Sarbanes Oxley Act Of 2002 Accounting Essay

Sarbanes Oxley Act Of 2002 Accounting Essay The purpose of this report is to present the Sarbanes-Oxley Act, starting from the history of self-regulation and its regulatory bodies, presenting the governance scandals which triggered the Acts creation, emphasizing the requirements of Section 404 and concluding on recent crises. The history of self-regulation in the United States is structured in two parts: (1) Early Standards, including the Acts of 1933 and 1934, GAAS and GAAP, with short focus on peer review, and After seventy years of self-regulation many accounting frauds, governance scandals and bankruptcies shacked the U.S. market. Due to their relevance and impact on regulatory standards the cases of Enron and WorldCom were chosen to be discussed. After enacting the Sarbanes-Oxley Act of 2002, the U.S. Congress started a new era, by choosing to enforce a new independent body (PCAOB) to monitor the auditing companies. In relation with SOX the followings were considered: (1) SOXs summary, with its objectives and main sections, (2) Public Company Accounting Oversight Board (PCAOB), with its mission and enforced authority. Next, the analysis focused on the section 404 of SOX 2002 because is the provision which caused the most violent discussions from executives part. Due to the section impact on companies financial statements the report includes a short presentation of its rules with a larger analysis of implementation costs and benefits. Still, even if the SOX and the SEC regulated the market in order to protect the investors and to avoid future corporate frauds, the financial crisis revealed new scandals, out of which in this report are mentioned: (1) Bernard Madoffs Ponzi scheme, and (2) Bank of America Corporations lack of disclosure related to Merrill Lynch merger. Taking into consideration these scandals, changes of regulations must be considered for the future and, maybe, reconsiderations of auditors role as management strategic advisors. HISTORY OF SELF REGULATION IN USA I.1. Early Standards In the United States, at the beginning of the 20th century, the regulations for accounting and auditing were the same as United Kingdom regulations due to the fact that the major American corporations were branches of Britain companies (Benston G., et al., 2006). Still, the market experienced a low level of regulation (or almost absent), the succeeding events (stock market crash in 1929 and depression from 1930) indicating a strong need for regulating and disclosing policies to be established by the federal government. Securities Act of 1933 and Securities Exchange Act of 1934. The historical foundation for regulations of financial disclosure by corporations is considered to be the moment when, immediately after the market crash from 1929, the U.S. Congress enacted two major laws, the Securities Act of 1933 and the Securities Exchange Act of 1934. For the first time in history, those two rules contained pragmatic provisions regarding corporate investors and financial disclosure: Companies publicly offering securities for investment dollars must tell the public the truth about their businesses, the securities they are selling, and the risks involved in investing. People who sell and trade securities brokers, dealers, and exchanges must treat investors fairly and honestly, putting investors interests first.  [1]   GAAS. Starting with 1939, the first generally accepted auditing standards (GAAS) were drafted and adopted by the American Institute of Accountants (currently AICPA), through its Auditing Standard Executive Committee (AudSEC) (currently Auditing Standards Board). Because GAAS refers to risks assessment and ways to mitigate them, three areas of provisions were defined (Benston G., et al., 2006): (1) general standards for determining the auditors personal traits; (2) fieldwork standards for setting the audit analysis, evaluation of internal controls and audit evidences; (3) reporting standards for assessing the disclosures of financial statements and the audit opinions, respectively the application of GAAS to GAAP. GAAP. Starting with 1936-1938, the SEC entrusted the Committee on Accounting Procedure (part of AICPA) to issue a private-sector accounting standards in order to set-up an accounting system requested by the market needs. The first generally accepted accounting principles (GAAP) were developed in its initial form of Accounting Research Bulletins (ARB). Peer Review. In the early 1960s, the major consulting accounting companies started to form peer reviews for a better quality of accounting, auditing and attestation services performed by AICPA members  [2]  . This means that every CPA firm must be reviewed by another CPA firm. The latest company must independent from the reviewed company and must have qualified experience. The supervision of the peer review activities is assured by the Public Oversight Board (POB), an independent private sector body  [3]  , which, even if was created by SECPS members, is independent from the profession and the regulatory process. I.2. Regulatory Bodies Securities and Exchange Commission (SEC). The US Congress, through Securities Exchange Act of 1934, established SEC as an independent agency, having as main duty to define technical, trade, accounting, and other terms used in securities market, in the United States. The Commission is responsible for (1) interpreting federal securities laws; (2) issuing new rules and revising existing rules; (3) supervising the examination of securities players (brokers, investments advisers, other agencies); (4) monitoring private regulatory organizations in the securities area; and (5) complying U.S. securities rules with other American and foreign authorities  [4]  . Currently, the SEC is administrating the most important laws