantages to offer product which is value for money to the customers. A simple product which also means no frills or no extra service such as meals on board provided on board to cut down cost. Besides that, meal on board could also be provided with a mean of good quality with extra charges. The seats are narrow to have a large capacity on plane and maximize seat density. This is to have a large volume of sales to cover the cost on the single journey to the destination. There is an only one class seat on aboard available with no seats arrangement allows (Jiang, H., 2007). 2.1.2 Low Operating Cost In addition, a low operating cost is one of the low cost airlines features. Low cost airlines will only land on secondary airports where the landing fee is much lower as compare to core airports. Secondary airports also have the advantage of less traffic congestion where the flight and stop by and take off again in a shorter time. They would have a shorter turnaround time to avoid paying higher tax charges on parking. Besides that, low cost airline practice direct sales of air ticket or through online reservation and buying. A cost cutting strategy would be implementing by low cost airlines to keep their cost low and to have cost advantages (Dietlin, P., 2004). 2.1.3 Positioning Lastly, low cost airline will market themselves mainly to non-business passengers. For examples, leisure passengers and price sensitive passengers are non-business passengers. In recent years, low cost airline starts to target business travelers as well. This is to grow their market to a more large perspective. A good and effective marketing strategy of low cost airline plays an important role to position their product to the public and to gain competitive advantage as well. Low cost airline will have a short haul which fly from point to point with high frequency. Moreover, low cost airline would likely to become the number one or two on most routes operated (Jiang, H., 2007). 2.2 Challenges of Low Cost Airlines In the competitive environment of airline industry, there are several challenges which will be faced by low cost airlines. Explanations on the challengers that face by low cost airlines are explained as below. 2.2.1 Overcapacity First of all, the airline industry of low cost airline is growing rapidly where there is more new entry of low cost airlines. According to Jiang, H. (2007), the author said that there are over thirty low cost airlines launched in the year of 2002. A sudden increase of a large amount of new entry brings threat to the existing low cost airline. The market is overcrowded and overcapacity where all of the low cost airlines need to compete among airlines to generate revenue for their own. 2.2.2 Pressure on Yield or Average Fares With a large amount of new entry it creates a competitive competition environment among airlines. According to Dietlin, P. (2004), worldwide airline yield will decrease by 1.1% per year until 2010 and intra-Asia yield will decrease much faster than that. New pricing strategy had been introduced by traditional airline to compete with low cost airline. For example, for some routes, traditional airline introduce a low aggressive fare especially those routes that being fly by low cost airlines. Besides that, there is a price competition among airlines. The new entry airlines are having lower fares to compete with existing low cost airlines. This pulls down the average fares per customer where it does not benefit any side on a long run. 2.2.3 Difficulty on Keeping Cost Advantages According to Dietlin, P. (2004), Asian airlines are having a significant lower input costs as compare to American airlines and European airlines. This problem of lower input cost is mainly due to labor cost. Dietlin, P. (unpublished, 2004) stated that Airlines in Singapore unit labor costs are USD 0.77 per ASK and airlines in American is having US 2.92 per ASK which is 279% more. Asian airlines are trying to solve the problem by hiring labor from low-income countries where they could have low wages for their labor to increase unit costs. 2.2.4 Product Differentiation With numbers of low cost airlines in the market push every single low cost airline to differentiate their product to gain as much market share as possible. This simple mean more cost will incur. Airlines are coming up with more aggressive and low fares which it would pull down the average revenue of airlines. Low fare of air ticket is no longer enough to be differentiating from other competitor. They are trying to brand themselves to differentiate from others to gain competitive advantages. 2.3 Marketing Strategy that Implemented by Low Cost Airlines There are several marketing strategies that being implement by low cost airlines to market or position their product to their customer. There are some marketing strategies that being practicing by low cost airline are stated as below. 2.3.1 Frequent Flyer Program Frequent flyer program is one of the marketing strategies of Southwest Airline but it is not adopting by most of the low cost airlines. This program gives out frequent flyer point when customers purchase air ticket each time. By using the accumulate points, it could be redeem for free ticket or upgrade class seat which depend on the company policy (Lederman, M., 2003). As a marketing tool FFPs have proved highly successful (Bennett, M.M., 1996). 2.3.2 Point-to-Point Gutstafsson, L. (2005) says that point-to-point could be included as a cost leadership strategy as well as a marketing strategy as well. Point-to-point refers to the air traffic movement system where the flights fly directly to the final destination without going through the hub. This would be able to help airline to save up cost. At the same time, it could be able to attract customer where they do not need to waste time on transiting at the hub. Customer could be able to have a flight directly to the final destination that they wish to be just with a low fare air ticket. 2.3.3 Branding / Image It is difficult for airlines to differentiate their product from other competitor as the basic product of airlines are the same. Therefore, branding and build up good image or reputation is another option to market their product to the public. Branding is do marketing on a product externally to the public. There is another way round of branding being practicing. As an example, Air Asia do brand their product internally to their staff first before to brand it externally to the public (Marketing-interactive.com, 2008). This is to let the staff of Air Asia knows well on the function and attractive of the product where they could sell it more better externally to the public. 2.3.4 Pricing (Low Fares) Low cost airlines are marketing their products with low fare to compete with traditional full service airlines. Low fare is the main attractiveness of low cost airline as compare to full service airline. Low cost airlines keep on introduce low fare ticket to customer and having promotion sales on air ticket. Fare of air ticket is getting cheap as time goes. Fare of air ticket is the main strategy that plays around by low cost airlines. Chapter 3: Research Design and Methodology 3.1 General Nature of Research The general nature of the research proposal is qualitative methodology. Saunders, M. et. al (1998) defines qualitative research as an array of interpretive techniques which seek to describe, decode, translate and otherwise come to terms with the meaning, not the frequency of certain more or less naturally occurring phenomena in the social world. A deeper insight of the ways of Air Asia managing their marketing strategy would be able to gain from doing qualitative research. A research which is base on the meaning which express through words is qualitative research (Saunders, M. et. al, 1998). 