Code of Ethics for Professional Accountants Essay

The code provides a conceptual framework approach to the application of the fundamental principles of professional conduct: 1. integrity Honest and trust. Accountants must not be associated with outputs that: contain materially false or misleading statements contain info furnished recklessly omit or obscure information where such would be misleading 2. objectivity Must be impartial, honest and free from conflicts of interest Intrinsically linked to independence, professional independence is seen to be a subset of integrity and objectivity. 3. professional competence and due care Maintain professional knowledge and skill Apply diligence 4. confidentiality 5. professional behavior the conceptual framework approach adopted in the Code is principles-based, setting forth the principles as well as rules of conduct. Threats Self-interest threats Self-review threats Advocacy threats – promoting a position or opinion that compromises objectivity Familiarity threats: a close relationship where one becomes too sympathetic to others Intimidation threats : actual or perceived and is a deterrent from acting objectively An intimidation threat to an account’s objective or competence and due care may arise where the accountant is  pressured by a client. Normative theories of ethics Normative theories of ethics Normative Theories of ethics Teleological consequential Right from wrong is determined from results or consequences of a decision or action Identify consequences (costs and benefits) for each alternative course of action Compare the ratio of costs and benefits (both economically and morally) Make a decision Deontological non-consequential and rule deontology †¢ Consequences are irrelevant †¢ The important is the intention to do the right thing or the motivation to behave appropriately flowing from a sense of duty. One dose the right thing simply because it is the right thing to do regardless the consequences Egoism †¢ A right or acceptable decision is one that maximises net positive benefits to oneself. †¢ Can be restricted if self-interest is pursued within the law and fair competition †¢ Utilitarianism †¢ Does not focus on oneself †¢ A right decision is one that produces the greatest to the greatest number of people Rights †¢ A decision will only be ethical if its intentions do not often the rights of stakeholders †¢ Rights include legal, contractual, special, particular, natural and constitutional rights †¢ Process: Identify the rights particular to the stakeholder Ensure the decision is consistent with respecting such rights Justice †¢ Focuses on distributive justice which refers to the fair and equal distribution of benefits and burdens †¢ Process: Identify the benefits and burdens Assign the benefits and burdens to the various stakeholders Decide whether the destruction of benefits and burdens is fair and equal Aristotle on justice – â€Å"Equals should be treated equally and unequal’s should be treated unequally.† M 3 Types of directors Directors †¢ Board of directors: Not involved in day-to-day decision-making (AWA ltd v Daniels) Must ensure procedures are in place to ensure major operational issues are brought to its attention, Directors ï ¼ dependent Non-independent directors †¢ Can be executive directors Independent Directors †¢ Free from any influence which would bias the decisions †¢ Free from any connections †¢ Should not been paid according to performance achieved †¢ Not involved in the business on a day-to-day basis †¢ Still required to demonstrate a duty of care, however may not equal to an executive director with professional qualifications Executive directors †¢ Occupying and hold an office as an executive in the company †¢ Will never be independent †¢ Can be paid on performance base Non-independent non-executive directors †¢ Should not been paid according to performance achieved Duties of directors (4.62) †¢ Avoid conflicts of interest and where these exist, ensure they are appropriately declared and, as required by law, otherwise managed correctly †¢ Act in the best interests of the corporation (the nominee director must always act in the best interests of the corporation and use their power only for proper purposes when making a decision on board to which they have been appointed as a director)   †¢ Retain discretionary powers and avoid delegating the director’s responsibility   Ã¢â‚¬ ¢ Exercise powers for proper purposes (act within their power; do not abuse their power)   Ã¢â‚¬ ¢ Act with care, skill, and diligence (the standard of care will be different for a director with professional qualifications and a non-executive director)   Ã¢â‚¬ ¢ Be informed about the corporation’s operations Committees of the board 3.19 Purpose: Enhance the effectiveness of the board, and particularly of non-executive directors. Enable the distribution of workload to allow a more detailed consideration to be given to important matters Provide an independent perspective in relation to issues which involve conflicts of interest It do not reduce the responsibility of the board as a whole and care needs to be taken to ensure that all concerned understand their functions The board of directors is still unlimitedly responsible for decisions made by subcommittees The delegation of duties enables examination of issues in greater detail and discussion of issues in the absence of management Requires written terms of reference for each subcommittee and procedures for reporting to the full board Except for certain situations where audit committees are compulsory, it is up to boards to determine whether to have the committees and, if so, which committees are established. Committee Key role(s) Membership Risk management Ensure certain risk is assessed, understood and appropriately managed OECD dose not make specific recommendations about committees Nomination Recommending the succession procedures within an organization Appropriate to include executive directors Majority of independent directors ( UK FRC CGC) Remuneration Deal with remuneration-especially for senior executives Preferable to not include executive directors For large companies, at least 3 independent non-executive directors (UK FRC VFV) Audit Financial reporting and audit matters Oversight of internal control Only non-executive directors, with majority being independent, independent chair, at least 3 members Only independent directors (Sarbanes-Oxley Act) For larger companies, at least 3 independent non-executive directors and at least one member with recent and relevant financial experience (UK FRC CGC) Reports on Corporate Governance Report Key focus Country Cadbury (1992) Best practice recommendations for board and committee structures â€Å"comply or explain†: if a company chose not to comply with a governance recommendation, the company had to identify the noncompliance and then explain it to shareholders UK Greenbury (1995) Directors’ remuneration Additional recommendations designed to enhance transparency in relation to directors’ remuneration UK Hampel (1998) Replaced the Cadbury and Greenbury work â€Å"supercode†, adopted into the listing rules on the London Stock Exchange UK Higgs (2003) Non-executives directors UK Smith (2003) Audit committee UK COSO 3.35 1994 Internal control: a process designed to provide resonable assurance regarding the achievement of objectives CalPERS (pension fund investor) Describe the type of governance it expects to see from companies US Sarbanes-Oxley Act (2002) Strengthened audit requirements, increased financial disclosures and requires mgmt certification of internal controls US  Hilmer (1993) Improving board governance to enhance company performance AUS Bosch (1995) Corporate Practices and Conduct, a report of the committee chaired by Henry Bosch AUS Ramsay (2001) Produced by a committee chaired by Ian Ramsay Examined the adequacy of Australian legislative and professional requirements regarding the independence of external auditors and made recommendations for changes Did not recommend a ban on the provision of non-audit services to audit clients. Instead, he recommened that the disclosure requirements be enhanced. AUS Harris (1997) 3.43 Four guiding principles that should be employed to achieve more effective governance by boards in the public sectors. AUS Uhrig (2003) 3.43 Considered the existing governance arrangements for statutory authorities finding a number of opportunities for improvement. The report also found a lack of effective governance for several of the authorities due to a range of factors.’ Lack of board experience and expertise, together with the potential for conflicts of interests, are impediments to good performance. Limited powers of the board to a statutory body when compared to the private sector. AUS Audit reform: Prohibit auditors to perform certain non-audit services Rotate of audit partners after 5 years Corporate Accountability Each company must establish an audit committee drawn from members of the board of directors. The members of the audit committee must be independent. CEOs and CFOs must certify that the financial reports filed with the SEC do not contain untrue statements or material omissions Financial disclosures and loans: Certain personal loans by a corporation to its executives are prohibited Annual reports filed with the SEC must state that mgmt is responsible for the internal control structure and procedures for financial reporting, and include mgmt’s assessment of the effectiveness of those internal control structures and procedures CalPERS An institutional investor which uses its considerable power as a provider of capital to force corporate governance improvements as it deems appropriate. Minimum standard to which markets throughout the workd should adhere in order to attract its funds. Public Sector Australia – 2003 ASX CGC Recommendations (revised in 2007 and 2010) â€Å"If not, why not† principle, and requires existence of audit committee in Australian top 500 listed companies. – 2004 Corporate Law Economic Reform Program (CLERP) 9 Key changes include audit reform and financial reporting. – ASX CGC Principles and Recommendations 2010 (â€Å"If not, why not† principle) In 2003 ASX produced a list of â€Å"best practice† principles and recommendations on corporate governance and updated them in 2007 (when the term â€Å"best practice† was removed from the title) and 2010. ASX CGC 2007 recommends audit, remuneration and nomination committees. These are therefore subject to the â€Å"if not why not† rule. Audit committee is mandatory for top 500 companies in Australia. For top 300 companies, composition of audit committee is also defined in mandatory terms – minimum 3 members, all non-executive directors, majority to be independent, and independent chair who is NOT Board Chair. Principle Key aspects Lay solid foundations for management and oversight Role and responsibilities of board and management should be established and disclosed Structure the board to add value Composition and size of board to discharge its responsibilities and duties Promote ethical and responsible decision-making Establishment of a code of conduct and diversity policy Safeguard integrity in financial reporting Audit committee to safeguard the integrity of financial reporting by the company Make timely and balanced disclosure Disclosure of all material matters affecting the company Respect the rights of shareholders Facilitate the effective exercise of shareholder rights Recognize and manage risks Risk oversight and management systems; internal controls Remunerate fairly and responsibly Level and composition of remuneration; link to performance 4) International – OECD Principles of Corporate Governance Feb 2010 OECD commentary noted the importance on issues of remuneration, risk management, board practices and exercise of shareholder rights, given the catastrophic performance observed from GFC. BRT 2010 Principles and the US practice are perhaps part of the reason for OECD’s lack of any imperative statements on the issue that chairman and CEO should not be the same person. International perspectives on corporate governance Market based system of governance Emphasises competition and market processes Relationship-based system of governance Emphasise cooperative relationship and consensus Most established: the US and the UK Have great influence on the rest of the world Historical strength of the US and UK capital markets Growth of their investment institutions Adopted by Australia and New Zealand Relies on the representation of interests on the board of directors Long-term large shareholders give the company a degree of protection from both the stockmarket and the threat of takeover Widespread equity ownership among individuals and institutional investors, with institutions often having large shareholdings Institutions including insurance companies, pension funds, and mutual funds. A supervisory board for the oversight of management, where banks play an active role, inter-corporate shareholdings are widespread and, often, companies haves close ties to political elites Shareholder interests as the primary focus of company law An emphasis on minority shareholder protection in securities law and regulation Insider groups monitor management that often acts under their control Stringent disclosure requirements Disclosure based market since numerous investors depend on access to reliable and adequate information flows to make informed investment decisions. The agency problem of the market-based system is much less of a problem in the relation-based control The role of the banks is less central Corporations often have arm’s length relations of equity markets Corporate finance in such countries is highly dependent upon banks, with companies having high debt to equity ratios Banks often have complex and long-standing relationships with corporations (can be debtors and shareholders at the same time) The market-based system assumes full disclosure of information, strict adherence to trading rules and a liquid stock market. The insider system is based on a deeper but more selective exchange of information among insiders It is hard for institutional investors to sell