WORLD STARTS TO WORRY AS CHINESE ECONOMY HICCUPS

With the world today, each country cannot solely depend on itself to support its economy. This statement has been proven true multiple times with multiple economies. For instance, The United States economy is on a constant roller coaster, as is many European countries due to the struggling Euro. With just the Euro fluctuations, this impacts each country that does import/export business with any country that is a member of the European Union. Lately, China has become the economy to watch.

It was not long ago that China was the country to watch for its vast improvements and growth. However, due to this rapid growth, many people expected a downturn to occur as well; what does up, must come down. While China is doing all that it can to keep its economy afloat, the declines that the US Dollar and the Euro are taking are making a dramatic impact on other economies. In a roundabout way, when one country struggles, they all struggle due to our interconnected global economies

What these occurrences make me wonder is why does history continue to repeat itself? These ups and downs in the economies have been happening as far back as anyone can remember. That does not seem to matter to the economies that are in the booming process. It is not until afterwards when they are in the aftermath of the boom that people ask what they could have done differently. As the article states, the Vice Finance Minister of China calls upon other countries and China  to help amp up the export markets in order to stimulate demand. What good does amping up export markets do if your main exports go to countries that are in a financial crisis themselves? As we continuously look at the big picture of what China’s struggling economy can do to everyone, we must not overlook what this struggle can do to individuals as well.

Since this has occurred in numerous countries, hopefully China will look at how those situations were handled, and plan accordingly. Instead of the growing economy having a major downturn with an abrupt and difficult landing, the country can gradually decrease their growth allowing for the downturn to be slow and gradual, not causing such a regression as that the United States is currently experiencing.

HOW THE CPA EXAM IS SCORED

            

   Everyone knows that the special score you need to score on the CPA exam is a 75. However, many people also know numerous other little tidbits about how the CPA exam is scored. For instance, if you continue to answer questions correctly, the questions will increase in difficulty, and vice versa. Not only does this happen, but approximately 20% of the questions in each section do not count because they are considered test questions, or survey questions. So, how is the CPA exam truly scored?

                In the past ten years, the CPA exam has undergone drastic changes. During the year 2004, the CPA switched from being a pencil based exam, to a computer based exam. This action in itself made the participants have to learn how to manipulate the computer to take the exam, contradictory to what they had learned in their classes and from review material.

                Due to this change, the grading is no longer done by hand either. All of the grading is done by software that has been programmed to do so, even the simulations. In order to reduce errors in the grading, samples of questions are graded by hand to have a control. For each change to the exam, a new set of scoring features has to be developed.

                While some might wonder if having a computer grader is an advantage or a disadvantage, there are always ways to ensure the credibility. For instance, if ones multiple choice questions leave their total score on the border, the simulations and essays will be graded by hand.

                What I want to know is how we are supposed to trust the grading scale for the CPA exam when we could all essentially be getting different test questions. How are they accurately and efficiently grading us against each other? If they are comparing our data scores to each other in order to test for accuracy using models, what makes this effective?

As for the questions that are scored and not scored, what is the purpose behind this? I understand that they need experimental questions to try out new things, but that could technically hurt the test taker. Why should they not receive credit for answering those questions correctly? Yet, we are punished for answering the other questions incorrectly. Therefore, I believe that if you are asked to provide an answer to a question, then you should receive a score for that question.

Lastly, what I want to know is what happens after the exam. Whenever I have taken tests previously, I have been allowed to view my results personally to see what questions I answered correctly and incorrectly. By knowing this information, I know what I need to prepare for more on the next exam, if there needs to be a next exam. Everyone says you learn from your mistakes, and I believe you can learn more from studying the information you are not fluent in than studying information you already know.

OIL BOOM PUTS STRAIN ON NORTH DAKOTA TOWNS

                After working for the oil industry for the past year, seeing titles like this somewhat catch my attention, especially when boom and strain are used in the same sentence. This tends to worry me, especially with the mass rush of drilling that is occurring in South Western Kansas and North Western Oklahoma. Numerous oil companies from all around are purchasing leases throughout all counties in these areas in order to have drilling rights. However, after they purchased the leases, they have not begun drilling on many of the acres. If they begin to hit some good producing wells, then more rigs will be started.

                With a mere 3.5% unemployment rate, this is actually below the suggested unemployment rate. While some people would be ecstatic with the burst of economy, the people of New Town, ND is not. The town of New Town has doubled in size, unfortunately from the towns’ people’s perspective. Due to this doubling in size, the small town is running out of its resources because it is not used to this much use. The town now has little water, their roads are becoming dangerous with overuse, and their local systems such as sewage, are running out of room or energy.