3.2 Research Philosophy Interpretive or phenomenology is the research philosophy that selected by researcher on this research proposal. This philosophy is suitable for research which is on qualitative methodology. Interpretive would help to gain new insight about the reality and deeper understanding on the question of how and why. Researcher is more flexible to adapt with changes during the research process. It is more appropriate to study on a small sample for interpretive philosophy. There are threats by using this philosophy. First of all, it will be time consuming when collecting qualitative data. In addition, analyzing of qualitative data would be difficult especially for inexperience researcher to analyze and generate new theory. 3.2 Research Method and Research Design 3.2.1 Research Method The research method that is being use by the researcher in this research proposal is interview research method. According to Saunders, M. et. al (1998), there are several types of interview such as structured interview, semi-structured interview and unstructured interview. The choice of interview selected is semi-structured interview which would have a list of topics to be cover during the section of interview. Semi-structured interview would be able to cover in depth and exploratory study. It would benefit to gain new insight on the particular topic as well (Saunders, M. et. al, 1998). 3.2.2 Research Design 3.2.2.1 General Research Design General research design is known as research strategy. The three main research strategies are experiment, case study and survey. The research strategy that would be use in the research proposal is case study strategy. Case study would have a detail and intensive knowledge on the single case study that is being studied. Case study is very useful in conducting exploratory of the theory and challenging with come up with a new theory. Besides that, case study would provide a very rich understanding on the case that is being studied (Saunders, M. et. al, 1998). 3.2.2.2 Research Approach Besides that, the research approach that being used is inductive approaches. Inductive approach is building theory which is more for case study research strategy. This approach would get the research to involve in the case study as well. The general idea of the problem would be understand well when inductive approach is being use. This approaches would more likely to use up interview data. It would be able to formulate theory by using the result of data analysis but at the same time it would also end up with the same theory as the existing theory (Saunders, M. et. al, 1998). 3.3 Sources of Data 3.3.1 Primary Research There are several primary researches available such as observation, interview and questionnaire. The primary research which is being use in this research proposal is through interview. A semi-structured and in-depth interview would be conduct in order to have an exploratory study on Air Asias marketing strategy to gain new insight. An open-ended interview questionnaire would be design and use to interview the potential interviewee to collect qualitative data. A face-to-face interview would be held where it allow researcher to have more control and strengthen open-ended question (Mona, C., et. al, 2001). 3.3.2 Secondary Research In this research proposal, the secondary research used is through online database to collect useful journals which are relating to the topic. The main online database is being use is [emailprotected] which is an online database of the Massachusetts Institute of Technology. The information that found through this online database is highly reliable where there is lots of PhD or masters unpublished thesis available on the database. Besides online database as secondary research, websites are being used as well. Official website of Air Asia is being used as the secondary research tool to get information regarding on Air Asia. Newsletters of Air Asias would frequently update the researcher on current news about Air Asia. Besides that, Air Asias blog is one of the secondary research tools where it provides new updates of Air Asia from time to time when latest news of Air Asia could be known from there as well. 3.5 Data Analysis Procedures There is several methods data analysis on qualitative research. The method of data analysis selected for this research proposal is the grounded theory data analysis. This data analysis method uses the inductive research where it collects data from the source of interview. Through interview, data would be able to collect and at the point of time, the data is being grouped accordingly into respective main concept (Gutstafsson, L., 2005). After the grouping of data into different concepts is done, the data could further categories into different supporting theory structure. By doing so, it enable researcher to have a better outlook of the data displayed in the structure. Therefore, researcher could interpret and analyze the data easily. A new theory would be able to generate by using the result of data analysis (Gutstafsson, L., 2005).

Chapter 1 Course Notes

Financial Accounting Theory and Analysis 10e Chapter 1 – The Development of Accounting Theory What is Theory? Webster defines theory as â€Å"Systematically organized knowledge, applicable in a relatively wide variety of circumstances; a system of assumptions, accepted principles and rules of procedure to analyze, predict or otherwise explain the nature of behavior of a specified set of phenomena. † Why is the development of a general theory of accounting important?The development of a general theory of accounting is because of the role accounting plays in our economic society. We live in a capitalistic society which is characterized by a self-regulated market that operates through the forces of supply and demand. What is the relationship of accounting research to accounting theory? The goal of accounting theory is to provide a set of principles and relationships that explains observed practices and predicts unobserved practices.That is, accounting theory should be able to explain why companies elect certain accounting methods over others and should enable users to predict the attributes of firms that elect various accounting methods. And as in other disciplines, accounting theory should also be verifiable through accounting research. Accounting research is needed to attain a more general theory of accounting, and in this regard the various theories of accounting that have been posited must be subjected to verification. The Early History of AccountingZenon Papyri * Accounting records have been found to date back several thousand years in various parts of the world. Discovered in 1915, the Zenon Papyri contained information Apollonius private estate for a period of about 30 years concerning construction projects, agricultural activities, and business operations during the 3rd century B. C. According to Hain, this â€Å"surprisingly elaborate accounting system† was used in Greece since the fi fth century B. C. â€Å"Zenon’s accounting