Description

1.      1-1       CSR has created great impact on Environmental issues.

There has been more awareness about climate change and environmental issues over the last several years. Organizations need to take notice of issues and problems that the public considers important as any organization that is harming the environment is considered socially irresponsible and risks its relationship with its stakeholders. Another factor that has made CSR important is the use of the internet and easy access to trading information. Any company seen as socially irresponsible will be exposed to all the public and lose stakeholders.

2. 1-2         the major difference between Micro and Macroeconomic environmental factors is that, the former deals primarily with the internal factors of an organization, like the ones you have mentioned such as customers, suppliers, stakeholders and competitors. On the contrary, macroeconomic environmental factors comprise of external factors entailing those of legal, economic and political aspects. Microeconomics have a direct effect on the operational business operations, while the organizational working is affected indirectly by the macro-environment.

3 2-1          Brokerage firms play an important role in price discovery because they connect buyers and sellers while facilitating their transactions.  The communications between these two parties and the availability of each will largely determine the supply and demand for a product or service.  An excess of buyers will increase demand and drive the price up while an excess of sellers will be forced to lower their prices to make their offerings more attractive to buyers.

4. 2-2         The Great Depression caused historically unparalleled increases in unemployment and inflation. People who grew up in this economic climate tend to make saving money a lifelong habit. Growing up in southwest Kansas, I know several farmers who became multi-millionaires due to this focus on conserving money.

How else are people’s financial choices influenced by the economic environment they grew up in? What behaviors resulting from these extreme situations continue to impact the economy? Please share your thoughts.

5. 3-1         The ability of a company to meet it's financial obligations is determined by financial leverage ratios. Financial leverage becomes risky in a cyclical business as the sales and profits are in a state of flux which increases the chances of bankruptcy.

6. 3-2 Investors and banks probably use this information to most due to their responsibility and the risk of giving the financial backing a company is asking. Also, a small business that shows a good trend of ROA could potentially gain investors and making their business more profitable. 

7.4-1          Pro forma statements do provide additional understanding the operations of a company. I believe that between the SOX Act ensures the protection of the statements made in case any information is inaccurate

8.4-2           I believe external auditing is really important when it comes to organization or financial entities. They provide insight on real information that exists in the organization. They have to audit the company without bias and needs to hold true to their findings. I believe by having an external auditor you can have the organization hold up credibility and truth. They also help you identify areas where you could be lacking or no longer in compliance.