                This major oil boom jumped North Dakota to be the 3^rd largest oil producing state in the United States. According to Lynn Helms, each acre in this booming area with has a rig on it before they are done drilling. This makes me wonder how it will affect the people who already live there. With all of the drilling happening, what will happen to the land, to the water, or just to the foundation period?

                What this oil boom concerns me with also is the massive surplus the state is receiving due to the tax they receive off of the oil revenue. Due to this surge in revenue, the government is not looking into slowing down the production of oil unfortunately. Without their input, there is little the people can do about the wells. Although there is a surplus going to the government, the people in the town are being hit rather drastically with the inflation rates. A single gallon of milk costs $7, which is difficult for people to afford when they are not receiving the revenues from the oil like the government is.

            
          After it is too late, the residents of this area are beginning to realize how good they had it. No, they were no the wealthiest state in the nation, but they were not the worse off state either. In order for the oil rigs to stay on the towns people good side as best as they can, they have scheduled routine festivals to maintain their good moral. Along with this moral, each rig is bringing in 120 jobs each. When you do the math, they are providing approximately 25,000 just this year. Over the next two decades, this number will continue to rise if their schedule goes as planned and they continue drilling approximately 200 wells per year.

So, should we be in favor of this occurrence happening in Kansas, or against it? In the areas that are being drilled, it is not a highly populated area. One of the major worries that people have is what it will do to their crops and their livestock because that is how they make a living. They cannot depend on the oil as a source of income because there is never a guarantee that you will strike oil. Therefore, they are being more cautious when it comes to signing away the rights to their land. Since this oil boom in North Dakota began due to frac’ing, why not try this on some wells in Kansas instead of drilling complete new ones that will take an enormously larger amount of money than just simply performing a frac. 

A CREDIT SCORE THAT TRACKS YOU MORE CLOSELY

Have you wanted to get a loan recently, but have been turned down? This is partially because financial institutions are looking much more closely to credit ratings than ever before. Not only are banks/financial institutions being stingier with their money, but they are not going to ease up anytime soon.

One reason they are able to do this is because of a new system that has been introduced to the market. Previously, they have been able to look up your credit score. Now, they are able to delve into your past and see almost anything that has to do with your past financially. For instance, this new credit file will show whether you have missed any payments on any of your bills, whether you have to pay child support, if you have used those quick pay day loan establishments, and much, much more.

Is this providing too much information to the financial institution? Should they really need to know all of these details about you? It has come to a point where people are able to track your each and every move, every second of the day. While some people feel like this makes the world a safer place, others believe that this is an invasion of privacy.

The justification behind forming this new type of credit check is to help those giving out larger loans such as mortgages and home equity lenders a better feel on their own financials. The company who founded this new credit check also says that this new check will also help out those with better credit. It will show positive behaviors to the lending institutions.

As time goes on, CoreLogic, the founder of this new credit check, says their check will be able to show even more information as they progress. Thankfully, due to the Fair Credit Reporting Act, you have the right to dispute anything the credit check has to say about you. However, if you want to see what this credit check has to say about you is to purchase it from the company.

Personally, I believe this is just another way for companies to make the population pay more money while indirectly hurting their chances to obtain a loan in the future. Some people make mistakes in their past, why should they be judged on it for the rest of your lives. It is very similar to education. When you go to college the first time, many students are known to screw around, indirectly lowering their grade point average. Then, when they return to school, they have to work even harder to raise their GPA back up to acceptable standards. Therefore, the past haunts the future. Luckily, in the world of academia, many people will understand about the past because we have all been there. Unfortunately with our credit scores, financial institutions tend to not worry about the past because they are worried about their money at this point in time, not the past.

ETHICAL OBLIGATIONS - CASE STUDY 4-4

In California, at the First Community Church, many members of the Board and the church leaders all met to discuss the discrepancies in their collections from the congregation. After approximately forty-five weeks of discrepancies, the church has lost $23,399. Therefore, questions started to arise. After questioning the people responsible for transporting the funds and recording the amounts, they were not any further in the investigation. However, by questioning multiple people, it made the actual person responsible for the missing money begin to feel guilty. Once this questioning arose numerous questions, Jennie, the guilty party, decided to throw the suspicion onto another individual, Joey.

