Auditing Essay Example | Topics and Well Written Essays - 2000 words - 2

Auditing - Essay Example The Big 4 dominate the auditing industry to such an extent that policy makers are worried about the effects of a possible reduction in their number. Questions such as pricing power, bargaining power, quality of audits, the independence of audited financial reports and other matters that usually attend to an oligopoly has bedevilled government regulators and industry experts alike. This paper looks at some of the outstanding issues facing an industry with few market players, especially on the possible scenarios when any of the Big 4 exits the market altogether for whatever reason. The Big 4 auditing and accounting firms, together with professional and accountancy organizations, are actively promoting positive reforms in both their accounting and reporting standards to improve credibility and confidence in audited financial reports. At present, these big four comprise an oligopoly that dictated prices for their services. In classical economic theory, this is an imperfect competition where a few sellers can manipulate prices if they want to. Economists call it as the concentration ratio or C4 in which the four biggest firms control more than 60% of an industry similar to aircraft manufacturing and telecommunications. In fact, a report by the General Accounting Office (GAO) of the US (renamed now to General Accountability Office in 2004) indicated concentration to be higher, approximately 78% of all the publicly-listed companies that constituted 99% of all public company sales (Bloom & Schrim 2005) and has serious implications with regards to the risks for collusion. The GAO report was commissioned in response to the passage of the Sarbanes-Oxley Act the previous year and also due to concerns about the effects of audit mergers and consolidation on competition, cost, quality, pricing and the cherished principles of auditor independence. Due to the few market players in an oligopoly, the action of one market participant tends to be known by

Formal and Informal Testing Research Paper Example | Topics and Well Written Essays - 750 words

Formal and Informal Testing - Research Paper Example Let us discuss some formal and informal assessment techniques in order to know how they can help teachers assess the learning level of their students. Formal Assessment Techniques Weaver (n.d.) states, â€Å"Formal assessments have data which support the conclusions made from the test†. Such assessments provide ways to the teachers to assess their students’ performance using standardized measures. Two of the widely used formal assessment techniques include non-referenced tests and criterion referenced tests. Non-Referenced Tests Using norm-referenced tests, teachers compare performance of each student to a large number of other students. Teachers prepare one test for all students to compare the performance of each student with the performances of other students. Such tests make teachers know which students is the best performer among all other students. Another advantage is increase in the level of motivation for the students. Such tests provide motivation and appreciat ion to the best performer. When a student is told that his/her performance is the best in the class, it increases motivation of the student. Along with advantages, there also exist a couple disadvantages of using non-referenced tests. First one of those disadvantages is that scores do not show actual knowledge of the students, which students of a specific grade level must possess, rather they show the performance in relation to the individual performances of other students. Moreover, the goal of excellence in class performance cannot be achieved because there is no standard criterion set for exams. Teachers measure performances of students against each other instead of a specific criterion, which does not reflect actual learning of the students. Criterion Referenced Tests In these types of tests, performance of the students is compared to a standard criterion set by the teachers instead of comparing with other students. Such tests provide accurate assessment to the teachers. These t ests help teachers know whether there students have acquired the required amount of knowledge or they need to improve their learning skills. The results of such tests reflect actual skills of students instead of reflecting individual edge of students over other students. If a student meets the set criterion, it means that he/she is learning well in the classroom. Some of the concerns regarding use of these tests for assessment include criterion validity and individual rankings. For these tests, a proper criterion needs to be set. Sometimes teachers set improper criterion that does not properly measure what it should actually measure. Moreover, students like to know their individual rankings but in these tests, they cannot know it because their performances are not compared with others. Informal Assessment Techniques In informal assessment, teachers use multiple ways to assess students’ performance. Sawetch (2009) states, â€Å"An informal assessment can compromise of almost any teaching in the classroom that an individual student has to participate in†. Some of the widely used informal assessment techniques include checklists and oral interviews. Let us discuss both of these methods in some detail. Checklists A checklist is a list of skills, knowledge, and other qualities that teacher creates to know whether their students possess those qualities or not. If a student is short of any specific quality, the teacher can work to improve that quality of the student. Checklist method is not a very time consuming one. A teacher can