system contained provisions for esponsibility accounting, a written record of all transactions, a personal account for wages paid to employees, inventory records, and a record of asset acquisitions and disposals. In addition, there is evidence that all the accounts were audited. † The Impact of the Renaissance * It wasn’t until approximately 1300-1500 the need arose for more accurate records due to the Italians merchants vigoursly pursing trade and commerce. Italian merchants borrowed Arabic numeral system and the basis of arithmetic and an evolving trend toward the present double entry book keeping system developed. In 1494 an Italian monk, Fra Luca Pacioli, wrote a book on arithmetic that included a description of double-entry bookkeeping. Pacioli’s work, Summa de Arithmetica Geometria Proportioniet Proportionalita, did not fully describe double-entry bookkeeping; rather, it formalized the practices and ideas that had been evolving over the years. Double-entry bookkeeping enabled business organizations to keep complete records of transactions and ultimately resulted in the ability to prepare financial statements. The evolution of joint ventures into ongoing businessesAs ongoing business organizations replaced isolated ventures, it became necessary to develop accounting records and reports that reflected a continuing investment of capital employed in various ways and to periodically summarize the results of activities. By the nineteenth century, bookkeeping expanded into accounting, and the concept that the owner’s original contribution, plus or minus profits or losses, indicated net worth emerged. However, profit was considered an increase in assets from any source, as the concepts of cost and income were yet to be developed.Another factor that influenced the development of accounting during the nineteenth century was the evolution in England of joint ventures into business corporations. Under the corporate form of business, owner s (stockholders) may not be management. Thus many individuals, external to the business itself, needed information about the corporation’s activities. Moreover, owners and prospective owners wanted to evaluate whether stockholder investments have yielded a return.As a consequence, the emerging existence of corporations created a need for periodic reporting as well as a need to distinguish between capital and income. The impact of the industrial revolution and the progressive movement The industrial revolution and the succession of the Companies Acts in England also increased the need for professional standards and accountants. In the later part of the nineteenth century, the industrial revolution arrived in the United States, bringing the need for more formal accounting procedures and standards. Railroads became a major economic influence.These companies created the need for supporting industries, which in turn led to increases in the market for corporate securities and an in creased need for trained accountants as the separation of the management and ownership functions became more distinct. The concept of capital maintenance The major concern of accounting during the early 1900s was the development of a theory that could cope with corporate abuses that were occurring at that time, and capital maintenance emerged as a concept. This concept evolved from maintaining invested capital intact to maintaining the physical productive capacity of the firm to maintaining real capital.In essence, this last view of capital maintenance was an extension of the economic concept of income (see Chapter 5) that there could be no increase in wealth unless the stockholder or the firm were better off at the end of the period than at the beginning. The accountant as a protector of business interests World War I changed the public’s attitude toward the business sector. Many people believed that the successful completion of the war could at least partially be attributed to the ingenuity of American business. As a consequence, the public perceived that business had reformed and that external regulation was no longer necessary.The accountant’s role changed from protector of third parties to protector of business interests. Critics of accounting practice during the 1920s suggested that accountants abdicated the stewardship role, placed too much emphasis on the needs of management, and permitted too much flexibility in financial reporting. During this time financial statements were viewed as the representations of management, and accountants did not have the ability to require businesses to use accounting principles they did not wish to employ. The result of this attitude is well known. In 1929 the stock market crashed and the Great Depression ensued.Although accountants were not initially blamed for these events, the possibility of governmental intervention in the corporate sector loomed. Accounting in the United States since 1930 Meetings bet ween NYSE and AIA One of the first attempts to improve accounting began shortly after the inception of the Great Depression with a series of meetings between representatives of the New York Stock Exchange (NYSE) and the American Institute of Accountants. The purpose of these meetings was to discuss problems pertaining to the interests of investors, the NYSE, and accountants in the preparation of external financial statements.The cooperative efforts between the members of the NYSE and the AIA were well received. However, the post-Depression atmosphere in the United States was characterized by regulation. There was even legislation introduced that would have required auditors to be licensed by the federal government after passing a civil service examination. AAA Similarly, in 1935 the American Association of University Instructors in Accounting changed its name to the American Accounting Association (AAA) and announced its intention to expand its activities in the research and develop ment of accounting principles and standards.The first result of these expanded activities was the publication, in 1936, of a brief report cautiously titled â€Å"A Tentative Statement of Accounting Principles Underlying Corporate Financial Statements. † The four-and-one-half-page document summarized the significant concepts underlying financial statements at that time. SEC (Securities And Exchange Commission) Two of the most important pieces of legislation passed at this time were the Securities Act of 1933 and the Securities Exchange Act of 1934, which established the Securities and Exchange Commission (SEC).The SEC was created to administer various securities acts. Under powers provided by Congress, the SEC was given the authority to prescribe accounting principles and reporting practices. Nevertheless, because the SEC has acted as an overseer and allowed the private sector to develop accounting principles, this authority has seldom been used. However, the SEC has exerted p ressure on the accounting profession and has been especially interested in narrowing areas of difference in accounting practice. * Securities Act of 1933A federal piece of legislation enacted as a result of the market crash of 1929. The legislation had two main goals: (1) to ensure more transparency in financial statements so investors can make informed decisions about investments, and (2) to establish laws against misrepresentation and fraudulent activities in the securities markets. * Securities Exchange Act of 1934 The Securities