that standardize the securities industry, laws which are: (1) Securities Act of 1933, (2) Securities Exchange Act of 1934, (3) Trust Indenture Act of 1939, (4) Investment Company Act of 1940, (5) Investment Advisers Act of 1940, (6) Sarbanes-Oxley Act of 2002. The authoritative power of SEC implies laws enforcement in cases of fraud, insider trading, and any other infringements done by the individuals and companies on the securities area. American Institute of Certified Public Accountants (AICPA). If all preceding associations (like the American Association of Public Accountants, the Institute of Public Accountants, the American Institute of Accountants) are taken into consideration, than it can be stated that AICPA dates from 1887  [5]  . Associating all the certified public accountants (CPAs) in the U.S., the AICPA is the main non-government authoritative body in developing auditing standards (including technical rules and ethical codes) and other regulating services for CPAs. Furthermore, it has the authority to monitor and to enforce the law in cases of non-compliance with the standards. Auditing Standards Board (ASB). Within AICPA, the ASB is assigned to be the committee in charge to actually issue the standards and the regulations for CPAs, for non-public company audits, next to the necessary guidelines and the interpretations of the laws. Financial Accounting Standards Board (FASB). Over time, the mission to regulate the private sector by clear defined financial accounting standards passed from AICPAs Committee on Accounting Procedure to the Accounting Principles Board. By the end of 1960s the market development triggered an increasing demand for accounting standards updated in the same rhythm as the economical growth. As a result, since 1973, the Financial Accounting Standards Board has been created as a private, non-profit institution, founded with the purpose to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.  [6]   CORPORATE GOVERNANCE: FAMOUS SCANDALS In 2002, Ribstein L. argues in the Journal of Corporation Law that the traditional approach of corporate governance in large corporation must be established by government regulation. This approach is based on assumption that the shareholders, in order to protect their ownership goals, lack of tools to control the management actions. On the other hand, acknowledging the shareholders weakness, the managers are predisposed to take advantage of the situation by acting on their own personal interests and power. Companies financial statements are the mean through which the managers can show their contribution to the corporate overall growth. If in this judgment is included the fact that corporate management usually has had compensation formulae strongly related with companies financial performance (such as options on companys shares), the management tendency to manipulate companies financial statements becomes obvious, or, in other words, the management is highly interested to manage earnings (Kaplan R., 2004). After seventy years of corporate regulation, in 2001 and 2002 series of management frauds rocked the investors trust in the market. Scandals like Enron, WorldCom, Tyco, Adelphia, and Waste Management opened a new era of financial manipulation. What is essential to be mentioned is the fact that all these frauds were possible despite all the levels of supervision in place, such as executive directors, external auditors, accounting firms, debt rating agencies, or securities market analysts (Ribstein L., 2002). The most resonant scandal was Enron, which, after being one of the worlds biggest power dealers, revealed in October 2001 losses higher than $70 billion in equity value. WorldCom, which played an important role on telecommunication market, disclosed in March 2002 that its revenues are overstated by capitalizing expenses, losing $180 billion in shareholder equity. Both cases will be discussed in the following section, emphasizing on fraudulent operations and corporations weaknesses. II.1. Enron Short summary: Disclosure date October 2001 Charges False increased profits, hidden liabilities totaling over $1 billion by using off-the-books transactions. Manipulation of the Californian energy market during the electricity crisis, recording total profits of $2.7 billion from trading electricity and gas in western markets (Markham J., 2006). Extorting and gaming the power prices, as well as an overcharge of $175 million for electricity generated by Enron wind farms (Markham J., 2006). Securities fraud, wire fraud, money laundering, insider trading, and filing false income tax returns (for Enrons executives). Auditing firm Arthur Anderson With losses higher than $70 billion in equity value (Bryce R., 2002), Enron scandal is one of the biggest political scandals in American history. In 1985, Enron started its business as an important trader on U.S. energy market, developing its operations within: transactions with natural gas, constructions of power facilities and pipelines, telecommunications services, buying/selling commodities. Its rapid growth offered to the public media a sensation of unstoppable revenues and solid financial stability. Before the public disclosure from 2001, the revenues and the incomes reported by Enron were impressive (Markham J., 2006): in 1998 $31 billion in revenue and $703 million in net income after expenses; in 1999 $40 billion in revenue and $893 million in net income after expenses; in 2000 $100 billion in revenue and $979 million in net income after expenses. In fact, the revenues were not real, the financial image presented to the shareholders being an illusion. In order to hide its losses Enron stretched the limitations of accounting standards and took advantage of all the regulatory lacks. Due to its business specificity, the accounting recording was