their shares when they are unhappy with the management or board, they become more engaged with companies they are investing in. US Market The board of directors is entrusted with an important responsibility – to monitor the company on behalf of shareholders. It is common for the chair of the board and the CEO to be the same person Committees: Purpose: to enhance the oversight function of boards and limit the powers of CEOs. Tasks: the remuneration of executive directors Nomination of new board members Key decisions in respect of auditing Many large investors closely monitor the corporate governance practices, however, in practice, shareholder in the US possesses limited power to appoint or remove directors Differences among European countries Company law is embedded in different and often unique political cultural and social traditions. Different groups of people have the right to elect the members of the supervisory board. Articulate the purpose of corporate governance in different ways. Laws and regulations relating ti the equitable treatment of shareholders including minority rights in takeovers and other transactions, vary significantly among countries. Different corporate board structures exist. Variations in disclosure requirements and the resulting differences in information provided to investors are a potential impediment to a single European equity market. Germany Relationship-based nature in which all interested stakeholders are able to monitor corporate performance France France and Italy are the European countries with the smallest ownership of company shares by financial institutions. The majority of shares traditionally have been owned by non-financial enterprises, which reflect and elaborate structure of cross and circular ownership. In France, half the firms are controlled by one single investor who owns the absolute majority of capital. Asian approaches of relationship-based systems Significant national differences in corporate governance policy and practice, and many countries are still engaged in a process of institutional development Government-controlled organisations: perform roles that are consistent with the broad social aims of the government, and their governance structure and processes reflect heavy government influence and control. Most companies in Asia either have a majority shareholder or a cohesive group of minority shareholders who act together to control the company. Companies with widely dispersed ownership are rare in Asia, therefore it is difficult to protect the rights of minority shareholders. The boards of directors of companies in Asia often serve a nominal and sometimes superficial role. Disclosure and transparency are often minimal, making it more difficult for regulatory authorities to take action. The lack of institutional shareholders and fund managers reduces the extent of external monitoring by powerful institutions. All countries concerned are committed to a reform of corporate governance due to the 1997 Asian financial crisis. Japan The formal legal features of the Japanese corporate governance system resemble those in most other advanced industrial countries (Corporate law in Japan was modelled on the German System). In Japan, the board plays a more strategic and decision-making role, and is drawn from the ranks of management who are employed by the company. Thus, in the West, the board members are outsiders representing the shareholders; in Japan, the board members are insiders leading management. As a result, the role of Japanese boards may be considered superficial both in supervising the executive management and in responsibility for the company. Problem: there is a tendency for the size of boards to grow as more managers need to be rewarded. Ownership structure: â€Å"keiretsus†: essentially sets of companies with interlocking business relationships and shareholdings. The major keiretsus are centred on one bank. Each bank has significant control over the companies in the keiretsus and acts as a monitoring entity and as an emergency bail-out entity. Advantage: minimise the incidence of hostile takeovers Disadvantage: corporate control being restricted Case studies of governance failure Enron Asset-lite companies: unencumbered by physical assets and heavily dependent on their intangible assets. SPEs: allow the main Enron business to apparently expand without incurring increasing on-balance sheet debt. HIH Failure: inadequate corporate governance checks and balances; lack of financial and managerial diligence and control; and a misconceived and complacent strategy Weaknesses apparent in different cases: The risk management systems have failed in many cases due to corporate governance procedures rather than the inadequacy of computer models alone. Boards had approved strategy but then did not establish suitable metrics to monitor its implementation. Company disclosures about foreseeable risk factors and about the systems in place for monitoring and managing risk have also left a lot to be desired. Accounting standards and regulatory requirements have also proved insufficient in some areas leading the relevant standard setters to undertake a review. Remuneration systems have in a number of cases not been closely related to the strategy and risk appetite of the company and its longer term interests. UK FRC CGC Section A: Leadership A.1.1 The board should meet sufficiently regularly to discharge its duties effectively. A.1.2 The annual report should identify the chairman, the deputy chairman, the chief executive, the senior independent director and the chairman and members of the board committees. A.2.1 operationalises the A.2 principles by stating that the CEO and chair should not be the same person. Main principles application: comply or explain Section B: Effectiveness B.1.2 Except for smaller companies, at least half the board, excluding the chairman, should comprise non-executive directors determined by the board to be independent. A smaller company should have at least two independent non-executive directors. B.2.1 states that there should be a nomination committee which should lead the process for board appointments and make recommendations to the board. This committee should have a majority of independent directors, and it apparent that executive directors may be on this committee. The committee should be chaired by an independent director or the board Chair. B.2.3 identifies that non-executive directors should be considered carefully after they have completed six years’ service on the board. B.3 Directors should be able to spend enough time to do the job properly and that appointment procedures should identify the expected commitment. B.4 Directors are appropriately informed upon joining the board through a proper induction program and by provision of appropriate ongoing training. B.5 Directors who make decisions without adequate information are in breach of their duties. (Company Secretary and the Chair, as well as all directors) B.6 The board is responsible fro evaluating its own performance and the performance of the comm ittees. B.7 Controversially, regular re-election to the board for all directors should, in large companies, be conducted as frequently as annually according to B.7.1 Section C: Accountability C.1 The board should present a balanced and understandable assessment of the company’s position and prospects. C.2 The board must select and define the â€Å"risk appetite† of the company, and it must plan strategies and operations accordingly. C.3.1 An audit committee should be formed and that its membership should meet the requirements. 1. members should be independent no-executive directors 2. for smaller companies, there should be at least two and, for larger companies, at least three, independent directors on the audit committee. 3. in smaller companies, the board chair may be on the audit committee but may not chair the committee. 4. At least one member of the audit committee should have recent and relevant financial experience. C.3.2 The main role and responsibilities of the audit committee should be set our in written terms of reference. C.3.4 Audit committee is the means by which â€Å"whistleblowing† is correctly managed – although the term is no t used in the code C.3.5 The audit committee should ensure appropriate decisions are made about internal audit functions. Section D: Remuneration D.1 Remuneration should be sufficient to attract the right people to be directors but should not be excessive. Recommendations regarding the remuneration directors, and especially the performance-related remuneration of executive directors, is key work to be undertaken by the remuneration committee. D.1.4 Remuneration committee should carefully consider remuneration commitments related to early termination and poor performance. D.2.1 The board should establish a remuneration committee comprised of independent non-executive directors. Must comprised of at least two persons fro smaller companies and at least three for larger companies. D.2.4 Shareholders should be invited to approve new executive incentive schemes and changes to existing schemes D.2.3 Non-executive remuneration should be determined by the board or by the shareholders. If permitted by the company constitution, the board may delegate this work to a committee which might include the CEO. Section E: Relations with shareholders E.1 Dialogue should lead to mutual understanding of objectives. E.2 Boards need to make sure that all shareholders are informaed about annual general meetings and have proper information and the proper opportunity to vote. M 4 Shareholder concept The principal focus of our discussion in this module is on the Anglo-American derivative duties approach to stakeholders. Competitors are treated as stakeholders, stakeholders can also be environment. Agency theory and delegated powers Agency relationship: a contract under which one or more persons engage another person to perform some service on their behalf which involves delegating some decision making authority to the agent. If both parties to the relationship are utility maximisers, there is good reason to believe that the agent will not always act in the best interest of the principal. Assumptions underlying agency theory: All individuals will act in their own self-interest. With potential conflict of interest between the principal and the agent, the agent will tend to act first in ways that will maximise their own personal circumstances Agents are in a position that allows them to further their own interests including at the expense of the principals, as a result of the decision-making power they have been granted and the fact that agents have better access to and control of the information. Delegation Delegation is available unless the corporation’s constitution provides otherwise. It is common practice for boards to delegate day-to-day operational powers to the CEO but not extensive strategic decision-making powers. Agency theory costs Residual loss: any loss or cost or under-performance arising from theses decisions or actions by the agent, represents a residual loss of value to the principals. Overconsumption of ‘perks’ (perquisites or perks are incidental benefits gained in addition to income) Def: the use of such benefits in ways that exceeds expected levels. Effect: reduce both profitability and cash flow available for distribution to shareholders. Empire building Def: acts by management to increase their power and influence in a company for reasons associated with personal satisfaction, including, but not limited to, large financial rewards for having a â€Å"bigger job†. Effect: such personal aggrandisement may have little or no congruence with company profitability or success. Risk avoidance Def: minimise the downside risk that may affect their continued employment. Effect: the organisation may therefore underachieve, with higher returns forgone, representing a loss of value to the shareholders. Differing time  horizons Any management approach that is inconsistent with shareholders’ interest will demonstrate a lack of interest alignment or goal congruence. It can be caused by managers’ self-interest (only current year performance or performance during fix duration), or misunderstand between shareholders and managers. Monitoring Costs Incurred by principals. Compulsory: annual reporting and external auditing Discretionary: construct and analyse activities according to a strategic or Balanced Scorecard Bonding Costs Fully borne by the agent, not the principal. Many costs may be conceptual rather than dollar costs. Restrictions on freedoms are bonding costs borne by agents. Remuneration issues Both payment for work undertaken and for additional rewards that, in agency relationship, ideally will relate to identified superior performance that recognises and encourages goal-congruent behaviour by the agent. Non-executive directors Should not be paid according to performance achieved. Executive directors: Key focus of the non-executive directors who form the remuneration committee New regulation came into place after the Global financial crisis to ensure that remuneration committees should not have executives as members. Has an important role in ensuring that agents are correctly remunerated for their performance and to motivate them to achieve goal congruence. Remuneration structure should not be designed so that self-seeking executives could damage corporations Executives should receive performance payments that are carefully structured. Disclosure and transparency Employees and Consumers New Australian Consumer Law protections against â€Å"misleading potential employees. Whistleblower laws and rules that are becoming very important internationally Laws that prevent legal and other damage to employees (and others) who appropriately del with suspicions of wrongdoing inside organizations Precise rules must be followed if protection is to apply to the whistleblowers. In Aus, the Corporations Act protects an employee if: They report to the right (listed) people only; They are not anonymous; and They are not acting maliciously. Consumers and customers Unconscionable Conduct Protect customers and business