Exchange Act of 1934 was created to provide governance of securities transactions on the secondary market (after issue) and regulate the exchanges and broker-dealers in order to protect the investing public.Committee on Accounting Procedure The AICPA’s Committee on Accounting Procedure (CAP) was formed in 1936. The committee had authority to issue pronouncements on matters of accounting practice and procedure in order to establish generally accept ed practices. CAP was relatively inactive during its first two years, but became more active in response to the SEC’s release of ASR No. 4. One of the first responses was to expand CAP membership from 7 to 21. Major concerns were: * Use of the historical cost model of accounting.The then-accepted definition of assets as unamortized cost was seen by some critics as allowing management too much flexibility in deciding when to charge costs to expense. * The impact on inflation on reported profits. Lobbies were held by several companies in the 1940s for the use of replacement cost depreciation. Both CAP and the SEC rejected the efforts. This decade long debate didn’t until Congress passed legislation in 1954 amending the IRS Tax Code to allow accelerated depreciation. CAP works were originally published in the form of Accounting Research Bulletins (ARBs).The pronouncements did not dictate mandatory practice and received authority only from their general acceptance. The Acc ounting Research Bulletins were consolidated in 1953 into Accounting Terminology Bulletin No. 1, â€Å"Review and Resume† and ARB No 43 through 51 was published from 1953 until 1959. The recommendations of these bulletins that have not been superseded are contained in the FASB Accounting Standards Codifications. Accounting Principles Board By 1959 the methods of formulating accounting principles were being questioned as not arising from research or based on theory.The CAP was also criticized for acting in a piecemeal fashion and issuing standards that, in many cases, were inconsistent. Additionally, all of its members were part-time and as a result their independence was questioned. Finally, the fact that all of the CAP members were required to be AICPA members prevented many financial executives, investors, and academics from serving on the committee. As a result, accountants and financial statement users were calling for wider representation in the development of accounting principles.The AICPA responded to the alleged shortcomings of the CAP by forming the Accounting Principles Board (APB). The objectives of this body were to advance the written expression of generally accepted accounting principles (GAAP), to narrow areas of difference in appropriate practice, and to in the method of establishing accounting principles was quickly squelched when the first APB chairman, Weldon Powell, voiced his belief that accounting research was more applied and pure and that the usefulness of the end product was a major concern.The APB was composed of from seventeen to twenty-one members, who were selected primarily from the accounting profession but also included individuals from industry, government, and academia. Initially, the pronouncements of the APB, termed â€Å"opinions,† were not mandatory practice; however, the issuance of APB Opinion No. 2 (see FASB ASC 740-10-25 and 45) and a subsequent partial retraction contained in APB Opinion No. 4 (see FASB ASC 740-10-50) highlighted the need for standard-setting groups to have more authority. Financial Accounting Standards BoardDue to the growing criticism of the APB, in 1971 the board of directors of the AICPA appointed two committees. The Wheat Committee, chaired by Francis Wheat, was to study how financial accounting principles should be established. The Trueblood Committee, chaired by Robert Trueblood, was asked to determine the objectives of financial statements. The Wheat Committee issued its report in 1972 recommending that the APB be abolished and the Financial Accounting Standards Board (FASB) be created. In contrast to the APB, whose members were all from the AICPA, this new board was to comprise representatives from various organizations.The members of the FASB were also to be full-time paid employees, unlike the APB members, who served part-time and were not paid. the Accounting Principles Board Formation and structure The APB was composed of from seventeen to twenty-one members, who were selected primarily from the accounting profession but also included individuals from industry, government, and academia. Types of pronouncements * APB Opinions Initially, the pronouncements of the APB, termed â€Å"opinions,† were not mandatory practice; however, the issuance of APB Opinion No. 2 (see FASB ASC 740-10-25 and 45) and a subsequent partial retraction contained in APB Opinion No. (see FASB ASC 740-10-50) highlighted the need for standard-setting groups to have more authority. The flap over accounting for the investment tax Credit This controversy was over the proper method to use in accounting for the investment tax credit. In the early 1960s the country was suffering from the effects of a recession. After President John F. Kennedy took office, his advisors suggested an innovative fiscal economic policy that involved a direct income tax credit (as opposed to a tax deduction) based on a percentage of the cost of a qualified investment.Congress pas sed legislation creating the investment tax credit in 1961. The APB was then faced with deciding how companies should record and report the effects of the investment tax credit. It considered two alternative approaches: 1. The flow-through method, which treated the tax credit as a decrease in income tax expense in the year it occurred. 2. The deferred method, which treated the tax credit as a reduction in the cost of the asset and therefore was reflected over the life of the asset through Rule 203The lack of support for some of the APB’s pronouncements and concern over the formulation and acceptance of GAAP caused the Council of the AICPA to adopt Rule 203 of the Code of Professional Ethics. 10 This rule requires departures from accounting principles published in APB Opinions or Accounting Research Bulletins (or subsequently FASB Statements and now the FASB ASC) to be disclosed in footnotes to financial statements or in independent auditors’ reports when the effects of such departures are material.This action has had the effect of requiring companies and public accountants who deviate from authoritative pronouncements to justify such departures. Criticism of the APB 1. The independence of the members of the APB. The individuals serving on the board had full-time responsibilities elsewhere that might influence their views of certain issues. 