challenging. First aspect regarded the long-term contracts for which the current accounting rules obliged the company to forecast the future revenues. In this case Enrons income recognition was made at present (or fair) value, using mark-to-market accounting, regardless the prospective economic conditions. The second aspect was linked with Enrons reliance on structured financial transactions and, implicitly, on special purpose entities (SPEs). In this area the accounting standards were questionable, being debated by practitioners because of the difference which could be created between real economic situation and companies financial indicators. Behind this glowing image, Enron built a network of derivatives trading and transactions with SPEs, which generated substantial revenues not only for the company itself, but also for the companys directors involved in the SPEs partnerships. The report of investigation of the Enron Special Investigative Committee (Powers W., et al., 2002) mentioned the amounts by which Enrons employees were illicitly enriched: à ¢Ã¢â€š ¬Ã‚ ¦Fastow (i.e. Enrons CFO) by at least $30 million, Kopper (i.e. Enrons finance executive) by at least $10 millionà ¢Ã¢â€š ¬Ã‚ ¦. In October 2001 Enron had to recognize expenses of $1.01 billion after tax and two months later, Enron filed for bankruptcy. Enrons failure is a clear example of corporate governance malfunction. Managers were compensated with stock options based on the companys short-term performance with no other restrictions, compensation program that incentivized managers to increase the short-term performance regardless the long-term consequences. Next to Enrons management, part of the blame is assigned to external auditors (Arthur Andersen) and to parties responsible for the companys internal governance (see appendix 1 for a graphic representation of the links between Enrons managers and investors). Analyzing the implications of accounting rules over the Enrons scandal one statement must be made. U.S. GAAP are very extensive and, even more, rigid in its provisions, inspiring financial professionals to find creative accounting solutions to avoid the rules. II.2. WorldCom Short summary: Disclosure date March 2002 Charges Use of undisclosed and improper accounting that materially overstated its income before income taxes and minority interests by approximately $3.055 billion in 2001 and $797 million during the first quarter of 2002  [7]   WorldComs transfer of its costs to its capital accounts violated the established standards of generally accepted accounting principles  [8]  resulting in $3.8 billion fraud. WorldCom violated the anti-fraud and reporting provisions of the federal securities laws  [9]   WorldComs CEO Bernard Ebbers received from the company off-the-books loans of $408 million. Auditing firm Arthur Anderson In 1995 LDDC (Long Distance Discount Company) became WorldCom, one of the biggest telecommunication company on the U.S. market. Its CEO, Bernie Embers, joined the company in its early starts, in 1985. During his administration, the company experienced a period of high growth, with revenues reaching billions of dollars. In 1996, after the acquisition of MFS Communication Inc., WorldCom became the fourth biggest telecommunication company (Markham J., 2006), looking forward to using the opportunities offered by the new breakthrough innovations, such as fiber-optics and Internet. In October 1997 WorldCom announced the merger with MCI Communications for $30 billion. The company continued to grow, reporting earnings of $16 billion (Markham J., 2006) between 1996 and 2000, even if the SEC obstructed the company from considering deductible large amounts spend in research and development. In the early 2000, the entire telecommunication industry started to slow down, and, also, the stock prices were declining. The same happened in WorldComs case. By the middle of 2000, the stock price was almost half its 1999 price. Even so, WorldCom announced surprising profits (Markham J., 2006): $1.4 billion for 2001 and $130 million for the first quarter of 2002 (when in fact the company recorded losses). In March 2002, after an internal audit engagement, WorldCom announced the restatement of its financials figures due to inappropriate accounting recordings of the revenues between beginning of 2001 and first quarter of 2002, revenues which were not in compliance with GGAP provisions. In June 2002, the SEC charges WorldCom for $3.8 billion fraud  [10]  . As it was revealed by the SEC investigation, WorldCom used an accounting artifice to capitalize its line costs (e.g. fees paid by WorldCom to third party services providers) and, in this way, to keep companys earnings at expected levels. WorldCom filed for bankruptcy in July 2002, wiping out $180 billion in shareholder equity (Markham J., 2006). Ebbers was dismissed from the position of WorldComs CEO in April 2002  [11]  after admitting that he borrowed money from WorldCom in its attempt to cover his losses from buying WorldCom shares  [12]  . In 2005 Ebbers was sentenced to 25 years in jail. As presented by SECs WorldCom corporate monitor, Richard Breeden, in his report on the companys measures to restore its governance, WorldCom seemed to meet most of the governance standards of its time (Breeden R., 2003). The companys configuration included all the necessary structures required for corporate governance (such as audit committee, compensation committee etc.), with almost 80% of the directors fulfilling the independence requirements. But, in fact, most of these independents were very strong linked to Ebbers, through their incomes. So, corporate governance is not only accomplishing a checklist with requirements, but being deeply concerned about the independence impediments. In WorldComs case the management board failed to assess