consumers where powerful parties to a contract use that power in ways that are sufficiently unfair as to be recognized as unconscionable. Parol evidence: additional words between the parties could not change the clear meaning of a written and signed contract. Dowsett v. Reid (1925) 15 CLR 695: the parol evidence should not apply because of the overall unfairness in the case. Commercial Bank of Australia v. Amadio (1983) : Relief on the ground of unconscionable conduct will be granted when unconscientiously advantage is taken of an innocent party whose will is overborne so that it is not independent and voluntary, just as it will also be granted when such advantage is taken of an innocent party who though not deprived of an independent and voluntary will, is unable to make a worthwhile judgment as to what is in his best interests. Tests for unconscionable conduct: Bargaining power Were the conditions imposed on the consumer reasonably necessary to protect the legitimate interests of the corporation? Was the consumer able to understand any of the documents used? Was any undue influence or pressure exerted on, or were any unfair tactics used against, the consumer? Was the amount paid for the goods or services higher, or were the circumstances under which they could be acquired more onerous, when compared to the terms offered by other suppliers? Where a person uses inside information for their own or a related party’s benefit and/or discloses inside information to somebody whom they ought to have foreseen may use the information inappropriately. Identifying whether the information has been disclosed in such a way that it is available to investors in relevant market Identifying whether a person who understands markets would buy or sell a security were they to know that information. A person who possesses inside information must not use it or disclose it, as such use or disclosure is what actually comprises insider trading. Competition and protecting markets for goods and services Mergers and acquisition In many jurisdictions, regulations are in place that prohibit or limit mergers and acquisitions unless they are formally approved. Abuse of Market power The prohibition on misuse of market power is aimed at preventing powerful entities from taking advantage of that market power for the purpose of disadvantaging weaker org Main principle: Market power Misuse of that power (used that power to eliminate a competitor or prevent a competitor from entering or properly competing in the market). E.g.: predatory pricing, the supply of goods or services below cost over a period of time. It is prohibited because the likely real ambition is for the company to eliminate competitors who cannot sustain the ongoing losses of selling below cost. ACCC Agreements between competitors – Cartel Conduct Tests: 1. Has there been a contract, agreement or understanding 2. Has this occurred b/t competitors 3. Is the arrangement for the purpose of collusion Competitor collusion has a specific term: cartel, which including: Output restrictions Apply restrictions on output what will cause shortages in markets and thus result in price rises Allocating customers, suppliers or territories Dividing up markets, customers or regions b/t competitors Bid-rigging Competitors who are asked to tender or bid for work collude Price-fixing Competitors collude to create common prices (parallel conduct and price-following are legal) Midland Brick case 4.36 Both company and a seinor manager are order to pay civil penalties .International airline pricing cartel Unilateral restrictions on supply (exclusive dealing) A single corporation decides to deal only with certain customers or geographic regions. This type of conduct is generally permitted, but prohibitions may exist if it is shown to lessen competition substantially. 3 characteristics that applied: It is not cartel conduct. The unilateral refusal to deal will be unlawful if there is a â€Å"substantial lessening of competition in a market†. Third-line forcing: a supplier forces a customer to also purchase another item from a third-party. Case: Ku-ring0gai Cooperative building society ltd (1978) 36 FLR An attempt by a building society to force a would-be borrower to take out mortgage insurance with a nominated insurer was in breach of the law. Resale price maintenance A supplier stipulates that the goods it provides must only be resold at or above a certain minimum price. Two tests: Has the supplier specified a minimum price? Has the supplier taken action or attempted to enforce this minimum price? If a reseller sell the product below cost, it is legal for supplier to withhold supply in order to prevent the reseller from ‘losing leading’ with a supplier’s products. Proof, penalties and redress – Criminal and civil Criminal penalties v Civil penalties Criminal cases are always carried out by agencies of the state and never by individuals or corporations. Any aggrieved party can bring an action for a civil case.  For civil case, the standard applied is a proof based on the balance of probabilities rather than proof beyond reasonable doubt as in criminal cases Neither parties will be punished by jail or fines in a civil case, as these apply only in criminal cases. The court may award damages to the injured party may apply injections and make other orders such as rescission of contracts in civil cases. Even third party dropped the case, ACCC can still proceed against wrongdoers on civil or criminal grounds. Redress and penalties for anti-competitive breaches Redress is the ways in which wrongdoers can be required to correct the harm they have caused. Penalties are different from remedies as they are meant to punish a wrongdoer, thus, penalties goes beyond simply redressing wrongs. In Aus, criminal breach of cartel provisions may lead to individuals being fined hundreds of thousands of dollars, and up to 10 years’ jail. Fines for corporations can be as high as $10 million. M5 CSR REPORT Why choose to provide specific information about CSR-related information (Voluntary process) Ethically motivation (Accountability-based) †¢ Organization owns an accountability to various stakeholders †¢ Driven by concerns that stakeholders’ rights to know are being fulfilled Enlightened self-interest (managerial-based) †¢ Economically focused motive to use social and environmental reporting to protect or enhance shareholder value The reason an entity choose to report will in turn inform the decision as to whom it will be directed Will seek to address the information needs of a wider range of stakeholders who might be most impacted by the operations of the entity The target recipients of reports will in turn inform what information will be disclosed and what issue the social and environmental reporting should report †¢ Information to demonstrate accountability for those aspects of the operations for which they are deemed to be accountable, such disclosures would arguably be more objective †¢ Normative theory: prescriptions or shoulds, ideals †¢ Such disclosures will lead to community support and potentially positive financial implications †¢ Stakeholders who are regarded as more important or with more influence will attract additional effort and attention from managers (reporting information to inform the powerful stakeholders) (details in 5.23) Limitations of traditional financial reporting Australia’s current conceptual framework (AASB framework for the preparation and presentation of financial statements) Embrace a shareholder primacy perspective with a narrow notion of accountability The practice of discounting future cash flows Encourage us to shift problems of an environmental nature onto future generations. If we discount future obligations, then, in the current period, they may not be considered to be material Definition of the elements of FR Asset (must be controlled by the entity) The usage of assets which are not controlled by the entity will not be recognized as expenses (usage of public goods which are not exchanged in market transactions) Expenses Based on the definition of asset, use of clean air and water will not be recognized as expenses unless fines are imposed. Examples: Retrenchments in response to the global financial crisis (did not count the expenses of people who lose their jobs) Reserve Bank of Australia increase the interest rate in 2010 to increase profit (did not count the plight of those people who lose their homes) Just-in-time approach Increase the traffic congestion, and pollution Results: Environmental cost is borne by the community. Provides a disincentive for investment in clean technologies. Issues of reliable measurement and probability Environmental cost can not been measure as normal liability since because of the probability issue Many companies used the issue of â€Å"measurability† in number of situations as a rationale for non-disclosure, for provisions. Thus, the related parties would not know the true extent of the organisations’ environment-related obligations. The entity assumption Require the entity to be treated as an entity distinct from its owners, other org and other stakeholders. Externalities caused by reporting entities will typically be ignored Performance measures are incomplete from a broader societal perspective. Key point of import reports (Module 5) Legitimacy Theory (BHP WESTPAC) An organization will take action to manage community perceptions in order to  survive Try and convince stakeholders that it is acting with an acceptable level of ethical and moral conviction whilst pursuing its main objective Legitimacy itself is considered to be a resource on which an org is dependent for survival The theory relies on the notion that there is a social contract b/t the org and the society in which it operates Org must appear to consider the rights of the public at large, not merely those of its investors Legitimacy is assumed to be influenced by community perceptions (which can be influenced by disclosures of information), and not simply by (undisclosed) changes in corporate actions Org will be penalized if they do not operate in a manner consistent with community expectations Meeting the expectations of the community can protect or enhance profitability CSR report could be a central strategy to maintaining corporate legitimacy BCA report about the regulation of CSR report In favor of no regulation needed for CSR report All drivers analysis by the BCA are tied to maximizing the value of business The motivation are tied to managerial reasoning rather than border ethical considerations’ Suggest freely operating markets will lead to the resolution of many existing social and environmental problems PJCCFS 2006 the final report regarding the CSR in 2006 Adopted the same position as that promoted by BCA In favor of not supporting the introduction of legislation With an interpretation of current legislation, the enlightened self-interest is the best way forward for Australian corporations The Brundtland Report Empirical evidence consistent with legitimacy theory Patten (1992 if the Alaskan oil spill resulted in a threat to the legitimacy of the petroleum industry, and not just Exxon’s, then legitimacy theory would suggest that companies operating within that industry would respond by increasing the amount of environmental disclosures by the petroleum  companies for the post 1989 periods, consistent with a legitimization perspective. This disclosure reaction actually took place across the oil industry Deegan and Rankin (1996) Australia study Public disclosure of proven environmental prosecutions has an impact on the disclosure policies of the firms involved Deegan, Rankin & Tobin (2002) Positive correlations b/t negative media attention for certain social and environmental issues and the volume of disclosures on these issues Islam and Deegan (2010) For industry-related social and environmental issues attracting the greatest amount of negative media attention, corporations react by providing positive social and environmental disclosures Current regulations for CSR Reporting National Greenhouse and Energy Reporting Act 2007 (NGER Act) Who are regulated: Ultimate Australian holding company of a corporate group is required to apply if its exceeds one or more of the four thresholds (5.42) What need to be reported: Greenhouse gas emissions Energy production Energy consumption Other info specified under NGER legislation Requirements embodied within the Corporations Act and accounting standards S 299(1)(f) of the Corporations Act Requires that in the directors’ report, which must be included in the annual report, directors must give details of the entity’s performance in relation to environmental regulations â€Å"if the entity’s operations are subject to any particular and significant environmental regulation under a law of the Commonwealth or of a State or Territory† S 299 A of the Corporations Act Listed companies are required to include in the director’s report any information that shareholders would reasonably required. (operations, financial position, and business strategies and prospects for future financial years) However, no specific requirement to disclose financial  impacts. Obligations relating to environmental performance could be considered to be included in either â€Å"provisions† or â€Å"contingent liabilities†, depending on the circumstances. However, many entities choose not to disclose such information due to the probability and reliable measurement issues. Contamination to land caused by the construction of particular plant shall be included as part of the total cost of the property, plant and equipment, with an equivalent amount being included in the liability provisions of the entity National Pollutant Inventory Designed to generate political and economic incentives for industry to move towards cleaner productions Requires industrial facilities operating in Australia to estimate emissions of 93 substances exceeding a specified threshold amount Energy Efficiency Opportunities Act 2006 Encourages large energy-using businesses to improve their energy efficiency by requiring business to identify, evaluate and report publicly on cost-effective energy savings opp