2. The structure of the board. The largest eight public accounting firms (at that time) were automatically awarded one member, and there were usually five or six other public accountants on the APB. 3. Response time.The emerging accounting problems were not being investigated and solved quickly enough by the part-time members. The financial Accounting Standards Board (FASB) The Wheat Committee The Wheat Committee, chaired by Francis Wheat, was to study how financial accounting principles should be established. The AICPA quickly adopted the Wheat Committee recommendations, and the FASB became the official body c harged with issuing accounting standards. The Trueblood Committee The Trueblood Committee, chaired by Robert Trueblood, was asked to determine the objectives of fi nancial statements.The FASB was established The Wheat Committee issued its report in 1972 recommending that the APB be abolished and the Financial Accounting Standards Board (FASB) be created. The structure of the FASB The structure of the FASB is as follows. A board of trustees nominated by organizations whose members have special knowledge and interest in financial reporting is selected. The organizations originally chosen to select the trustees were the American Accounting Association; the AICPA; the Financial Executives Institute; the National Association of Accountants (The NAA’s ame was later changed to Institute of Management Accountants in 1991), and the Financial Analysts Federation. In 1997 the board of trustees added four members from public interest organizations. The board that governs the FASB is the Financial Accounting Foundation (FAF). The FAF appoints the Financial Accounting Standards Advisory Council (FASAC), which advises the FASB on major policy issues, the selection of task forces, and the agenda of topics. The number of members on the FASAC varies from year to year. The bylaws call for at least twenty members to be appointed.However, the actual number of members has grown to about thirty in recent years to obtain representation from a wider group of interested parties. FASB Mission The FASB’s mission is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information. In attempting to accomplish this mission, the FASB seeks to: 1. Improve the usefulness of financial reporting by focusing on the primary characteristics of relevance and reliability and on the qualities of comparability and consistency 2.Keep standards current to reflect changes in methods of doing business and changes in the economic environment 3. Consider promptly any significant areas of deficiency in financial reporting that might be improved through the standard-setting process 4. Promote the international comparability of accounting standards concurrent with improving the quality of financial reporting 5. Improve the common understanding of the nature and purposes of information contained in financial reports Type of Pronouncements * Statements of Financial Accounting Concepts Statements of Financial Accounting Standards * Interpretations * Technical Bullentins Originally, the FASB issued two types of pronouncements, Statements of Financial Accounting Standards (SFASs) and Interpretations. Subsequently, the FASB established two new series of releases: (1) Statements of Financial Accounting Concepts (SFACs) and (2) Technical Bulletins. SFASs conveyed required accounting methods and procedures for specific accounting issues and officially created GAAP. In terpretations were modifications or extensions of issues pronouncements.SFACs are intended to establish the objectives and concepts that the FASB will use in developing standards of financial accounting and reporting. To date, the FASB has issued seven SFACs, which are discussed in depth in Chapters 2, 6, and 7. SFACs differed from Statements of Financial Accounting Standards in that they did not establish GAAP. Similarly, they are not intended to invoke Rule 203 of the Rules of Conduct of the Code of Professional Ethics. It is anticipated that the major beneficiary of these SFACs will be the FASB itself.However, knowledge of the objectives and concepts the board uses should enable financial statement users to better understand the content and limitations of financial accounting information. Technical Bulletins were strictly interpretive in nature and did not establish new standards or amend existing standards. They were intended to provide guidance on financial accounting and repor ting problems on a timely basis. Emerging Issues One of the fi rst criticisms of the FASB was for failing to provide timely guidance on emerging implementation and practice problems.During 1984 the FASB responded to this criticism by (1) establishing a task force, the Emerging Issues Task Force (EITF), to assist in identifying issues and problems that might require action; and (2) expanding the scope of the FASB Technical Bulletins in an effort to offer quicker guidance on a wider variety of issues. The EITF was formed in response to two confl icting issues. On the one hand, accountants are faced with a variety of issues that are not fully addressed in accounting pronouncements, such as interest rate swaps or new fi nancial instruments. These and other new issues need immediate resolution.On the other hand, many accountants maintain that the ever-increasing body of professional pronouncements has created a standards overload problem (discussed in more detail below). The FASB establi shed the EITF in an attempt to simultaneously address both issues. The goal of the EITF is to provide timely guidance on new issues while limiting the number of issues whose resolutions require formal pronouncements by the FASB. Standards Overload One of the fi rst criticisms of the FASB was for failing to provide timely guidance on emerging implementation and practice problems.During 1984 the FASB responded to this criticism by (1) establishing a task force, the Emerging Issues Task Force (EITF), to assist in identifying issues and problems that might require action; and (2) expanding the scope of the FASB Technical Bulletins in an effort to offer quicker guidance on a wider variety of issues. The EITF was formed in response to two confl icting issues. On the one hand, accountants are faced with a variety of issues that are not fully addressed in accounting pronouncements, such as interest rate swaps or new fi nancial instruments.These and other new issues need immediate resolution . On the other hand, many accountants maintain that the ever-increasing body of professional pronouncements has created a standards overload problem (discussed in more detail below). The FASB established the EITF in an attempt to simultaneously address both issues. The goal of the EITF is to provide timely guidance on new issues while limiting the number of issues whose resolutions require formal pronouncements by the FASB. Standard setting as a political processA highly infl uential academic accountant stated that accounting standards are as much a product of political action as they are of careful logic or empirical fi ndings. 