the companys risks and to draw corrective risk procedures. In Enrons case, the board allowed the CFO to participate in financial partnerships (e.g. SPEs), searching for his personal gain. In both cases, Enron and WorldCom, the CFOs failed to supply accurate financial data. Their fraud involvement was a real obstacle for which the problems were discovered too late. Hard interpretations of GAAPs provisions regarding net income and future earnings as well as unrealistic cash flow statements were present also in both companies. Furthermore, lacking of an appropriate internal control system, the adjustments in the companies financial reports were easy to be made by the high level employees. SARBANES-OXLEY ACT OF 2002 The scandals of accounting fraud, corporate misbehaviors, non-compliance with business ethics, and bankruptcies occurred in high-level companies like Enron and WorldCom revealed the markets strong need for deeper reforms in corporate regulations. In July 2002, the U.S. Congress ratified the Sarbanes-Oxley Act (known also as the Public Company Accounting Reform and Investors Protection Act of 2002) in response to the corporate crisis. One of the most important legislative action since the Acts of 1933 and 1934, Sarbanes-Oxley has as objectives to rebuild the investors trust in the market and to enhance the transparency and morality of public companies, avoiding future similar allegations. Through the Sarbanes-Oxley Act are addressed issues like managements legal liability, increased independence rules for internal governance agents, mandatory internal control audits, and increased managements responsibility for financial reporting. Furthermore, Sarbanes-Oxley increases the SECs power to determine that an individual is unfit to serve as an officer or director of a publicly-traded company, even in the absence of a judicial finding of a violation of the federal securities laws (Fisch J., 2004). Source: Anand S., 2007, Essentials of Sarbanes-Oxley, John Wiley Sons, Inc., ISBN 978-0-470-05668-4, page 23. Emphasizing on the importance of business codes of ethics, in 2003, Harvard Law Review explained the Acts provisions related to self-policing as a consequence of the general perception that these series of scandals and bankruptcies are not just a failure of the regulations, but a failure of management behavior. It was not enough anymore to just comply on formal managerial structure and independence requirements. Both, Enron and WorldCom had management boards that complied with independence standards, but were not able to work efficiently due to conflict of interests and strong relationships with CEOs. Furthermore, management boards must be deeply involved in companies business and must understand the risks, rather than simply remain independent (Fisch J., 2004). Enrons and WorldComs boards were far away from taking real actions against CEOs/CFOs practices or from reacting in real-time to companies difficulties. Considering the patterns of fraud cases and the fact that CEOs and CFOs acted as primary deceivers, the Sarbanes-Oxley Act states, as main provision, the necessity to increase top-managements responsibilities for the consistency of companies financial statements. IV.1. SOXs summary The Act requirements must be perceived by the companies as a starting point in building operational processes, with an enhanced internal control system through entire business. Complying with SOX is not a one-time project, but a continuous improvement process, with executives going beyond compliance and focusing on the quality of overall business operations (KPMG, 2004). Source: KPMG, 2004, Sarbanes-Oxley Section 404: An Overview of the PCAOBs Requirements, KPMG International Despite the fact that the Sarbanes-Oxley Act is structured in eleven different sections, the law itself must be understood as an overall, compact regulation, and companies must seek for complete compliance. Still, the Acts objectives are more obvious in certain sections, while other sections are important through their compliant difficulties (Anand S., 2007). The summary of the Acts titles is presented in appendix 2. Still, from the compliance point of view and relevance for the two fraud cases previously presented, the most important sections of the Act  [13]  are: Section 302 regarding the corporate responsibility for financial reports; In order to avoid deceiving financial statements Section 302 includes provisions related to internal controls and the management responsibility to evaluate the efficiency of these controls and to disclose any deficiency which might have a negative impact over the financial indicators. Section 401 for Disclosures in Periodic Reports; The financial statements must contain accurate information and must be issued to the public investors with a clear display in order to avoid any misrepresentation or incorrect statement. Also, the transactions, especially the liabilities, from off-balance sheet must be transparent and presented in the reporting file. Section 404 is related with the management mandatory evaluation and certification of companies internal control systems; This section raised many discussions, being one of the most controversial provisions of the Act. The main reason for these discussions was the character of this section which implies the highest amount of resources and efforts to be spend in order to obtain SOX compliance. As stated by Section 404, in annual financial statements, executive directors must declare their acknowledgement of the responsibility for establishing, implementing and maintaining the internal control system. The main purpose of this statement is to present the investors the internal controls structure and to assure them about its efficiency. Section 409 stating the necessity of real-time disclosures when important changes