Canadian Wood Toys INC. Essay

I will begin by highlighting the importance of the audit in assessing the risk and identifying the steps in reducing and mitigating the risk that our company is facing. The impact of the risks on global business it is dramatic in our days, changing the entire look of the industries and financial services. Some risks could be anticipated and identified but some could not. Companies now are using more and more key steps and principles to better manage the risks by; *** identifying the risks relevant to the organization *** assess the significance and implications of those risks to the business *** identify and establish a process for collaboration on risk mitigation with other organizations and partners *** integrate Enterprise Risk Management into the organization *** focus resources on key risks in order to achieve the organization’s objectives (Source – PricewaterhouseCoopers – effective ERM) Under IAA Standard 2120 – Risk Management: â€Å"The internal audit activity must evaluate the effectiveness and contribute to the improvement of risk management processes.† Practice advisory 2120.C1 states: –â€Å"During consulting engagements, internal auditors must address risk consistent with the engagement’s objectives and be alert to the existence of other significant risks. In manufacturing companies, production is usually the most important aspect of the entire process mostly due to the high cost incurred, the staffing and the complexity of the departments involved – Production is of vital concern to management because of the important risks associated with the process. I have identified some of the most important risks and how to manage the risks to minimize the impact. Along with the  production process, other areas can be identified as posing risks; distribution, finance, human resources †¦ I have identified below some of the risks with the highest impact in our company: KEY RISKSMITIGATON (examples) The risk of manufacturing defective or substandard products Determine the cause of the quality defect (human error or machine) Trend analysis reports to address the recurrence of the defects The risk of missing deadlines for toys deliveries at Christmas time Review the production scheduling to agree with the specific job orders to avoid overproduction of toys that are not scheduled for delivery The risk of labor insecurity; potential strikes Review labor contracts and minimum wage government regulations; negotiations with union and labor boards The risk of unknown competition on international markets Use various econometric and statistical analysis to monitor the movement of market interest The risk of foreign exchange Use a foreign exchange contract Accept payment in one currency only (US) Hedging of foreign exchange Risk of unanticipated or sudden changes in regulations, codes or standards in regards to the exploitation of the wood and equipment and machineries used The company has to be actively involved in the development of regulations, codes and standards to further improve the safety of the equipment The risk of damage to ecology, scenery – due to over exploitation of forestry Use environmental mitigation programs able to protect and restore the forest Government fire protection programs The risk of accidents in the process of transportation of the logs Regular monitoring of the vehicles Checking drivers hours of work – implementing special schedule of hours Risk of loss of licensing for cutting and harvesting the trees Renewal in advance of the licenses, request from government of auditing the harvesting areas The risk of logging and lumbering fire damage and vehicle damage Forestry and timber Insurance that focuses on logging and lumbering, sawmills, automobiles and equipment The risk related to the liquidity and payment schedules which could lead to credit losses Establish rules for tendering, levels of approval authority and rules for credit control The risk of reporting erroneous financial information for internal and external decision Use external appraisers to evaluate fair value of assets and properties Senior managers should assess their financial reports to determine when they require estimates based on significant judgment; And ensure that independent expertise is applied in deriving the reports The risk mitigation step involves development of mitigation plans designed to manage, eliminate, or reduce risk to an acceptable level. Once a plan is implemented, it is continually monitored to assess its efficacy with the intent of revising the course-of-action if needed. I would like to reiterate as stated in the IAA Standards that the organization should fully understand that management remains responsible for risk management. As Internal auditors, we should provide advice, and challenge or support management’s decisions on risk, as opposed to making risk management decisions. Below are some of the responsibilities that will not fall under the audit team: †¢ Setting the risk appetite. †¢ Imposing risk management processes. †¢ Management assurance on risks. †¢ Taking decisions on risk responses. †¢ Implementing risk responses on management’s behalf. †¢ Accountability for risk management. Question 4 MEMO To: Director of Internal audit Department From: †¦. Assistant Director Internal audit Date: October 06, 2014 CC: As requested, I have prepared a plan for auditing the division of Student Services as part of the Central College Institution. I will detail 6 steps in the audit process but firstly I want to highlight the Standard 2200, Practice Advisory 2200-1 that states the requirements for the engagements planning and outlines the steps. â€Å"Internal auditors must develop and plan for each engagement, including the engagement’s objectives, scope, timing and resource allocations†. â€Å"The Internal auditor plans and conducts the engagement, with supervisory review and approval† 1. The first step is: To obtain specific knowledge of the unit to be audited. In this stage of the process we will gather and review the specific documentation that will help us getting more familiar with the division of food service – residential and campus. Some of the documents we will be reviewing: The annual budget; we have information about how much the overall budget is (8.9mil.); need to know how much is allocated to the food service program and how is spent. Policies and procedures Previous internal audit papers and reports List of the staff; org charts Contracts with food suppliers Documented projects and how the implementation process took place Upon reviewing of the documents we will be able to assess the problems that incurred; it will help us identify any managerial mistakes, any miscommunication between suppliers and management; if there is enough staffing 2. The second step in the audit plan is to: Establish the audit objectives and the scope of the audit. At this stage we need to review all the activities involving food service program step by step. This is to identify areas of weakness, why there are negative reviews; why there is such a small budget allocated to such important segment in the student’s activity in the campus. Also we will be  able to identify whether the appropriate policies and procedures were followed. Is the part time staff working in the 6 food service facilities skilled for the specific job they do? Why there is only part time staffing and no full time jobs; if there are enough employees considering the large division of food service included 6 cafeterias and restaurants plus residential food service. 3. The following step is: The audit methodology. In this stage of the audit process we will be able to gather additional information by interviewing individuals involved in all aspects of the student services division. We will be asking questions in order to determine if there are possible weaknesses that can have a major impact of the effectiveness of the operating and managing the 6 restaurants and cafeterias as well as the residential food service. We will be interviewing the part time staff about the schedule they have, if there are any complaints, if there is enough coverage at specific time of the day i.e. morning and lunch – for the cafeterias and the restaurants. We will be interviewing the students and teachers about the hours of operation of the locations of the food service – they should be open late and they are actually closing early. We will be asking questions about the meal plans and find out if there is anything to improve on 4. The next step is: Determine the audit criteria. This very important step in the audit program will help us identify some of the criteria we can use in order to better assess the practices in the food service division. Budgeting The food service division must have a well established budget and a cost control in place and overseen by qualified staff. Price Management There should be a price verification policy in place to manage better the price of meals provided by the restaurants and the cafeteria – in comparison to other food providers around the campus (beat the price) Staffing there must be a criteria that analyze and conform with the labor standards –  achieve and surpass the minimum wage for the part time employees Food Quality and diversity there should be put in place a more divers meal plan based on the requirements and suggestions from the customers (students –divers ethnicity) new standards for nutritional meals are put in place and need to be followed Food locations management the standards for cleanliness and sanitation that are put in place need to be followed surveys will be handed out or on line surveys to measure the customer satisfaction 5. The following step is: Preparing staffing plans and time budgets At this stage in the audit plan we are dealing with establishing the budget necessary to accomplish the audit scope and the staff required to accomplish the plan in a timely manner. Since we are dealing with specifics in food industry – we have identified areas where there is not enough expertise from our team; therefore we require an additional external consultant (possible a nutritionist that possess the necessary knowledge). For the satisfaction survey we will be using the expertise of the actual marketing staff from the service department to create and implement the survey. 6. The next step is: Communication with management Subsequently, the audit plan needs to be discussing with the management. We will set up time for a meeting with the management to discuss the details over the purpose of the audit. We need to discuss further about the time allocated to the audit plan and go over each proposal for the relevant criteria that was chosen. In the meeting we will highlight the importance of the management active contribution and support to the audit process.

Detecting starch and sugars in food Essay

Aim: To detect the presence of starch and sugars (glucose and fructose) in different food sources. Background: We have many different foods in daily life and many of them contain nutrients like carbonhydrates which are essential to human life. Starch is a polysaccharide, a group of nutrients known as carbonhydrates. Glucose and fructose are monosaccharides, simpler carbonhydrates which are often refered to as sugars. In order to detect the different carbonhydrates content in ranges of food, we used two theories in our experiment. Firstly, starch can react with iodine to create a blue product. Secondly, glucose and fructose are reducing sugars which can be tested by Benedict’s reagent, because the reducing sugars which contain aldehydes group produce red copper(à ¢ ) oxide precipitate when react with Benedict’s reagent. Materials and equipments: 2cm3 of 1% starch solution, 2cm3 of 1% glucose solution, 10 cm3 of 1% iodine solution, 30 cm3 of 1% Benedict’s reagent, small amounts of different type of food (mushrooms, potatoes, bread piece, sweet potatoes, lemon, onion, biscuit, cucumber, tomatoes, peanuts,lettus, tomato sauce, dark green vegetables, milk, cereal), white tile Ten test tubes, test-tube holder, test-tube rack, Nusen burner, Heat-proof mat, safety glasses Procedures: 1. Three drops of 2cm3 of 1% starch solution was placed onto a white tile and three drops of iodine solution was added and observed the solor change. 2. 2cm3 of glucose solution was placed into a test tube and added about five frops of Benedict’s reagent and boiled gently. Observed the color change. 3. Placed small piece of ten foods in ten test tubes and added one drop of water, three drops of 2cm3 of 1% starch to them respectively and orderly. (mushrooms, potatoes, bread piece, sweet potatoes, lemon, onion, biscuit, cucumber, tomatoes, peanuts) Oserved the color change and made records. 4. Placed small pieces of ten foods into ten different test tubes and added one drops of water, five drops of Benedict’s reagent to them in order and respectively. (lemon, lettus, tomato sauce, cucumber, tomato, dark green vegetables, milk, biscuit, cereal, sweet potatoes) And boiled each test tube gently and observed the color change. 5. Made a conclusion based on results. Result 1.In procedure 1, the color of solution changed to blue-black when starch solution reacted with iodine solution. In procedure 2, the color of solution changed to orange-red when the glucose solution reacted with the Benedict’s reagent and was heated. 2.The diagram(fig.1) below shows what I observed directly after the procedure 3 : Food source Color change Mushroom Potatoes Blue-black Bread piece Blue-black Sweet potatoes Purple-blue Lemon Onion Biscuit Blue-black Cucumber Tomatoes Peanuts 3.Then,the diagram(fig.2) below shows what I observed directly after the procedure 4: Food source Color change Lemon Red-orange Lettus Dark purple-red Tomaot sauce Orange Cucumber Red-orange Tomato Orange Dark green vegetable Milk Light orange Biscuit Orange Cereal Orange Sweet potato Red-orange Analysis: 1. In my whole experiment, the procedure 1 and 2 were used as testing thoeries to give us a standard to testify whether certain food source contained certain kinds of carbonhydrates. If in procedure 3 the food turned color near blue or purple, the food must contain starch inside. What’s more, if in procedure 4 the solution in the test tube turned color near red or orange, the food msust contain reducing sugars glucose or fructose. 1. From the information and results I gathered from fig.2, I was able to figure out whether each food contains sugars glucose and fructose or not. The list was shown below(fig.4): From the diagram above we can clearly see that except dark green vegetables all the foods remained contain sugars glucose or fructose. Evaluation: During the experiment, our group made several mistakes and I listed them below to evaluate them respectively. 1. At the beginning of the experiment, during the process of adding water to the washing powder solution to 500cm3. We first ingnored the bubbles above and filled the water till the 500cm3 scale but later on we found the water was much more than 500cm3, so we repeated the experiment from the starting point once again. This time, I controled the water very carefully by pouring it softly along side the walls of the beaker and measuring cylinder to make sure there’s no bubble made during the procedures. My improvement was successful and at the second time we added water accurately to 500cm3. 2. The color of final solution in test tube â€Å"2.5mgdm-3† was as dark as that of the solution with 10mgdm-3and it’s not consistent with the general trend of other solutions. I considered the whole procedure of our experiment thoroughly and thought of two possible errors. Firstly we could have made that firstly we might add more than 5 cm3 standard detergent solution to the test tube. Secondly, because before using the 1000cm3 beaker to heat the test tube we used 500 cm3 beaker at first then we found it too small to hold six test tubes so we removed two test tubes out of the water and then put them into the bigger container. Maybe one of the two previously heated test tube was the â€Å"2.5mgdm-3† one and it’s darker because it has been heated for seconds before others.