With Jennie having a CPA license, she has particular rules she must follow. By stealing from the First Community Church, Jennie has gone against all of the ethical obligations she undertook when receiving her license. Although Jennie believed her actions were just since she was giving the funds to a local homeless shelter, it does not take away from the fact that she stole from the church. One must always remember that what you think is right, is not always legal.

Not only did Jennie go against her ethical responsibilities by stealing from the church, she also went against them when she attempted to turn the attention towards one of her associates within the church, Joey Ching. This was only a sparing attempt to turn the attention away from her. Not once did she think of how this could affect Joey, until after the Board and church leaders had already formed a new opinion of Joey.

As a member of the Board, she has earned the respect of her fellow Board members, as well as from the church leaders. Although Jennie has their respect, first and foremost, she has responsibilities to them as well. Her responsibilities include keeping track of the amounts of funds donated to the church. Since the church is a non-profit institution, they are not required to file any of their statements with the SEC like public institutions are. Without these requirements, it is very important that internal controls are established. By establishing controls, it can ensure a more accurate account of their financials.

Joey was actually the one responsible for more internal controls being established. It was his suggestion that urged the church to enforce a control in the collection of the funds from the congregation. This control consists of different people collecting the money from the congregation than those who record the amounts and make the deposits.

Once Jennie realized the Board had turned their suspicion towards Joey, she decided to call Joey and inform him of what had happened. Since the Board had asked Joey to attend the next meeting, Jennie asked him not to come due to him having no involvement in the situation. However, if I was Joey, I would still attend the next meeting at the request of the Board. This would help ensure the Board that Joey is not hiding any information and had nothing to do with the embezzlement.

Regardless of whether Joey attended the meeting or not, Jennie would still have to explain and attempt to justify her actions. After deliberating over the situation, Allen Yuen, the executive director of the church, decides to fire Jennie as result of what she had done. In regards to the ethical perspective of this decision, Yuen’s decision and order for Jennie to replace the funds are entirely justified. It would also be justifiable for Yuen to pursue a legal suit against Jennie if he saw fit. This would then entitle the courts to require Jennie to make substantial payments to the church.

Although Jennie believes that she was doing the right thing by helping out the homeless shelter whose members attended the First Community Church, her first obligation was to the church. Her actions of stealing from the church went against her oath to the accounting society when she received her CPA license. Therefore, everything she had worked to achieve in regards to her career had been compromised with these actions. If the church decided to take legal actions against her, she could lose her eligibility to be a CPA. After seeing all of these consequences, one might wonder if she ever thought about these before she stole the money. If only she had gone to the leaders first and seen if the clergy would approve of donating funds to the homeless shelter, she would not have to deal with any repercussions.

IS SARBANES-OXLEY A FAILURE?

          First off, what is Sarbanes-Oxley? Sarbanes-Oxley is a law enacted after the accounting scams of Enron and WorldCom were brought into light. It is a way to protect the shareholders and general public from accounting errors and fraudulent practices in the working economy. Part of the requirements for Sarbanes-Oxley is to have the Chief Financial Officer and the Chief Executive Officer sign off on the financial statements to say they are vouching that these financial statements are correct and not fraudulent.

After knowing this, why would you this Sarbanes-Oxley is a failure? Similar to times during the Enron failure, Lehman Brothers have been attempting to work their accounting magic to impair their accounting statements. One way they are doing this is to sell securities then purchase them back by borrowing money so their finances look great when reporting times come around. Since Sarbanes-Oxley was enacted to prevent events like this from occurring again, many people are wondering what is the point of having Sarbanes-Oxley if people are still getting through the loop holes.

While this is a great point to ponder, there are always going to be loop holes no matter how hard someone tries to get rid of them. Investors are starting to question some of the companies they have invested in since it has been proven once again that fraud can still go undetected. Who can blame them though? The people who the Sarbanes-Oxley Act have since then been questioned about the effectiveness of this law.

Their responses were very interesting to say the least. One can enact as many laws as they wish, but there will always be loop holes through, or ways to go undetected. The purpose of these laws is to shine a brighter light on to many situations in order to understand them and to process them with more ease. All accounting issues will have murkiness about them. The laws job is to attempt to clear away some of those murky areas.

They also brought forward a very good point about laws put forth by the federal government. Just because people break those laws does not mean that we should consider them to be failures and repeal them. For instance, we have a law that disallows murdering someone, yet there are murders committed each and every day. Just because people choose to not follow law does not mean it is a failure. The laws are there in order to attempt to lessen the mishaps.