are made in companies financial indicators during the periods between quarterly reports. Without this section the investors would have to base their decisions on obsolete statements. Unlike Section 404, this section didnt implied heavy resource allocation. IV.2. Public Company Accounting Oversight Board (PCAOB) The Sarbanes-Oxley Act created the PCAOB, a private-sector, nonprofit corporation, having as mission to oversee the auditors of public companies in order to  protect investors and the public interest by promoting informative, fair, and independent audit reports  [14]   By creating the PCAOB, the self-regulating model of accounting industry was no longer valid, the responsibility and authority of creating standards and enforcing audits for public companies being transferred from the profession side (AICPA) to an independent party (PCAOB). Through its provisions, the Sarbanes-Oxley Act obliged, for the first time in regulating history, the auditors of public companies to be overseen by external and independent parties. The SEC maintained its authoritative power over the PCAOB, by naming the governing board and by amending the organizations bylaws, standards and budgets  [15]  . SECTION 404. MANAGEMENT ASSESSMENT OF INTERNAL CONTROLS V.1. Section 404 Rules As stated by the SOX Section 404, there are a set of rules for management to follow in assessing the internal controls structure within the company. The broad definition of the term internal control refers to all the areas within an organizations business, but inside SOXs terminology, the internal control term is used strictly for defining the internal control over financial reporting. First of all, the management is responsible for creating the internal controls structure, in accordance with his business processes. An important aspect must be clarified here. Neither internal auditors, nor external auditors are in charge with developing the internal control keys. The companys CEO and the top-management team must take this responsibility and act in accordance as a whole. Furthermore, it is not enough just to create the system, but to periodically update it in order to keep up with the business changing rhythm. The assessment of internal controls must be made with a recognized framework. In the U.S. most companies uses COSO framework (the Committee of Sponsoring Organizations of the Treadway Commission framework), or COBIT framework (the Control Objectives for Information and related Technology framework). (We will not discuss these frameworks in this report.) The internal controls assessment must be performed annually, at the year-end. The external audit company must not reassess the internal control system, but perform an audit in relation with the managements appraisal. In other words, the external audit must not redo the entire internal control structure assessment, but only to rely on the managements performance regarding the internal control appraisal. Even so, senior management must obtain the full confidence that its assessment presents a true landscape of the internal control system, as of the year-end, with comfortable assurance that any material misstatement can be avoided or identified (The Institute of Internal Auditors, 2008). V.2. Consequences of Implementing Section 404 Costs of implementing SOX 404. Generally speaking, the costs derived from internal controls implementation and testing can be easily identified as payments for audit and compliance employees, time spent by operational employees and external audit fees. Still, in the first year of compliance, overall efforts were overwhelming due to work amount needed to be done, work which included analyzing documentation, verifying accounts balances, monitoring and evaluating controls keys performance and efficiency, establishing reporting structure. One important reason for which compliance process was so complex was the fact that a major part of the control keys were done manually, with very much time-consuming, and only a small part of control keys were IT-based. Next to these costs, Langevoort D. (2006) mentions the opportunity costs and the distractions, referring to the fact that some audit tests require direct observation of operations (e.g. cash processing) and explanations from in-charge personnel or manager. He is going even further by stating that direct control can create discomfort to employees which will impact the sense of trust and decrease the employees loyalty. As mentioned before, the compliance with Section 404 turned out to be the most expensive part of the entire Sarbanes-Oxley Act. In August 2004, the Financial Executives Institute revealed a study of 224 companies which indicated costs up to $3 million for the biggest companies (Rittenberg L., Miller P., 2005). Even more, in an article from BusinessWeek, William Zollars, chairman and CEO of Yellow Roadway, the U.S. largest trucking firm, explained that his company paid about $9 million to accountants for their work, amount which represented 3% of annual profits for 2004  [16]  . After first year of SOX implementation, an analysis carried out by the PCAOB concluded that the costs for compliance were high because, in many cases, too many audit tests were performed and documented by auditors, companies spending too much time on internal controls related to financial reporting processes (OBrien P., 2006). Still, as presented in the left hand picture, in January 2005, according to a survey developed by the Institute of Internal Auditors, 72% of respondents considered that the costs are higher than the benefits for SOX 404 first year of implementation. After six years of SOX compliance, in August 2008, Dodwell W. argues, in an article in the CPA Journal, that initial implementation expenses made by companies are paying off. Next to the costs presented above, the cost-benefit analysis should also consider: concen