Academic Writing Essay Example | Topics and Well Written Essays - 500 words

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Poetry Review Essay Example | Topics and Well Written Essays - 2500 words

Poetry Review - Essay Example The language used moves in a melodious iambic meter, both lulling us to drift with the speaker and awakening us to the paces of life. The first stanza uses repetition and alliteration to help soothe us into the quiet world of the hospital ward even as the tulips are seen to be a rude interruption into this world. Repeated whispers keep the tone quiet: â€Å"how white †¦ how quiet, how snowed-in† (2) and the soothing sound of the ‘th’ letter combination continue in â€Å"this bed, these hands† (4). The speaker is â€Å"learning† and â€Å"lying† (3), the â€Å"light lies† on â€Å"white walls† (Dickie, 1979), giving us a pattern of movement that is rocking on rhythm. As she wakes up, though, focus on the bright red of the tulips forces a quickening pace that is also reflected in the language. Things are â€Å"coming and going† (51), â€Å"the air snags and eddies† (54) and the tulips â€Å"concentrate my attention† (55). The tulips are filling the air â€Å"like a loud noise† (52). It is mostly due to this quickening pace toward life leading into the end of the poem that we are led to believe the poem is an affirmation of life, even though the tone remains as emotionless and detached as it first began. In â€Å"The Fish,† Elizabeth Bishop describes the perfect catch of a venerable old fish as she observes him hanging from her line. The fish hasn’t fought at all to prevent being reeled in and his skin hangs in strips â€Å"like ancient wallpaper† (11), the pattern reminding her of â€Å"full-blown roses / stained and lost through age† (14-15). These images conjure up thoughts of the family home, old and empty now that the children are grown and gone, maintenance no longer a priority in this advanced age. The fish is coated with barnacles, lime and sea-lice, with strings of seaweed attached to his underside. Through this

If Jack is the id, Ralph the ego and Piggy the super-ego in Lord of Research Paper

If Jack is the id, Ralph the ego and Piggy the super-ego in Lord of the Flies, which characters are the id, ego and super-ego in The Sun Also Rises - Research Paper Example The paper attempts to identify the Id, Ego and super-ego in the story The Sun Also Rises comparing the roles of the characters with those of Lord of the Flies where Jack is the id, Ralph is the ego and Piggy is the super ego. The first story depicts the power sharing relationship among some British school children that are individualized with their distinct personality traits. But the later projects the life of a group of characters that are driven by different conflicting forces at the same time. It is necessary to mention that the three protagonists of Golding’s story—Jack, Piggy and Ralph are the allegorical representation of the three different components of human psyche. Ralph represents the consciousness of mind (ego) when he is guided by rationality, while Piggy acts as a voice of conscience representing the super-ego. â€Å"Ralph is practical and organized. For him the most important thing is to light a fire so that the boys can be recognized† (Golding, 14). Jack on the other hand is driven by violent desire for power, hunting, aggression and all other primitive impulses. In Hemingway’s story the characters are in fact multi-layered. Jake indulges carnal desires toward s his fiancà ©e Brett but he also recognizes his physical limitation caused by thee war and this torments his moral self. Brett is always in a frolicking mood enjoying temporary passing affairs. But it is also true that she truly loves Jake and her multiple affairs can be arising from her lack of gratification in Jake’s love. For example, when Jake says, â€Å"there’s not a damn thing we could do†(Golding, 26), Brett replies, â€Å" I don’t want to go through that hell again†. She goes to San Sebastian with Cohn, formerly had a relation with Mike, Patched up with Pedro, the bullfighter in no time. But she has an ultimate realization that keeps her from sexual intimacy. Cohn is a character that is comparatively less intricate, dependent on the

IBM Essay Example | Topics and Well Written Essays - 1000 words

IBM - Essay Example The company and employees welcome change as the main driver of success and profitability. IBM has 32 leaders responsible for certain organizational activities and performance. Customers and technology are the primary driving factors in this arena. Customers want products that satisfy their needs or improve their productivity. IBM looks for ways to deliver these benefits at a lower cost, smaller size, and higher speed. Operating within an industry with this kind of rapid change presents several challenges for personal computer and notebooks, namely production costs, intellectual property owners, and monopolies. In general, IBM is one of the profitable Corporations today and, as predicted, in future (Bellis, 2001). Strengths of IBM Corporation include knowledge, relationships, selling and history. The challenges of the company are based on high quality of products and services. Direct sales force maintains a relationship. Among the weaknesses are high competition and rapidly changing technology market. The innovative PC technology is not cheap and that is why not all the potential customers can afford it today. IBM, in contrast to Dell Corporation, tries to maintain high standards of service proposing and selling (the most important) to its customers high quality products. Taking into account his vision of the company, it is possible to say that central planning and negotiating inputs from might have gone, but there remained the assumption that some other agency would solve the problems: an assumption the CEO himself appeared to share. All of this was taking place within a structure which remained hierarchical, with little involvement of junior management or the workforce, who believed that their product could only sell locally and clung to the assumption that they could sell everything they could produce. All of the IBM leaders participate in the change

Financial and Management Accounting Case Study Example | Topics and Well Written Essays - 3750 words

Financial and Management Accounting - Case Study Example The rise in inventory levels is of particular significance and it is suggested that if a proper stock management plan was put in place, the Company would be able to improve its liquidity and cash flow position. It is also suggested that alternate sources of funding for the Company's expansion, such as debt finance and/or leasing of assets as opposed to relying predominantly on equity finance may have a favourable impact on Foster Ltd., in terms of liquidity and otherwise. Foster Ltd. has gone through rapid expansion over the two years that make up the subject matter of this report. This is evident from the financial statements of the Company as seen from the fact that revenue has grown by 43.75% and the investment in machinery has increased by 60% in 2006. The Company has also increased its long term funding by drawing a '1 Million loan as well as making a share issue. This expansion has reaped benefits in terms of profitability; however the liquidity and cash flow position of the Company has deteriorated. The directors themselves have felt the strain and the Cash Flow Statement prepared for 2006 clearly reflects the problem. The financial statements show further signs of the cash shortage and these will be discussed below. Overtrading is a likely cause for the Company's current unfavourable situation. This refers to the fact that the Company has expanded its sales revenue quite rapidly without securing the additional funds necessary to support the expansion. This report looks to find the underlying causes of the liquidity problem by analysing the available financial statements. Any potential causes found will be discussed and possible remedies suggested. In addition, other ways in which the liquidity position of the Company can be improved will also be considered. Foster Ltd.'s Current Profitability &Liquidity/Cash flow Position As mentioned above, the profitability of Foster Ltd. has seen a commendable increase. The Gross Profit Ratio (GP Ratio) of the Company has increased from 21.88% in 2005 to 26.09% in 2006 (see Appendix). This is a significant rise. It must be noted that just because revenue increases, profitability does not increase as the cost of sales would have increased along with the revenue. However, in Foster Ltd.'s case, the cost of sales has increase in a proportion quite considerably less than that of revenue (36% as compared to 47.35%). It is because of this difference in proportions that Foster Ltd. is exhibiting higher profitability levels. A likely reason for cost of sales increasing by a lower percentage is the achievement of economies of scale. As Foster Ltd. expands and increases production, its cost per unit decreases as it begins to enjoy the benefits of bulk discounts in raw material purchases, as well as being able to spread overhead and other fixed costs over a larger number of u nits thereby reducing the fixed cost per unit. Along with its GP Ratio, the Total Profit ratio has also increased from 8.75% to 8.99% (see Appendix). This may not be a sizable increase but is definitely notable. The reason for the increase in the GP Ratio not being followed through to the Total Profit ratio is that the operating expenses, and the finance and tax costs to a lesser

Justice & Institution Building in the UAE Essay Example | Topics and Well Written Essays - 500 words

Justice & Institution Building in the UAE - Essay Example First, Sheikh Zayed brought law and order without a police force through luring the effective tribesmen and the outlaw tribesmen to let them join the tribal chiefdom. Strategically, he then used the former fugitives to arrest the remaining bandits. His approach was allied to the western tradition of justice. His gesture or strategy in eradicating banditry emulated the western systems of community sensitization that involves groundsmen in eliminating crime. At least, a democratic process was incorporated in this initiative, a sign that the leader embraces some of the western techniques of the justice systems. Second, the leaders also bridged the tension between the western rule of law tradition and Islamic customs by embracing diplomatic ways of handling conflicts. In the past, before the leadership of the renewed leader, the sharia laws existed but favored the wealthy families. However, as the term of the leader commenced he revolutionized the approach and considered the poor households in terms of resource distribution. According to the leader, justice for all was a divine injunction and neither the Quran nor the Sharia laws were going to deter people from getting a fair share of the resources that they deserved. Sheikh Zayed also cooled the tension between the two diverse legislative models through holding a more liberal perception about the sharia laws. As opposed to Sunni, who adopted a more radical and irrational system of justice, he introduced goodwill, kindness, compassion and generosity when interpreting the Sharia. In addition, he advocated justice for all as a means of putting things in their right places and establishing a balance between obligation and rights. Furthermore, he ensured justice for all people irrespective of race, nationality, and religion. His perception in combination with the installation of a more formal justice

Review of One Film Research Paper Example | Topics and Well Written Essays - 1500 words

Review of One Film - Research Paper Example This paper assesses the film for its cultural and historical value by examining the movie from the idea for the film, the drafting of the script, production and post-production exposure and results. Film critic and freelance journalist, Josh Winning (2010) provides thorough insight into back story for Back to the Future. According to Winning (2010), the idea for the film originated with producer Bob Gale and writer/director Robert Zemickis. Both Gale and Zemickis had produced a few films together and had always wanted to produce a time travel film. The idea for Back to the Future originated with Gale back in 1980 when he visited his parents and came across his father’s high school yearbook. Gale found himself wondering what kind of a high school teen his father was and speculated over how he might have reacted to his father had he attended school with him. It was this thinking that gave birth to the idea for Back to the Future (Winning, 2010). Upon his return to Los Angeles, G ale pitched the idea to Zemickis, who speculated over what Gale’s mother might have been like in highschool and the idea for Back to the Future was complete. Together, Gale and Zemichis took their idea to Columbia Pictures and a developmental contract was signed and the two began working on drafting a script. The script was designed to transport 17 year old Marty back to a time when his parents were teens in high school. This meant that Marty would have to go back to the 1950s, an important time in American history and culture development. This was an era in which teens gained some form of economic power and freedom and became empowered (Winning, 2010). The first draft for the script was completed in 1981 and featured Marty as a video pirate and the time machine was largely a fridge. A second draft in 1981 changed Marty to a â€Å"wannabe rock star† and modernised the time machine (Winning, 2010). Ian Nathan (2010) of Empire magazine provides insight into the making of the film Back to the Future by interviewing Gale and Zemickis and executive producer Steven Spielberg who worked with the draft scripts. According to Spielberg, the first draft was a bit too clean and would not hold up against the raunchy comedies that were currently dominating the box office. Moreover, the time machine seemed so stationery and would have had limited mobility for the time traveller. On this basis, the first draft was rejected by Columbia Pictures and a more mobile time machine with wheels was devised for the second draft which was shopped around. The script went back and forth between studios and Gale and Zemickis at least forty times before a final draft with an acceptable level of edginess was achieved. Spielberg acted as an advisor, mediating between various studios and Gale and Zemickis, trying to preserve the integrity of Gale and Zemickis’ ideas and helping them to finally sell the final draft to Universal Pictures (Nathan, 2010). Upon accepting the dr aft, Sid Sheinberg at Universal made three notes to the script. First, the character Dr. Emmett Brown could not be called â€Å"professor† as that would be â€Å"too corny† (Nathan, 2010). Secondly, Brown’s mascot could not be a chimpanzee as no movie with a chimpanzee in it has ever been a hit. Thirdly, the movie title had to be changed from Back to the Future to Spaceman from Pluto. However, Gale and Zemickis would not agree to a movie title change and with Spielberg’

Appraisal of Laura Poppo and Todd Zenger Article

Appraisal of Laura Poppo and Todd Zenger - Article Example The paper introduces one means by which other factors to a company’s transaction cost economics (TCE) in addition to the widely recognized and tested boundary choice theory might be measured in the information services field. After explaining the concepts involved with efficiency models based on boundary choice, the authors reveal the weaknesses introduced in the results of these models as a result of an inability to test for performance-level data. By testing the influence of exchange attributes on the performance levels of markets and firms independently, the authors are able to incorporate production and governance efficiency within their models. The literature review, presented in conjunction with the development of the various hypotheses to be tested, is well-rounded, examining various aspects of the theories that have presented, including their strengths and weaknesses. This provides a very informative background introduction to the subject as well as establishes how the various hypotheses were developed. The sample selected for the study is similarly based upon the work of previous scholars, concentrating on the same group of professionals as being the most involved with the factors under consideration. However, this study differed from others in that it attempted to include a much broader selection of informants than previous studies.