Therefore, I believe we should not repeal the Sarbanes-Oxley act, which presidential candidate Newt Gingrich suggested previously in his presidential campaign. If we were to repeal this act, it would just open the gates and allow people to go about their fraudulent ways. Do I believe we should just sit back and do nothing though? No. With each event of fraud, I believe the Sarbanes-Oxley Act should be looked at and reevaluated in order to try to prevent acts like these from occurring in the future.

WHAT TO EXPECT WHEN GOING TO COLLEGE

When teenagers/young adults are preparing to go off to college and away from mommy and daddy, there are many things that they should be thinking/worrying about that they are just not. All students are guilty of this statement, as am I. Some of the main things on their mind are where to live or what is there here to do that is fun. As typical teenagers, they are not ready to hit the stage where they have to grow up. Unfortunately for some, they never will grow up. For others that want to take the bull by the horns will be hit with a reality check.

One of the main things many students have to learn is that they are not in high school anymore. Therefore, the teachers are not tied to contracts that say they must pass and no child left behind. Without having these bindings, the teachers let the students be just that, students, if they want to. However, if the students don’t take advantage of their teachers, they will become just another number enrolled in the class. The teachers will not feed you on a golden platter to help you pass the class like it was in high school.

Not only will they not feed you with a golden spoon, they expect you to be able to absorb and grasp much more difficult information than that was asked of you in high school. Instead of just knowing the definitions, you must know the argument behind the definition, and why that definition matters. The most famous questions that all professors have asked me in my collegiate career are why and how. They want to know that you understand the topic in depth and not just enough to pass through because once you get into the real world and have to work, you have to be able to answer these why and how questions.

While many students will laugh at this tip of advice, I believe it is a very good one. Get to know your teachers. Just because you know your teachers does not make you a nerd. Someone once said “it’s not what you know, it’s who you know”. This saying has become one of my favorite mantras, especially since I moved to Wichita and began attending Wichita State University. Once you hit college, your networking skills are your most valuable assets.

One of the best references you can have is that of your professor. Not only can they vouch for your personality, but they can also attest to your aptitude and intellectualness. If you get to know them well enough, they could become your mentor as well. It is because one professor at WSU that I have been able to accomplish everything that I have. For instance, he is one that has helped me receive numerous scholarships, as well as helping me pursue my current job.

If you are willing to ask your teachers for help on a problem, they will help you. Not only that, since you put forth an effort to ask for help and to try to grasp the subject more, they sincerely appreciate that. With that appreciation, if you are on the bubble for a grade, your teacher will take into consideration that you asked for help and put forth an effort and 9 times out of 10 you will get the benefit of the doubt. Besides getting to know your teacher, there are also numerous other things you must accomplish in order to be successful in your college career both intellectually, academically, and socially.

                One thing that college students need to do, which they partially do without thinking about it, is to be social. Being social does not just mean go out and party all the time. By being social, I mean to get involved with things that interest you, whether it’s on campus or off campus. For instance, find a church group that you like if you are religious. If you aren’t religious, but enjoy sports, check into intramurals because they usually have them in every sport. If you are not very athletic, but you have other interests such as flying, plants, etc. there is probably an organization on campus for you.

Speaking of organization, organizations are great things to build your resume. If you have not declared your major, just find a general organization to join where you will be doing many different things. If you have declared your major, there are academic organizations for almost every major available. Lastly, if you do not want to join an academic organization, you are always welcome to pledge one of the Greek houses. Going Greek is believed to build bonds and friendships that will never be broke or forgotten. It is like you have a family away from home.

While getting out there and being active is great, being too active can also have a negative effect. Whether it is being too involved on campus where you spread yourself too thin, or you party too much that you never do anything else. A little bit of partying is perfectly fine because you can build friendships outside of school and are able to expand your horizons and possibly try new legal things.

While I have left the academics for last is because academics are probably the most important thing when you go to college, yet it is one of the things that are generally overlooked, at least in the beginning. If you have a 4.0, that is great and I commend you. However, do not stress if you do not have a 4.0 GPA. Those are few and far between anymore. After speaking to numerous employers this past year, they are not just looking at the 4.0 students. They would rather have someone with a 3.5 GPA that is involved on campus and attempts to give back to the community. While this is not giving you an excuse to slack off on your studies because college is a lot different and more difficult than high school, we want you to succeed and be a well-rounded individual.