Painting a Portrait of Death Essay -- essays research papers fc

â€Å"Painting a Portrait of Death† Death is inevitable to all forms of life. In giving birth to a typical family, Flannery O’Connor immediately sets the tone for their deaths, in the story, A Good Man is Hard To Find. O'Connor’s play on words, symbolism and foreshadowing slowly paves the way for the family’s death.   Ã‚  Ã‚  Ã‚  Ã‚  O'Connor begins to paint the image of death with her presentation of the grandmother. As the family prepares for their adventure the grandmother carefully selects her attire. â€Å"A navy blue straw sailor hat with a bunch of white violets on the brim and a navy blue dress with a small white dot in the print. Her collars and cuffs were white organdy trimmed with lace and at her neckline she had pinned a purple spray of cloth violets containing a sachet† (O'Connor 267). The imagery of the grandmother’s impeccable attire foreshadows her position at the end of the story. When a person dies it is common that they are adorn in their best outfit. The grandmother has symbolically prepared herself for her eternal rest in a coffin as she is dressed in her Sunday best. O'Connor continues to incorporate the theme of death into the story, as she provides the readers with the reason for the grandmother’s ensemble, â€Å"in cares of an accident, anyone see ing her dead on the highway would know at once she was a lady† (O'Connor 267). Symbolically the grandmother is walking down the path of death.   Ã‚  Ã‚  Ã‚  Ã‚   As the family travels closer to...

Formal Essay in Human Relationships and Life Transitions Being an Adult Essay

Throughout this essay, I will be discussing the transition of adolescence. This transition is a stage of development between childhood and adulthood, from about 12 to 20 years of age. This transition from childhood to adulthood is smooth for some but rough for others(Caspi, 2000). This essay will discuss predictable and non-predictable elements of the transition. Health in adolescence issues this involves drugs & alcohol abuse and sexually transmitted infections (STIs) are classified as unpredictable elements. Physical Development (body growth and physical changes during adolescence) or Puberty and Cognitive Development are classified as a predictable element during the transition. It will also explore the impact on relationships and concepts of self for persons undertaking the transition. Furthermore, it will deliberate the contributions of contemporary and seminal authors to describe the differences between the two past and presents authors/researcher’s theories in understanding of the adolescence life transitions. Another factor that will be discussed is the concept of self during the transition, and then finally it will comprehensively explain the importance for nurses to understand the adolescence transition. A.The importance of predictable and unpredictable elements in Adolescence transitions will assist in identifying the significant changes in every life event transition. Moreover, it will also benefit in supporting adolescent to meet challenging changes throughout the transition. The first predictable element is puberty the biological transition of adolescence, the most noticeable sign of being an adolescent. Theoretically, puberty refers as a collective term to refer to all the physical changes that occur in the growing girl or boy as the individual passes from childhood into adulthood(Habermas & Bluck, 2000). In boys a major change is the increased production of testosterone, a male sex hormone, while girls experience increased production of the female hormone oestrogen(Dedovic, Wadiwalla, Engert, & Pruessner, 2009). In boys a major change is the increased production of testosterone, a male sex hormone, while girls experience increased production of the female hormone oestrogen (Carpentier & Fortenberry, 2010). Internally, through the development of main sexual characteristics, adolescents become capable of sexual reproduction. Externally, as secondary sexual characteristics appear, girls and boys begin to look like mature women and men. In boys primary and secondary sexual characteristics usually emerge in a predictable order, with the rapid growth of the testes and scrotum, accompanied by the appearance of pubic hair. In later years, it will begin the growth of facial and body hair, and a gradual lowering of the voice. Around mid-adolescence internal changes begin making a boy capable of producing and ejaculating sperm. In girls, sexual characteristics develop in a less regular sequence. Usually, the first sign of puberty is a slight elevation of the breasts, but sometimes this is preceded by the appearance of pubic hair. In teenage girls, internal sexual changes include maturation of the uterus, vagina, and other parts of the reproductive system. Menarche(Cochrane, 1993). Regular ovulation and the ability to carry a baby to full term usually follow menarche by several years. The second predictable element is Cognitive Development transition a second element of the passage through adolescence is a cognitive transition(Champion & Collins, 2010). Compared to children, adolescents think in ways that are more advanced, more efficient, and generally more complex. Adolescence individuals become better able than children to think about what is possible, instead of limiting their thought to what is real. Whereas children’s thinking is oriented to the here and now—that is, to things and events that they can observe directly, adolescents are able to consider what they observe against a backdrop of what is possible—they can think hypothetically. Second, during the passage into adolescence, individuals become better able to think about abstract ideas. This is clearly seen in the adolescent’s