John Adams Mini Series Essay Example for Free

John Adams Mini Series Essay The epic HBO miniseries John Adams is far more than a simple historical drama or biographical account of the life of one of the United States’ founding fathers. The series is a glimpse of a period of American history of which many Americans today are unfortunately ignorant. When most modern Americans think of the period of the Revolutionary War and the birth of the country, barring those that study history during school or as an occupation, they think merely of stilted figures that are more myth than reality. When they think of George Washington, they think of a stoic, almost superhuman figure, that is best known for being so honest that he could not tell a lie as a child when he chopped down a cherry tree. When they think of Thomas Jefferson, they think of a genius that so poetically created the country’s most important documents and made the Louisiana Purchase that doubled the country’s size. When common Americans think of Benjamin Franklin, they think that he invented electricity. And, when they think of John Adams, most Americans unfortunately do not really know what to think, and more than anything else, the miniseries sets forth to enlighten the masses. John Adams, while a seminal figure in the birth of the U. S. , is largely unknown by so many of young and old citizens that can rattle off facts of popular culture faster than American history. Like many of the other founding fathers, he is viewed less as human and more as a mythological figure in history, though his actual contributions are not as pronounced as Jefferson, Washington, and even Franklin. The miniseries sheds light on the mystery of John Adams by showing him as he was: a man. Not only do they portray him as a man, they portray him as flawed, awkward at times, easy to anger and to feel slighted, but always honest and upright. He is also ceaselessly prudent and refuses to shy away from work or duty. If anything, this is the main attribute that allowed a hard-working self-made man like John Adams to elevate himself to the level of president, despite all the odds that seemed to be stacked against him. He lacked the charisma of his cousin, Sam, the finances of many founding fathers like Jefferson, and the leadership skills of Washington, but he still managed to elevate himself through hard work and his sense of duty. By portraying John Adams as a regular man that elevated himself through reason and duty, the makers of the miniseries are trying to remove the myth from the founding fathers and replace it with something far more valuable: the truth. Adams, like Jefferson, Washington, and Franklin were merely men at a pivotal time in history with strong ideals and the courage to not back down from them. Adams was also portrayed as having many of the problems and home life of common Americans today. Though his children were on the whole upstanding, he still experienced problems with his son Charles, who drank and caroused and felt neglected by his father. This aspect of Adams’ duty was portrayed excellently in the miniseries, as his wife Abigail and his children often felt the pain of having their father and husband away so often. Adams, too, was not devoid of feeling the absence, and his love for his wife often kept him grounded, if not feeling lonely on the long journeys to Europe. The relationship between Adams and his wife is one of the most humanizing aspects of the film, and it portrays the intimate life of a founding father without any romantic idealization. The Adamses loved each other deeply, and Abigail would often soothe her husband’s doubts and insecurities, while also instilling in him the confidence to succeed. As a strong, intelligent woman in a time where women were expected to live nothing more than a domestic life, the miniseries portrays Abigail as contributing a great deal to her husband’s views, and therefore a great deal in his actions concerning the founding of the country. At times, she would take a hard line with him, though never browbeating him, and she would remind him of his abilities when he would sometimes forget. This helps make modern viewers understand the humanity of life in America over two-hundred years ago, with a reality previously unseen in historical films and television shows. There are also many intricacies of Revolutionary society which are rarely portrayed, but dealt with so well in the miniseries. Fashion is a huge issue, and the wigs that men wore make a modern person wonder about such trends, possibly even questioning current fashion trends. Today, successful men wear suits with ties around their necks, and rarely wear hats. While in Adams’ time, no men went out without their hat, and few men went out without their wigs. While this could be a substitute for male pattern baldness, it seems more like a status symbol, where men can be judged by the elaborate nature of their wigs and their curls. The time spent on such things like the fashion of the French court, the powdering of the wigs, and the white wigs worn by the King of England and those in court seem to suggest an intricacy that most modern Americans may find strange, but can be no stranger than the Windsor knot. This, like many other things in the miniseries help modern viewers understand that while things like fashion changes throughout time, men do not. The miniseries John Adams is about much more than a man or a myth, but it serves as an adept chronicling of history that personalizes events significant to the founding of America. Not only does it humanize John Adams, it helps explain to modern Americans that might not know the contributions he made and how much everything they take for granted is owed to his hard work and sacrifices. The ideals that Adams held sacred are still echoed in the fabric of America, even if Americans cannot see it. The hard work, the individualism, the sometimes inexcusable lack of diplomacy in exchange for brutal honesty are all characteristics that have been respected and emulated by Americans throughout the past two centuries. Adams had few pretensions, and though he had more than a few character flaws, he was human. More than anything else, the miniseries adeptly portrays that history is not merely words in a history book or romanticized in film, but history is the collected actions of humans throughout time, warts and all. History is created by men that are flawed, all the problems and benefits of family and love are the same, and sometimes, a few regular men rise up and change the world, like John Adams.

