Secret reserve accounting is likely to create conflict between Essay

Secret reserve accounting is likely to create conflict between management, shareholders and employees - Essay Example It would represent the surplus of available assets over the capital and liabilities. It is not apparent in the ledger too. Creating secret reserves is likely to strengthen the financial situation of the organisation concerned. The actual financial position and the financial position observed through the balance sheet would be different – the financial position of the company would be stronger than its apparent situation on records. As a result, conflicting inferences are likely to be obtained when it comes to secret reserve accounting. Creating secret reserves will definitely involve the management, some of the employees and the shareholders are likely to remain in dark. Secret reserve accounting will not show even under the suspense account and affect the capital flow in a concealed fashion. Undervaluation of available assets, omitting the rise in asset values, providing extra depreciation on the assets that are fixed, etc. are the methods of secret reserve accounting. In thi s context, the question is in the form of the following statement: Secret reserve accounting is likely to create conflict between management, shareholders and employees. – Critically discuss. ... After that, the various conflict scenarios between the management, shareholders and employees will be critically discussed. Last, the conclusion will be drawn with the final opinion about the research statement. Literature Review The academic literature in the context of secret reserves reveals interesting opinions and scholastic approaches. First, a view on the nature and scope of secret reserve as an accounting term should be considered. â€Å"Secret reserves – this accounting term has been made to cover a multitude of sins: whenever objection is taken to pessimistic writing off of invested values, or disproportionate charges of depreciation, or again to charges to operations or revenue, for capital expenditures which should have been applied to the increase of assets, the answer is, secret reserves.† (Esquerre, 1978) So if the owner of a corporation is creating secret reserve and implementing related accounting practices, his/her capital assets have likely been knock ed down into the pit of secret reserves and that their book value, as it stood at the time, was likely preposterous. Hence the questions in issue would be: Does the owner want to deceive the shareholders, the government, the public or his own self? Does he wish to submit to the directors, the shareholders, the banks and the public, financial statements with a mental footnote to the effect that things are not in truth what they would show on their face? And if it is well to hide the owner’s wealth from some people (in his perspective), can it be believed that anyone capable of reading balance sheets is not in a position to follow accounting facts from year to year, and to point out fluctuations in wealth not supported by the statement of income submitted, and thus unearth secret

UK Food Labelling Essay Example | Topics and Well Written Essays - 3000 words

UK Food Labelling - Essay Example In a nation where consumers want to know more and more about what they are putting into their shopping carts, the way towards a more healthy diet and wider awareness of how eating and shopping habits affect the rest of the country and the world on the whole, more information is needed for each food item and the answer seems to be a label that is ever increasing in size. This essay examines the current guidelines of British food labelling, where Europe feels the guidelines should go and in particular how the elements of the 2006 Conference on Food Labelling might be implemented into UK directives. With reference to stakeholders, current label requirements, necessary information and consumer understanding, the role of the label is ascertained both on its own and in conjunction with other information media now and in the near future. Foods that are sold in the United Kingdom are subject to the legislation of the Food Standards Agency; internally speaking this means that any produce sold, or any packaged foods sold in grocery stores must meet certain standards (Cartwright 1999). Meat, for example, must be traceable to the farm they were raised on so that if any health risks are discovered it will be possible to track down any other potentially harmful produce quickly and efficiently (Fine 1998). Packaged foods must not exceed certain amounts of salt or contain substances not deemed suitable for consumption (Foodlaw; General Guidance for Food Business Operators). In terms of the European Union and food trade agreements, these guidelines have not been imposed strictly on EU nations and so it becomes difficult to legislate on imported produce. This means that the FSA must deal with the concerns of its British population in terms of foreign food standards, plus it must deal with internal pressure to understand the fu ll nutritional value of foods sold locally (FSA; Food Law Enforceement). The FSA is run by an appointed board whose members have recently lobbied for the removal of commercials aimed at children that promote the consumption of unhealthy food items containing high amounts of sugar, salt and fat. The organisation is responsible foremost for the health of British consumers and in this capacity it has taken on many challenges in recent years. The FSA is currently under pressure to establish a new labelling system that might incorporate organic and free range status as well as to stamp each item or ingredient with a place of origin (Mansfield 2004). Consumers want to know that their food is not only healthy for them, but healthy for the environment and that any live animals consumed were treated well before their slaughter (Goldstein and Goldstein 2002). Certainly it is beginning to seem as if there is no end to the information being demanded on each food label, however one must consider whether a person can be expected to eat something that is of questionabl e origin and quality. A traffic-light system has been recently backed by the FSA in terms of categorising several packaged foods by level of nutritional value. A green mark will indicate healthy food to be eaten regularly, yellow indicates moderation and red will indicate a food that should only be eaten on occasion (FSA; Agency's new traffic-light TV ad launched). After