increased facility and interest in thinking about interpersonal relationships, politics, philosophy, religion, and morality—topics that involve such abstract concepts as friendship, faith, democracy, fairness, and honesty. Third, during adolescence individuals begins thinking more often about the process of thinking itself, or metacognition. As a result, adolescents may display increased introspection and self-consciousness. Although improvements in metacognitive abilities provide important intellectual advantages, one potentially negative by product of these advances is the tendency for adolescents to develop a sort of egocentrism, or intense preoccupation with the self. Acute adolescent egocentrism sometimes leads teenagers to believe that others are constantly watching and evaluating them, much as an audience glues its attention to an actor on a stage. Whereas children tend to think about things one aspect at a time, adolescents can see things through more complicated lenses. Adolescents describe themselves and others in more differentiated and complicated terms and find it easier to look at problems from multiple perspectives. The unpredictable elements are health related issues in adolescence are alcohol and other drug use. Experimentation with psychoactive substance is widespread during adolescence. Psychoactive substances are naturally occurring or artificial materials that act on the nervous system, altering perceptions, moods and behaviour. They range from naturally occurring substances, such as alcohol, which is produced from the fermentation of plant sugars by yeast, to designer drugs such as ecstasy. Most teenager experiment with different substances, constituting substance use and in some individual’s experimentation escalates into habitual or repeated usage known as substance abuse. They also engaged in â€Å"binge drinking† which arising in recent years. Binge drinking is defined as the consecutive ingestion of five or more standard drinks in less than two hours. Other factors of unpredictable health issues is sexually transmitted infections, adolescent sexual behaviour may impose a significant health risk to teenagers through a range of sexually transmitted infections (STIs). Sexually transmitted infections are bacterial and viral infections that enter the body via the mucous membranes of the mouth and the sex organs following physical contact. Sexually transmitted infection includes syphilis, gonorrhoea, genital lice, scabies, chlamydia, herpes, genital warts, hepatitis and HIV/AIDS. The reason for the high rates of STIs in adolescents is that this age group is more prone to sexual experimentation and risky sexual behaviours than other age groups. Risky sexual behaviour includes unprotected sexual activity without using barriers such as condoms, sexual activity involving multiple partners and sexual activity involving partners whose sexual is unknown. B. The impact on relationships and concepts of self for persons undertaking the transition is established by a personal identity a key task of adolescence is successful resolution of Erikson’s psychosocial crisis of identity versus role confusion. Identify formation involves selectively integrating some aspects of earlier childhood identity and discarding others. Successful resolution of the identity crisis of adolescence depends on the opportunities to experiment with different social roles and activities. Individual differences identify achievement are due to culture, gender roles , peer influences, parenting styles and life circumstances experienced by adolescents, which may increase or decrease opportunities for exploration. Self-concept is based on more abstract beliefs and values than the concrete and comparative ideas of self during childhood. Increased of perspective-taking ability may reveal ‘true’ and ‘false’ selves in relation to interactions with different people, but this can reflect positive experimentation with different roles that contribute to self-concept. Self-esteem decreases significantly between child self-concept and mid- adolescence, and more dramatically for girls than for boy s. The sex differences is probably anchored to sex-role differences, greater body image dissatisfaction in girls than in boys, and the differential boost to self-worth that romantic relationships bring to adolescent boys and girls. Parent –child relationships become less asymmetrical term s of the balance of power during adolescence compared with childhood, as a result of adolescent’s push for autonomy. There are wide individual differences in the degree of autonomy achieved by adolescents, depending on parenting styles and cultural and gender based norms and attitude. During adolesce, close same-sex cliques and larger, looser amalgamations of several cliques called crow. Cliques and crowds provide the backdrop for new cross-sex interaction, including romantic relationships. Peer group conformity within cliques seeks out different kinds of advice and support from both parents and peers, Nonetheless, for minority ineffective parenting and influenced with a wrong crowd will experience a criminal career, exacerbate the pre-existing interpersonal difficulties that predispose adolescent to violence and being a gang members in the society. Bullying is also common in the society especially teens in primary and high school, it can affect the psychosocial development of a person. Positive peer relationships include same-sex friendships that are high in intimacy and mutual support are both essential in bridging to a successful romantic relationships which may also begin during adolescence. During adolescence, most individuals experience their first sexual intercourse. The age when this occurs is becoming earlier, depending on gender, cultural constraints and peer influences. Sexual minority