Marketing of Barcelonas Tourism Industry

Marketing of Barcelonas Tourism Industry

Cocaine Pharmacology and Effects on the Brain

Cocaine Pharmacology and Effects on the Brain Cocaine is a highly addictive substance abused worldwide. Its primary mechanism of action involves blockage of dopamine, norepinephrine and serotonin transporters in specific brain regions, mainly the dopamine reuptake system located on mesolimbic neurons. Cocaine increases the dopaminergic neurotransmission and triggers adaptive changes in several neuronal circuits underlying reinforcement, reward, sensitisation and the high addictive potential of cocaine. However, the long-lasting behavioural effects associate with cocaine addiction show there is complex neurotransmitters interaction within the reward circuit. Excitatory amino acid and inhibitory GABA transmitters also play a part in these changes. Glutamatergic systems regulate dopamine function, while GABAergic modulate the release of basal dopamine and glutamate. Understanding of the molecular and cellular mechanisms that lead to cocaine addiction has given new treatment methods in the pharmacological field to develop better med icine. Especially, useful monoamine agonists treatment may be successfully in controlling behaviour and lead to long term moderation of drug taking. However, more studies are needed in order to identify safe and efficacious pharmacotherapy. Introduction Cocaine, an alkaloid derived from the leaves of Erythroxylon coca is a psychostimulant drug linked to human addiction (Dackis et al., 2001). Cocaine acts as a local anaesthetic with sympathomimetic and vasoconstrictor properties (White and Lambe, 2003). In addition, cocaine is a potent uptake blocker for dopamine (DA), norepinephrine and serotonin (Carrera et al., 2004). As shown in figure one, the chemical structure of cocaine molecule contains two rings, the six-carbon phenyl ring shown on the right and the unusual nitrogen (N)-containing ring shown on the left, both necessary for its biological activity (Meyer and Quenzer, 2005). Cocaine acts by blocking the dopamine transporter within the mesocorticolimbic reward system. Blockade of the transporter increases the level of dopamine in this region of the brain. Increased dopamine level is responsible for the euphoric effect of cocaine (Butterner et al., 2003). However, the long lasting effects of behavioural characteristics of cocaine addiction, such as sensitisation and the vulnerability to the reinstatement of drug seeking years after the acute rewarding effects of the drug have disappeared, shows that there must be complex interactions between additional neurotransmitter systems (Kalivas, 2004). In contrast to dopaminergic system, excitatory amino acid and inhibitory GABA transmitters also play a role in these changes. Glutamatergic systems regulate dopamine function, while GABAergic modulate the release of basal dopamine and glutamate (Baler and Volkow, 2006). Additionally, cocaine can also interact with several receptors and ion channels, including nicotin ic acetylcholine, and opioid receptors coupled to voltage-gated Ca2+ and K+ channels (Kobayashi et al., 2007), resulting in prolonged elevation of extracellular dopamine. The potential abuse of cocaine is mainly based on the rapid development of tolerance to the euphoric effects (Butter et al., 2003). Cocaine addiction is an uncontrollable and continually relapsing drug taking disorder (Torregrossa and Kalivas, 2008). The behavioural manifestation of addiction is mediated by adaptations that chronic administration of drug abuse elicits at the level of individual neurons in the CNS. These adaptations alter the functional properties of neurons, which in turn change the properties of the functioning of neural circuits in the brain in which these neurons are involved (Nestler, 1997). The probability that one will become addicted to cocaine depends on the method, the frequency and the duration of ones cocaine intake (Carrea et al., 2004). Historical aspect of cocaine use The use of cocaine for personal satisfaction dated back over thousands of years ago, when Erythroxylon coca, the plant from which cocaine is extracted was used by indigenous people from Andes and South America for religious, mystical, social, and medical purposes (Dackis et al., 2001). The coca leaf was chewed by these communities because of its euphoric effects and its ability to reduce fatigue and hunger and to enable sustained periods of heavy labour (White and Lambe, 2003). This leaf was introduced in Europe in 1492 by the Spaniards, when they conquered South America and discovered that this leaf would be useful for performing hard labour (Julien et al., 2008). Eventually, the Spaniards started using the coca leaf as a method of payment for the native worker in gold and silver mine, who would take the leaf to reduce appetite and increase physical stamina. Cocaine alkaloid was first isolated by a German chemist Friedrich Gaedche in 1855 (Julien, 2008). The ability of cocaine in reducing fatigue and hunger were recognised by Sigmund Freud who used cocaine himself. Freud and others also recognised the ability of cocaine to cure opioid addiction. As a result, Freud prescribed cocaine to his patients who were addicted to morphine (Boghdadi and Henning, 1997). Unfortunately, many of these patients became addicted to cocaine themselves (Grilly, 1998). Morphine, which is similar to cocaine in reducing hunger, was extracted from opium in the early 1800s by Friedrich Wilhelm Adam Sertà ¼rner. But its use spread in 1853 when the hypodermic needle was developed (Grilly, 1998). Morphine was used as a pain reliever and as a cure for opium and alcohol addiction. Its extensive use during the American Civil war resulted with people suffering from the soldiers disease (addiction), (Julien et al, 2008). Forms of cocaine The use of crack cocaine, or crack, was first reported in 1980 in Europe and the US as a new drug with rapid stimulating effects. Crack cocaine is a by-product of cocaine, C17H21NO4 (figure 1). However, crack is formed through different processes. First, the coca leaves are transformed into a product known as basic cocaine paste. The paste is then turned into either crack cocaine through chemical treatment with sodium bicarbonate, or into a less potent water soluble salt, cocaine hydrochloride when it is refined with either acetone or sulphuric and hydrochloric acids. The powdered hydrochloride salt can be snorted, and because it is water soluble, it can be injected intravenously (Boghdadi et al., 1997). However, in the hydrochloride form, cocaine decomposes when it is heated and is destroyed to temperature, making it unsuitable for use by inhalation. In contrast, crack cocaine is converted to a stable vapour by heating it (Julien et al., 2008), making it more potent than the concentrated form. The paste and crack cocaine forms can be smoked either on their own or together with tobacco or cannabis-marijuana and sometime mixed with heroin and sold on the street (Goldstein et al., 2009). Cocaine hydrochloride compared to crack cocaine, is less potent and it is used as a local anaesthetic. Its use as anaesthetic first came about in 1884, after Niemann described its anaesthetic properties such as bitter taste and the resultant unusual numbness when applied to the tongue (Goldstein et al., 2009). By the late 1800s, when morphine was already used as a pain reliever, the use of cocaine for its analgesic properties which includes nerve blocking anaesthesia, epidural, and spinal anaesthesia has began to spread (Goldstein et al., 2009). Both cocaine hydrochloride and morphine are still used medically today as anaesthetic, despite their addictive properties. Cocaine hydrochloride is used as a vasoconstricting anaesthetic agent in surgery for ears, nose, and throat (White et al., 2003), while morphine is used as anaesthetic to relieve severe pain. Morphine acts through mu, kappa, and delta opioid receptor to block pain messages to the central and peripheral nervous system (Jul ien et al., 2008), However, morphine produces euphoria by interacting mainly with the mu opioid receptor (rosin et al., 2000). Aim: The aim of this project is to view the complex interaction between cocaine and cocaine receptors and the mechanisms of action of cocaine. Special emphasis will be placed on cocaine tolerance and addiction. To begin with, an overview will be provided on the pharmacokinetics of cocaine by discussing how it is absorbed, distributed, metabolised and excreted. Then, a discussion on how cocaine-induced changes in the peripheral and central nervous system contribute to the euphoric effect and addiction. Finally, an overview of how cocaine dependency could be treated. Pharmacokinetics of cocaine The effect of cocaine on the body depends heavily on the rate of accumulation and the concentration of cocaine at its site of action (the brain) and the duration of contact at these sites (Grilly, 1998). The pharmacokinetics of cocaine refers to its movement in the body with respect to its absorption, distribution, metabolism and excretion from the body and this is dependent on multiple factor such as, route of administration, genetics, and consumption of cocaine (Goldstein et al., 2009). Route of Administration/ Absorption As illustrated in figure two, cocaine is rapidly absorbed from the mucous membranes, the stomach and the lungs. Therefore, cocaine can be snorted, smoked, taken orally, or injected intravenously (Julien et al., 2008). However, the onset and duration of cocaine depends on the method of intake (Grilly, 2006). Cocaine hydrochloride poorly crosses the mucosal membranes when snorted, due to its vasoconstriction properties, thereby constricting blood vessels and limiting its own absorption. Because of the slow absorption of cocaine, its euphoric effect is prolonged when administered intranasally (Boghdadi et al., 1997). Cocaine can be also smoked in the form of crack. Because of its rapid absorption in the pulmonary vascular bed, crack produces an intense high in seconds, peaks at 5 minutes and persists for about 30 minutes. Intravenous injection of cocaine hydrochloride bypasses all the barriers to absorption, placing the total dose of drug immediately into the bloodstream. It produces euphoria in 30-45 seconds (Julien et al., 2008). Distribution After administration, cocaine rapidly penetrates the brain. Initial brain concentrations far exceed the concentration in plasma (Julien et al, 2008). After it penetrates the brain, cocaine is rapidly redistributed to other tissues such as the spleen, kidney, and lungs. Cocaine also binds to plasma protein, albumin and also to ÃŽÂ ±1-acid glycoprotein (Boghdadi et al., 1997). Metabolism Drugs taken orally initially pass through the liver (Figure 2), where they may be metabolised before entering the blood. Cocaine is metabolised primarily into ecgonine methyl ester and benzoylecgonine (Figure 3), the main urinary metabolite of cocaine and can be detected in urine for about 48 hours and up to 2 weeks in chronic users (Butttner et al., 2003). Cocaine is catalysed to ecgonine methyl ester by serum and liver cholinesterases, while benzoylecgonine is hydrolysed non-enzymaticaly (Carrera et al., 2004). Benzoylecgonine have vasoconstrictive properties, however it does not appear to cross the blood-brain barrier readily (Goldstein et al., 2009.). In addition, cocaine is demethylated to formed norcocaine (Figure 3) (Carrera et al., 2004), the only metabolite of cocaine that crosses the blood-brain barrier (Flowler et al., 2001). In the presence of ethanol, cocaine is metabolized to cocaethylene (Buttner et al, 2003). Cocaethylene is as active as cocaine in blocking the presynaptic dopamine reuptake transporter, thereby potentiating the euphoric effect of cocaine, increasing the risk of dual dependency and the severity of withdrawal with chronic patterns of use. This metabolite is more toxic than cocaine and aggravates cocaines toxicity. The half-life of cocaethylene is about 150 minutes, outlasting cocaine in the body (Julien et al., 2008). Even though cocaines plasma half-life is about 50 minutes, several metabolites can be detected by way of urinalysis for up to 2 to 5 days after cocaine overdose (Grilly, 2006). Mechanism of actions of cocaine Cocaines euphoric and reinforcing properties are the result of the obstruction of dopamine transporter (Butterner et al., 2003), thus, increasing dopamine level within the mesolimbic dopamine pathways. The mesolimbic dopamine pathways, shown in figure4, are composed of ventral tegmental area (VTA), the prefrontal cortex (PFC), Hipocampus, amygdale, and the nucleus accumbens (NAc) (Cornish and Kalivas, 2001) (figure 5). The nucleus accumbens (NAc) which consists of two sub-regions, the core and the shell, is believed to be the site for both the primary reinforcing properties of drugs of abuse and conditioned control over drug seeking (Kalivas, 2004). Normally, Dopamine is released into the synapse from an axon terminal in response to a pleasurable signal (Dackis and OBrien, 2001). Once this neurotransmitter is released, it diffuses across the synaptic cleft to bind to their respective receptors, D1 and D2 receptors (Howell* and Kimmel, 2008), which are linked to the cAMP second messengers system via membrane-bound G-proteins. D1family receptors (D1 and D5) are coupled to a stimulatory G-protein (Gs), which when activated increases the production of adenylate cyclase and cAMP and stimulation of the D2 family receptors (D2, D3, and D4) leads to the inhibition of adenylate cyclase through activation of an inhibitory G-protein (Gi/Go) (Cunningham and Kelley, 1993). Dopamine is taking back into the presynaptic neurons through the dopamine transporter, as a result shutting off the signal between neurons by preventing new dopamine to be formed (Howell* and Kimmel, 2008). Cocaine, on the other hand, blocks the dopamine transporter (figure 5), preventing the reuptake of dopamine into the presynaptic neurons of the VTA. Blockade of the transporter augment dopamine level in the synaptic clefts, producing continuous stimulation of dopamine receptors (Anderson and Pierce, 2005). Increasing dopamine concentration in the nucleus accumbens is responsible for the euphoric and reinforcing effects of cocaine. Behavioural sensitisation Repeated cocaine treatment increases dopamine levels in the synaptic cleft, which could lead to further stimulation of the dopamine receptors, causing more intense but shorter behavioural responses (Anderson and Pierce, 2005). This progressive change in behavioural response following repeated cocaine administration is known as behavioural sensitisation or reverse tolerance. The enduring neuronal adaptation in the reward circuit that occur after repeated cocaine administration is believed to be associated with motive and reward (Morgan and Roberts, 2004). The neuroadaptations that result in behavioural sensitization is characterised by two processes, known as initiation and expression (Anderson and Pierce, 2005). Initiation, which takes place in the VTA, is referred to as temporary cellular and molecular changes, such as alteration in various genes, second messenger cascades and receptors densities, which occur in response to psychostimulant administration, while expression is the lon g-lasting neuronal changes that start from the VTA and progress to the nucleus accumbens and striatum to increase behavioural response (Pierce and Kalivas, 1997). It has been reported that repeated cocaine treatment for two weeks increases the sensitivity of dopamine D1 receptors in the olfactory tubercle, nucleus accumbens, ventral pallidum, and substantia nigra and subsensitivity of D2 receptor (Unterwald et al., 1996). Activation of D1 receptors stimulates adenylyl cyclase activity via activation of Gs; increasing sensitivity of D1 