15 This phenomenon exists because a variety of parties are interested in and affected by the development of accounting standards. Various users of accounting information have found that the best way to infl uence the formulation of accounting standards is to attempt to infl uence the standard setters. The CAP, APB, and FASB have all come under a great deal o f pressure to develop or amend standards so as to benefi t a particular user group.For example, the APB had originally intended to develop a comprehensive theory of accounting before attempting to solve any current problems; however, this approach was abandoned when it was determined that such an effort might take up to fi ve years and that the SEC would not wait that long before taking action. The Business Roundtable engaged in what initially was a successful effort (later reversed) to increase the required consensus for passage of a SFAS from a simple majority to fi ve of the seven members of the FASB.Congressional action was threatened over the FASB’s proposed elimination of the pooling of interest method of accounting for business combinations (see Chapter 16). Two of the most notable examples of the politicizing of accounting standards involved the issues of employee stock options and fair value accounting. Economic Consequences The increased pressure on the standard-set ting process is not surprising, considering that many accounting standards have signifi cant economic consequences. Economic consequences refers to the impact of accounting reports on various segments of our economic society.This concept holds that the accounting practices a company adopts affect its security price and value. Consequently, the choice of accounting methods infl uences decision making rather than just refl ecting the results of these decisions. Consider the release of the FASB’s pronouncement on other postretirement benefi ts (OPRBs) FASB Statement No. 106, â€Å"Other Post Retirement Benefi ts† (see FASB ASC 715-10-30, 60, and 80). The accounting guidelines for OPRBs required companies to change from a pay-as-you-go basis to an accrual basis for health care and other benefi ts that companies provide to retirees and their dependents.The accrual basis requires companies to measure the obligation to provide future services and accrue these costs during the years employees provide service. This change in accounting caused a large increase in recorded expenses for many companies. Consequently, a number of companies simply ceased providing such benefi ts to their employees, at a large social cost. The impact on our economic society of accounting for OPRBs illustrates the need for the FASB to fully consider both the necessity to further develop sound reporting practices and the possible economic consequences of new codifi cation content.Accounting standard setting does not exist in a vacuum. It cannot be completely insulated from political pressures, nor can it avoid carefully evaluating the possible ramifi cations of standard setting. gaap Evolution of phrase: * Changed wording of auditor’s certificate brought about by meetings between NYSE and AIA One result of the meetings between the AICPA and members of the NYSE following the onset of the Great Depression was a revision in the wording of the certifi cate issued by CPAs. The o pinion paragraph formerly stated that the fi nancial statements had been examined and were accurate.The terminology was changed to say that the statements are â€Å"fairly presented in accordance with generally accepted accounting principles. † This expression is now interpreted as encompassing the conventions, rules, and procedures that are necessary to explain accepted accounting practice at a given time. Therefore fi nancial statements are fair only to the extent that the principles are fair and the statements comply with the principles. * The APB’s definition * The Auditing Standards Executive Committee’s definition The current sources of GAAP consist of four levels described as A, B, C, and D by Statement of Auditing Standards No 69 he business reporting research project Steering Committee Working Group the role of ethics in accounting Ethics are concerned with the types of behavior society considers right and wrong. Accounting ethics incorporate social sta ndards of behavior as well as behavioral standards that relate specifi cally to the profession. The environment of public accounting has become ethically complex. The accountants’ Code of Professional Ethics developed by the AICPA has evolved over time, and as business transactions have become more and more complex, ethical issues have also become more complex.Accounting in Crisis – the events of the early 2000s On January 1, 2001, Enron’s stock was selling for over $90 per share. From that time until the early summer of 2001, nineteen investment research fi rms reviewed its performance and twelve had given it a â€Å"strong buy† recommendation, while fi ve others had recommended it as â€Å"buy. †27 Additionally, the company’s 2000 annual report indicated that its auditor had not found any signifi cant accounting problems. However, on August 14, 2001, it was announced that the company’s president, Jeffery Skilling, had resigned after only six months on the job for â€Å"purely personal reasons. Enron used what were termed special-purpose entities (SPEs) now termed variable interest entities (VIEs) to access capital and hedge risk. 28 By using SPEs such as limited partnerships with outside parties, a company may be permitted to increase its fi nancial leverage and return on assets without reporting debt on its balance sheet. 29 The arrangement works as follows: An entity contributes fi xed assets and related debt to an SPE in exchange for an ownership interest.The SPE then borrows large sums of money from a fi nancial institution to purchase assets or conduct other business without the debt or assets showing up on the originating company’s fi nancial statements. The originating company can also sell leveraged assets to the SPE and record a profi t. At the time these transactions took place, the FASB required that only 3 percent of a SPE be owned by an outside investor. If this guideline is met, the SPE d idn’t need to be consolidated and the SPE’s debt was not disclosed on the originating company’s fi nancial statements.Enron used SPEs to new degrees of complexity and sophistication, capitalizing them with not only a variety of fi xed assets and liabilities but also extremely complex derivative fi nancial instruments, its own restricted stock, rights to acquire its stock, and related liabilities. Additionally, as Enron’s fi nancial dealings became more complicated, the company apparently also transferred troubled assets that were falling in value, such as certain overseas energy facilities, its broadband operation, or stock in companies that had been spun off to the SPEs. As a consequence, the losses on these assets were kept off Enron’s books.To compensate partnership investors for assuming downside risk, Enron promised to issue additional shares of its stock. As the value of the assets in these partnerships fell, Enron began to incur larger and l arger obligations to issue its own stock farther down the road. The problem was later compounded as the value of Enron’s stock declined. On October 16, 2001, the company reported a third-quarter loss and its stock dropped to about $33 a share. On October 28, as some of the problems with the SPEs were made public, a special committee of the board of directors of Enron was established under the chairmanship of William C.Powers, dean of the University of Texas Law School. The Powers Committee Report concluded that some Enron employees were directly involved in the SPEs and were enriched by tens of millions of dollars they never should have received. The committee also found that many of the transactions were designed to achieve favorable fi nancial statement results and were not based on legitimate economic objectives or to transfer risk. International Accounting standards A truly global economy emerged during the 1990s, as many U. S. companies generated signifi cant amounts of revenue and profi ts in foreign markets.Multinational companies are faced with decisions on the allocation of resources to their most effi cient uses. These allocations cannot be accomplished without accurate and reliable fi nancial information. Companies seeking capital or investment opportunities across national boundaries face