status –lesbians, gay or bisexual may pose additional challenges to identify formation and sexual maturation during adolescence. C.The contribution of past and present authors and researcher’s in understanding towards the adolescent life transitions has vast changes in time. According to Kohlberg’s theory (Benenson, Tennyson, & Wrangham, 2011) extended Piaget’s work on moral development during the 1960’s uses male protagonist only as an examples of his theories which contradicts Carol Gilligan’s author of her popular book , â€Å"In a Different Voice: Psychological Theory and Women’s Development† (1982), suggested that Kohlberg’s theories were biased against women, as only males were used in his studies. By listening to women’s experiences, Gilligan offered that a morality of care can serve in the place of the morality of justice and rights espoused by Kohlberg. In her view, the morality of caring and responsibility is premised in nonviolence, while the morality of justice and rights is based on equality. (Gilligan, 1982). CONCLUSION As we discussed the main points of being adolescence it embodies the importance, relevance and impact of a particular life event transition. Adolescence is a distinct stage that marks the transition between childhood and adulthood. Adolescents are capable of abstract reasoning. Although you may still include the family in education, adolescents themselves are a major focus of teaching since they have considerable independence and are, consequently, in more control of the degree to which recommendations will be carried out. Adolescents have many important developmental tasks to achieve. They are in the process of forming their own identity, separating themselves from parents, and adapting to rapidly changing bodies. Bodily changes at puberty may cause a strong interest in bodily functions and appearance. Sexual adjustment and a strong desire to express sexual urges become important. Adolescents may have difficulty imagining that they can become sick or injured. This may contribute to accidents due to risk taking or poor compliance in following medical recommendations. Because adolescents have a strong natural preoccupation with appearance and have a high need for peer support and acceptance, health recommendations that they view as interfering with their concept of themselves as independent beings may be less likely to be followed. Therefore, as sexual adjustment and strong sexual urges characterize this age, the nurse may do significant teaching about sex education and contraception. In addition to teaching adolescents about why and how their bodies are changing, the nurse is also in a good position to dispel misconceptions young patients may have about sexual development or sexual behaviour. Teaching adolescents about sexuality requires a special sensitivity and understanding. Respect for the patient’s modesty, privacy, and opinions are critical to establishing an atmosphere of openness and trust. In addition to sex education, other important patient teaching areas are alcohol and drug abuse and general health measures, such as the importance of good nutrition and exercise as the basis for life-long health. Regardless of the topic, health education for adolescents is more effective when the nurse establishes trust by respecting the adolescent’s needs, shows empathetic understanding, and answers questions honestly. Patient teaching for adolescents should take the form of guidance rather than lecturing. Nurses who gain credibility with an adolescent patient establish themselves as the teen-ager’s advocate rather than representatives of the parents. The nurse may increase health teaching effectiveness by including the family. The nurse can give guidance and support to family members that can help them understand and respect adolescent behaviour. Parents should be encouraged to set realistic limits for adolescents while still allowing them to become increasingly responsible for their own health care management.

The Theory Of Human Resource Management - 2171 Words

In the age of Globalization, the Human Resources Professional must remain relevant by adopting the commitment to life-long learning to in order to keep the organization vehement. Throughout known history, human resource professionals have played a key role at almost every level. In the ancient world, much like today, military commanders needed to know who in their ranks where capable of accomplishing what tasks. Soldiers fought on the frontlines, clerks maintained records of victories, and everyone collected supplies along the way. As conquerors took new lands, their armies grew and needed administrative support. The conqueror needed the ability to keep track of his strength, enlist new soldiers, and hire new commanders (History of Human Resources Management, 2016). Enter the Human Resources Professional who managed pay and tracked the number of soldiers available for a campaign. Without these two critical tasks, commanders would face mutiny and ultimately defeat on the battl efield. Some of the earliest challenges to the HR professionals’ relevancy dates back to the period of early Islamic expansionism. Administrative papyri documents dating as far back as the 7th century AD were found along the current north eastern Egyptian border (Legendre, 2015). This is also one of the earliest recorded challenges to the HR professional as all of these administrative documents were transcribed in three languages. Coptic was the most common language of the region and was usedShow MoreRelatedThe Theory Of Human Resource Management2090 Words   |  9 Pagespractitioner Firstly, I would like to define the concept of Human Resource Management. â€Å"This term is not easy to define because it is commonly used in two different ways. 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