and also increased adenylate cyclase and cyclic AMP-dependent protein Kinase (PKA) activity in the nucleus accumbens due to continual activation of Gs protein (Cunningham and Kelley, 1993). However, continuous cocaine treatment decreased D1-like receptor density and function, thereby initiated behavioural tolerance (Keys, and Ellison, 1994). Increased release of dopamine in the nucleus accumbens is also calcium-dependent and relies upon activation of calcium-dependent proteins, calmodulin and calcium-calmodulin kinase II (CaM-KII (Pierce and Kalivas, 1997). It is generally believed that increased calcium conductant and activation of calcium-dependent protein kinase are involved in the release of neurotransmitters in presynaptic nerve terminals and initiation of gene transcription (Evans and Zamponi, 2006). Therefore, continuous activation of calmodulin and CaM-KII by cocaine in the nucleus accumbens may mediate the release of dopamine or other neurotransmitters such as glutamate and GABA that are associated with expression of behavioural sensitisation (Pierce and Kalivas, 1997). D1 receptors located on GABA and glutamate afferents to the VTA are responsible for the release of these neurotransmitters in the nucleus accumbens when activated. Interaction between these neurotransmitters in the VTA changes the regulation of dopamine cell, which initiate long-term neuroadaptations (Cornish and Kalivas, 2001). Glutamatergic systems Excitatory amino acid such as glutamate acts as the main mediators of excitatory signals in the central nervous system (Baler and Volkow, 2006). Glutamate is known to produce its action through ionotropic (NMDA and non-NMDA) and metabotropic (mGluR) subclasses receptors (Danbolt, 1997). Although cocaine does not have a direct influence on brain glutamate systems, repeated exposure to cocaine results in alterations in glutaminergic transmission in the nucleus accumbens (Schmidt et al., 2005). However, the PFC, which transmits major glutaminergic projections to the nucleus accumbens (figure 4) has been most implicated in the regulation of dopamine released from dopamine cell terminals through NMDA and non-NMDA receptors (Kalivas, 1997). It is believed that stimulation of NMDA receptors through a voltage-dependent calcium channel initiate burst firing model in dopamine cells, as a result increasing accumbal dopamine release which is similar to what occurs in behavioural sensitisation (E vans and Zamponi, 2006). Administration of cocaine increases dopamine release presynaptically, which stimulates dopamine D1 receptors, located on descending glutamatergic afferent terminals from the prefrontal cortex (PFC). The D1 receptor in turn, stimulates the release of glutamate in the prefrontal cortex postsynaptic neuron. The released glutamate activates NMDA receptors on the dopaminergic dendrites in this brain area. This sequence of events is augmented by the fact that repeated cocaine administration desensitises dopamine D2 autoreceptors. Desensitisation of D2 receptor reduces the hyper-polarisation of dopamine cells, thereby allowing a further augmentation of dopamine release, which causes supersensitivity of D1 receptors, hence, increasing NMDA activity (Johnson and North, 1992). Because the neuronal circuits are interconnected (figure 5), a reduction in PFC dopamine transmission will activate the nucleus accumbens dopamine release, leading to expression of behavioural sensitisation. Increased glutamate release from the PFC to nucleus accumbens core is associated with cocaine-induced reinstatement and expression of locomotor sensitisation (Torregrossa and Kalivas, 2008). Both Glutamatergic and GABAergic neurons are also joined in the prefrontal cortex, indicating a possible interaction between glutamate and GABA. Therefore, the PFC GABA transmission may also be involved in the development of behavioural sensitisation (Giorgi et al., 2005). GABA systems It has been reported that cocaine sensitisation is linked with a cocaine-induced increased glutamate and GABA levels in the PFC. This was supported by Jayaram and Steketee (2005), who observed an increase in both glutamate and GABA concentration in the prefrontal cortex of animals withdrawn from repeated daily cocaine after the first week following repeated exposure to cocaine, but increase in these neurotransmitters were not observed after prolonged withdrawal. Furthermore, Jayaram and Steketee reported that the AMPA/KA receptor antagonist, (DNQX) prevent cocaine from increase the concentration of GABA in the prefrontal cortex in cocaine-sensitised animals. Therefore, increasing the response of GABAergic neurons in the PFC is a consequence of enhance glutamate level in prefrontal cortex. Because the AMPA/KA receptor antagonists seem to block cocaine from augmenting GABA levels, it can be concluded that glutamate acts mainly through AMPA/KA receptors to increase GABAergic activity in the prefrontal cortex. However, decrease in GABAÃŽÂ ² receptors function in the PFC is also associated with sensitisation of locomotors. It is believed that a loss in GABAÃŽÂ ² function in the prefrontal cortex would lead to a decrease in inhibitory modulation of excitatory pyramidal output neurons in the PFC (Badran et al., 1997), and therefore, a simultaneous increase in glutamatergic transmission in subcortical regions associated with the expression of behavioural sensitisation (McFarland et al., 2003). Glutamatergic, GABAergic and midbrain dopamine neurons are joined onto dendritic spines of medium spiny neurons that contain GABA, and endogenous opioid peptides. These opioid-containing neurons project directly to the substantia nigra and VTA to synapse on dopamine cells (Yung and Bolam, 2000). Therefore, alteration of endogenous opioid may participate in the development of drug abuse. Opioid systems It has been suggested that dopamine and opioid act together to modulate locomotion, mood and motivated behavioural, therefore, modification of the endogenous opioids participate in the development of drug of abuse. In addition the opioid system could also influence drug craving and relapse by altering stress physiology (Rosin et al. 2000). Apart from dopaminergic system, the endogenous opioid system is also a major player in addiction. Opioid system consists of three G-protein coupled receptors, termed mu (ÃŽÂ ¼), kappa (ÃŽÂ º), and delta (ÃŽÂ ´) opioid receptors. They act through G-protein second messenger systems (Go/Gi) to inhibit adenylate cyclase and cyclic AMP (Contet et al., 2004). Activation of these receptors on presynaptic axon terminals inhibits the Ca2+ influx that underlies release of neurotransmitters (Evans and Zamponi, 2006). At the postsynaptic membrane, their activation hyperpolarises the membranes by enhancing K+ flow out of neurons (Taddese et al., 1995) mu ( µ)-opioid receptor Mu ( µ) opioid receptors mediate positive reinforcement following direct morphine or indirect alcohol, cannabinoids and nicotine activation (Jullien et al, 2008). The positive reinforcing and euphoric effect of morphine involved dopaminergic as well as mu opioid receptors. Morphine activates ÃŽÂ ¼-opioid receptors through inhibitory Go/Gi protein, which decreases the level of adenylate cyclase and the cAMP pathways in the VTA (Contet et al, 2004). Because opioid and GABA containing-neurons also project in the VTA, activation of  µ receptor inhibits the release of GABA on dopamine, leading to high level of dopamine in the nucleus accumbens and other area. The increase in dopamine level in the nucleus accumbens leads to the positive reinforcement of opioid addiction (Bartoletti et al., 1999), which is also related to cocaine reinforcing effect (Julien et al., 2008). Stimulation of  µ opioid receptor in the VP is thought to promote motor activity, in part, by red ucing presynaptic release of GABA (Torregrossa and Kalivas, 2008). Repeated cocaine administration results in reduced extracellular GABA in the VP due to increasing stimulation of presynaptic  µ opioid receptors (Tang, et al. 2005). 2. K-opioid receptors ÃŽÅ ¡-opioid receptor system is essential in regulating presynaptic dopamine release and administration of dynorphin (DYN) within the nucleus accumbens (Shippenberg and Rea, 1997). DYN, endogenous ligand for the ÃŽÂ º-opioid receptor prevents the sensitisation that develops to locomotor stimulatory and conditioned reinforcing effect of cocaine. Anatomical studies have shown interaction between the mesolimbic dopamine neurons and neurons containing the opioid peptide dynorphin (Yung and Bolam, 2000. As mentioned above, dynorphin are found in dentritic spine of medium spiny neurons and project to the VTA and nucleus accumbens in which ÃŽÂ º-opioid receptors are expressed. However, the accumbens shell express high density of ÃŽÂ º-opioid receptors (Jayaram and Steketee,). Microdialysis studies have shown that the systemic administration of selective ÃŽÂ º-opioid receptor agonists such as U50488 and U69593 depress the firing rate of mesolimbic dopamine neurons and decreases dopamine overflow in the nucleus accumbens (Shippenberg and Rea, 1997). Therefore, activation of ÃŽÂ º-opioid receptor will inhibit dopamine release in the nucleus accumbens. However, Kuzmin et al., 1997 showed that acute administration of selective ÃŽÂ º-opioid receptor antagonist, nor-binaltorphimine increases dopamine overflow within the nucleus accumbens. In addition to these findings, it is believed that dopamine D1 or D2 receptor agonist, apomorphine, increases dynophin immunoreactivity and prodynorphin mRNA in the nucleus (Li et al., 1990). Therefore, repeated administration of cocaine increases prodynorphin mRNA in the nucleus accumbens and striatum. Taken in to account all these findings, and the role of ÃŽÂ º-opioid receptors in presynaptic modulation of dopamine release, it can be concluded that an increase in the extracellular level of dopamine within the nucleus accumbens results in a compensatory increase in the activity of dynorphinergic neurons. However, this increase is insufficient to prevent the development of behavioural sensitisation. Because many of the above intracellular adaptation involve changes in protein levels, it can be though that regulation of gene expression may be involved in the long-lasting effects of cocaine. Cocaine regulates gene expression It has been reported that one of the early molecular events following cocaine administration is the activation of nuclear protein (CREB) (Konradi et al., 1994). CREB control the changing that occur in synaptic neurons through modulation of the expression of several cAMP-inducible genes. CREB is regulated via phosphorylation at serine-133 (Konradi et al., 1994) The kinase inducible domain (KID) that contains serine-133 amino acid residue is phosphorylated by cAMP-dependent protein kinase A (PKA), and Ca2+/calmodulin-dependent protein kinases II and IV (CaMK II and IV) (Lonze and Ginty, 2002). Phosphorylation of CREB by PKA and CaMK II and IV results in the expression of immediate early genes (IEGs) including Fos and Jun, which are members of the transcription factor activator protein-1 (AP-1) family (Soderling, 1999). Acute cocaine administration activates DNA-binding activity of the AP-1 and expression c-Fos, FosB and JunB proteins (Hope et al., 1992). Chronic cocaine exposure is believed to reduce the capability of cocaine to express c-Fos, JunB and FosB proteins. This results in prolonged accumulation of à ¢Ã‹â€ Ã¢â‚¬  FosB proteins (a shorter splice-variant of FosB), which produces more persistent AP-1 complex (Hiroi et al., 1997). Prolonged accumulation of à ¢Ã‹â€ Ã¢â‚¬  FosB was reported in a variety of knockout and transgenic mice studies. Hiroi et al (1997) showed that mice lacking Fos-B and its shorter splice- variant à ¢Ã‹â€ Ã¢â‚¬  Fos-B had reduced AP-1 complexes following chronic cocaine exposure and increases cocaine-mediated hyper-locomotion and conditioned place (CPP) preference. They also observed that the long-term over expression of à ¢Ã‹â€ Ã¢â‚¬  Fos-B increases AP-1 complexes and behavioural sensitisation in both the nucleus accumbens and striatum. Increased neuronal expression of Fos in these regions after cocaine treatment is mediated by increasing D1 dopamine receptor activation, due to high level of extracellular dopamine. Desensitisation Chronic cocaine administration repeatedly stimulates dopamine receptors, as a result, decreases the concentration of dopamine within mesolimbic system and the remaining receptors become less sensitive to dopamine. Decrease in dopamine concentration leads to tolerance. This has been reported in several studies. For example, Maisonneuve et al (1995) observed a reduction in the basal dopamine concentration of rats nucleus accumbens when 10 or 15 mg/kg of cocaine was administered three times every day per hour for 13 days. Additionally, Inada et al (1992) showed that repeated cocaine administration in rats, reduced dopamine response to cocaine striatum 24 h after withdrawal. Decrease in dopaminergic level also leads to behavioural tolerance. Tolerance Tolerance refers to a decrease in response to cocaine due to repeated exposure of the drug (Maisonneuve et al., 1995). The major contributory factor to tolerance is the supersensitivity of D2-like autoreceptors as a result of D1 receptors desensitisation after chronic cocaine treatment (King et al., 1994). King et al showed that following chronic administration of 40 mg/kg of cocaine per day, for 7 days, increases sensitivity of D2-1ike receptors in the nucleus accumbens. Increasing D2 receptors leads to a transient decrease in the levels of GiÃŽÂ ± and GoÃŽÂ ± proteins linked to these receptors (King et al., 1994). Continuous cocaine administration produces tolerance to the inhibitory effects of cocaine on dopamine uptake in striatum and nucleus accumbens. Therefore, blockade of dopamine uptake by cocaine produces a compensatory increase of dopamine reuptake transporters (Letchworth et al, 2001). However, repeated cocaine treatment decreases the mRNA expression of dopamine transporter in the VTA neurons that project to the limbic brain regions during withdraw (Hammer et al., 1997). Polymorphism in the genes of dopamine transporter (DAT1) and receptors could be implicated in the genetic susceptibility to the complications of long-term development use in different individual (Wang et al., 2004). There are two main types of DAT1 genes, the SLC6A3 gene and the 3 untranslated VNTR polymorphism. The SLC6A3 is localised to chromosome 5p15.3 and genetic variation in SLC6A3 are thought to change the expression of DAT1 (Fuke et al., 2001). The variable number tandem repeat (VNTR) polymorphism in the 3untranslated region of DAT1 consists of a 40-bp repetitive sequence and can vary from 3 to 12 repeats. However the two most common alleles are the 9-repeat and the 10-repeat, and several studies have linked these polymorphisms to prolonged psychosis following stimulant withdrawal. Fuke et al (2001) reported that the 10-repeat allele (10R) enhances the expression of the DAT1 protein, while Michelhaugh et al (2001) claimed that the 9-repeat allele (9R) enhanced the DAT1 expression. However both studies found that the DAT1 VNTR is associated with drug addictions. The gene for D2 dopamine receptor (DRD2), TaqI A (rs1800497) is a single-nucleotide polymorphism (SNP) with two variant; A1, the less frequent allele, and A2, the commoner allele. Accumulative evidence from post-mortem brain samples using a [3H] binding ligand and in living subjects using positron emission tomography (PET) showed that the presence of the A1 allele leads to a decrease in D2 dopamine receptor density, as a consequence of chronic cocaine treatment (Thompson et al. 1997). Therefore, the DRD2 A1 allele is implicated in addictive behaviours. Several studies on different populations suggested that the involvement of TaqI A and VNT