cost and time issues. Capitalseeking fi rms must reconcile their fi nancial statements to the accounting rules of the nation in which they are seeking capital, and investors must identify foreign reporting differences. The increasingly global economy requires that this process be simplifi ed.Thus there is a push to harmonize international accounting standards. The IASB is an independent private sector body that was formed in 1973 to achieve this purpose. Its objectives are 1. To formulate and publish in the public interest accounting standards to be observed in the presentation of fi nancial statements and to promote their worldwide acceptance and observanc e 2. To work generally for the improvement and harmonization of regulations, accounting standards, and procedures relating to the presentation of fi nancial statements33These objectives have resulted in attempts to coordinate and harmonize the activities of the many countries and agencies engaged in setting accounting standards. The IASB standards also provide a useful starting point for developing countries wishing to establish accounting standards. 34 The IASB has also developed a conceptual framework titled the Framework for the Preparation and Presentation of Financial Statements. 35 The conclusions articulated in this release are similar to those contained in the FASB’s Conceptual Framework Project.That is, the objective of fi nancial statements is to provide useful information to a wide range of users for decision-making purposes. The information provided should contain the qualitative characteristics of relevance, reliability, comparability, and understandability. At t he time this book was published, the IASB had issued forty-one Statements of Accounting Standards (IASs) and ten Statements of Financial Reporting Standards (IFRSs). However, since it has no enforcement authority, the IASB must rely on the â€Å"best endeavors† of its members.Neither the FASB nor the SEC is a member of the IASB, so its standards have no authority in the United States at the present time. However, the SEC recently ruled that foreign companies that adopt IASB standards are eligible to list their securities for sale on U. S. stock exchanges (see Chapter 3 for a further discussion of this issue). As noted in Chapters 2 and 3, there is also a movement to have IASB standards become GAAP for U. S. companies. The emergence of multinational corporations has resulted in a need for the increased harmonization of worldwide accounting standards.The role of the IASB is discussed in more detail in Chapter 3, and the IASB standards are reviewed throughout this text in chapte rs dealing with the issues addressed by each IAS or IFRS. Cases †¢ Case 1-1 Sources of GAAP The FASB ASC is now the sole authoritative source for all U. S. GAAP. a. What are the major goals of the FASB ASC? b. How is the FASB ASC expected to improve the practice of accounting? c. What literature is now contained in the FASB ASC? d. What should an accountant do if the guidance for a particular transaction or event is not specifi ed within the FASB ASC? †¢ Case 1-2 Accounting EthicsWhen the FASB issues new standards, the implementation date is frequently 12 months from date of issuance, and early implementation is encouraged. Becky Hoger, controller, discusses with her fi nancial vice president the need for early implementation of a standard that would result in a fairer presentation of the company’s fi nancial condition and earnings. When the fi nancial vice president determines that early implementation of the standard will adversely affect the reported net income f or the year, he discourages Hoger from implementing the standard until it is required. Required: a. What, if any, ethical issue is involved in this case? . Is the fi nancial vice president acting improperly or immorally? c. What does Hoger have to gain by advocacy of early implementation? d. Who might be affected by the decision against early implementation? (CMA adapted) †¢ Case 1-3 Politicalization of Accounting Standards Some accountants have said that politicalization in the development and acceptance of generally accepted accounting principles (i. e. , standard setting) is taking place. Some use the term politicalization in a narrow sense to mean the infl uence by governmental agencies, particularly the SEC, on the development of generally accepted accounting principles.Others use it more broadly to mean the compromising that takes place in bodies responsible for developing these principles because of the infl uence and pressure of interested groups (SEC, American Accounti ng Association, businesses through their various organizations, Institute of Management Accountants, fi nancial analysts, bankers, lawyers, etc. ). Required: a. The Committee on Accounting Procedure of the AICPA was established in the mid- to late 1930s and functioned until 1959, at which time the Accounting Principles Board came into existence.In 1973, the Financial Accounting Standards Board was formed, and the APB went out of existence. Do the reasons these groups were formed, their methods of operation while in existence, and the reasons for the demise of the fi rst two indicate an increasing politicalization (as the term is used in the broad sense) of accounting standard setting? Explain your answer by indicating how the CAP, APB, and FASB operated or operate. Cite specifi c developments that tend to support your answer. b. What arguments can be raised to support the politicalization of accounting standard setting? . What arguments can be raised against the politicalization of accounting standard setting? (CMA adapted) †¢ Case 1-4 Generally Accepted Accounting Principles At the completion of the Darby Department Store audit, the president asks about the meaning of the phrase â€Å"in conformity with generally accepted accounting principles,† which appears in your audit report on the management’s fi nancial statements. He observes that the meaning of the phrase must include more than what he thinks of as â€Å"principles. † Required: a.Explain the meaning of the term accounting principles as used in the audit report. (Do not in this part discuss the signifi cance of â€Å"generally accepted. †) b. The president wants to know how you determine whether or not an accounting principle is generally accepted. Discuss the sources of evidence for determining whether an accounting principle has substantial authoritative support. c. The president believes that diversity in accounting practice will always exist among independent entit ies despite continual improvements in comparability.Discuss the arguments that support his belief. †¢ Case 1-5 The Evolution of the Accounting Profession The nineteenth century witnessed the evolution of joint ventures into business corporations. Required: Discuss how the emergence and growth of the corporate form of business affected perceptions regarding the role of the accounting profession in fi nancial reporting in England and the United States. †¢ Case 1-6 Accounting in Crisis During the early 2000s, the role of accounting and the auditing profession changed and several accounting scandals were uncovered. Required: a.What conditions caused accounting and the auditing profession role to change during this time? b. What major changes occurred as a result of the accounting scandals at that time? †¢ Case 1-7 The FASB The FASB is the offi cial body charged with issuing accounting standards. Required: a. Discuss the structure of the FASB. b. How are the Financial Acco unting Foundation members nominated? c. SFAC No. 2 describes a number of key characteristics or qualities for accounting information. Briefl y discuss the importance of any three of these qualities for fi nancial reporting purposes. CMA adapted) FASB ASC Research For each of the following research cases, search the FASB ASC database for information to address the issues. Cut and paste the FASB ASC paragraphs that support your responses. Then summarize briefl y what your responses are, citing the paragraphs used to support your responses. †¢ FASB ASC 1-1 Variable Interest Entities In this chapter, we discuss how Enron and other companies use Variable Interest Entities (VIEs) to keep the effects of transactions and events off corporate balance sheets. 1. How does the FASB defi ne a VIE?In other words, how does an entity qualify to be a VIE? 2. Is a company that meets the defi nition of a VIE required to consolidate the VIE? †¢ FASB ASC 1-2 Status of Accounting Research Bulle tins Portions of ARB No. 43 are still considered GAAP. Three of the most important issues covered in ARB No. 43 are revenue recognition, treasury stock, and comparative fi nancial statements. Find the appropriate sections of the FASB ASC, originally contained in ARB No. 43, that address these issues. Cite the sources and copy the relevant information. †¢ FASB ASC 1-3 Accounting for the Investment Tax CreditThe accounting alternative treatments for the investment tax credit originally outlined in APB Opinions 2 and 4 are still considered GAAP. Find and cite the FASB ASC paragraphs and copy the relevant information. †¢ FASB ASC 1-4 Securities and Exchange Commission Comments SEC observers frequently provide comments at EITF meetings. Find, cite, and copy the observer comments on: 1. Revenue recognition—customer payments and incentives 2. Debt with conversions and other options 3. Software cost of sales and services †¢ FASB ASC 1-5 Generally Accepted Accounting Pr ocedure GuidelinesFind the guidelines for determining GAAP in the FASB ASC. Room for Debate †¢ Debate 1-1 Which Body Should Set Accounting Standards in the United States? Team Debate Team 1: Argue that the SEC should set accounting standards in the United States. Team 2: Argue that the FASB should set accounting standards in the United States. †¢ Debate 1-2 Should the Scope of Accounting Standards Be Narrowed Further? Team Debate Team 1: Pretend you are management. Argue against the narrowing of accounting choices. Team 2: Pretend you are a prospective investor. Argue for the narrowing of accounting choices.

Sikhism Report Essay - 848 Words

Sikhism Report The Sikh religion is the youngest of all world religions. It began about 500 years ago in the Punjab region of India. Most of its followers still live in this fertile region, which is located in the foothills of the Himalayas Mountains in the northwest India. In all, there are about twelve million Sikhs in the world today. Gods In Sikhism there is only one god (Waheguru) and this god is beyond the understanding of humans. God is ether male or female. God is the creator who created the world for people to use and enjoy. God created people to know the differences and to be able to chooses between right and wrong. God is in everyone’s soul but can only be seen by people that are blessed. Sikhs believe that there is only one†¦show more content†¦Sacred Writings The Sacred writing’s the Sikh people use is known as the Guru Granth Sahib (also known as the Adi Granth) is truly unique among the world’s great scriptures. It is said that there is a supreme Spiritual Authority and the Head of Sikh religion, rather than any living being. It is the only sacred writing of its kind. It not only holds work of it’s own religious founders however also contains writings of people from other beliefs. The Guru Granth Sahib is not worshipped as an idol, but rather respect is placed on the book for the sacred writings that appear within it. It shows moral and ethical rules for development of the soul, Spiritual Salvation, and unity with God. Religious Practices The ideal Sikh religious practice should relax a man’s spiritual consciousness to an ethereal state of mind, where his mind opens to the magnificent of the infinite Universe and all he sees is lords amazing grace all around him. Sikhs celebrate festivals, which recall the lives of the Gurus. They celebrate Baisakhl and the Birthday of the Guru Nanak. Celebrations can include reading of the Granth, singing, meditation, wearing new clothing, and the telling of stories of the Guru. Leaders The word â€Å"Guru† is a Sanskrit word, meaning teacher, honored person, religious person or saint. Sikhism though has a very specific definition of the word Guru It means the descent of divine guidance to mankind provided through ten Enlightened Masters. This honor ofShow MoreRelated Sikh Religion Essay821 Words   |  4 Pages The movie that I chose to do this report on is titled, ‘Bend it Like Beckham.’ It is about a Sikh girl who is being raised in England. This girl is confronted with a lot of issues pertaining to her culture and religion and how these both clash with the culture of England. She wants to do things that her fellow colleagues are doing, but is not allowed due to her parent’s strict respect of their religion. 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Crime Scene Investigation- Creative Writing Essay - 694 Words

Panting, she woke up. She had the nightmare again and this time more vivid than ever. It always began with her running frantically in fear for her life with a man steadily coming after her. Also, it always ended with the same dreadful scene, her choked to death and laying morbidly on the floor and an unnatural angle. Her therapist told her these dreams were brought about due becoming aware of here her mortality due to the death of her boyfriend six months ago in a car accident, and that it she could suffer and be the victim, but she knew better. She knew these were visions, and she knew she would not let it come true. Daysha Denise Abraham was a crime scene investigator of four years. She loved†¦show more content†¦She put on her mask and began her investigation of the room. She saw the normal momentums that usually adorn a mother’s room. Then she looked down at then corpse, and for a brief moment a wave of nausea flashed through her. She could never get used to looking at a dead body. Then she saw it, clutched in her hand was a handful of hair securely intertwined with her fingers. She called in someone with a kit so that they could take it into evidence. This quite probably could have the cased solved in a couple of days. She left the crime scene after many hours of searching the victim’s entire home for any other possible clue. Days like this always left her drained, especially after the husband came home from away who had not been made aware of the situation, and was greeted by the sight of his home surrounded by police, he barged in and saw her examining his wife, the sight of which sent him into shock. She longed for a good nights sleep, but sadly, she would not receive it. The dream was more vivid and outstanding more than ever tonight and she woke up in a frenzied panic. She was tempted to turn herself into the psyche ward of the hospital. 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