Accounting and Finance

The Ascent on Money

Niall Ferguson the author of The Ascent of Money - a financial history of the world - was one of the few people to have predicted the present financial crisis we are all experiencing. So, this alone would earn him the right to be listened to, but the clarity of his views and his argument that a historical perspective might well have prevented us reaching the gloomy and some would argue potentially catastrophic situation we find ourselves in, makes what he has to say essential listening at this moment in time.

Here is an in-depth interview in which the British born Harvard Business School Professor
  • explains his evolutionary analogy for the development of finance in human history,
  • outlines the birth of financial tools such as insurance, stocks and bonds,
  • gives a clear easy to follow explanation of the property boom and bust that lies behind the present credit crunch, and
  • explains in stark detail the fragile economic interdependence between America and China, which he characterizes as "Chimerica"

- in short, well worth investing an hour of your time!


Ferguson has also presents a TV series based on his book which is currently being broadcast in the UK by Channel 4 and will reach the US in early 2009. They were on Google, but have been removed - sorry!


How to Survive (and Win) with Sarbanes-Oxley

In 2002, in the wake of the Enron and WorldCom scandals, the U.S. government passed the Sarbanes-Oxley Act, designed to hold public companies to far stricter accounting standards and act as a safeguard against corporate fraud. Among other things, it required independent auditing of a company’s finances. On the flip side, “Sarbox” also became a billing bonanza for auditors and an expensive headache for CFOs and CEOs.

But things have changed: In July 2007, the U.S. Securities and Exchange Commission relaxed Sarbox requirements. The new guidelines allow auditors to focus on areas of high financial risk, not every aspect of a company’s finances. In this article, you'll see you how to navigate the new regulations, choose an auditor, and use Sarbox to reduce redundancies and cut costs. The article “Four Reasons to Love Sarbox” will help reset your thinking about the law and how it can be a boon, not a boondoggle.

For more on the Sarbanes-Oxley Act and the Enron Scandal see the contributions by the following FOM - BAIM students:

Christina: Sarbanes-Oxley Act

Claudia: Sarbanes-Oxley Act

Marc: Enron




Debt threat

This podcast from the BBC's Documentary Archive radio programme tells the sub-prime story simply and examines how rapidly the shock wave of the credit crunch has spread and why it is now moving far beyond the sub-prime homeowners where it began?



For more on this topic see Aga Hampel's (BAIM Essen student) presentation. Read the summary and then scroll down to see the slideshow.


Mortgages: The Game is Up

Here's an article from The Economist suggested by Marc (Bertelsmann) that provides a little insight into the subprime crisis that affected economies around the world.



Financial jargon

Do you find financial jargon difficult to understand, or can you tell the difference between an SVR and an AVC? Here's a link to an online interactive quiz which should help with your financial English vocabulary. Try the quiz and then submit your answers. You then get a score, the possibility to see the answers and a link to an extensive glossary. Please post your comments (and scores if you like) using the discussion tab above. Here's a tip: Do the test again a week later and see if you can improve your score. This should help you remember any new vocabulary your learnt the first time.



Start-ups and Venture capital

On this page you'll find a video from BusinessWeek's videocast Entrepreneur's Notebook in which students from Columbia Business School compete for venture capital.



Saving and Investing

On this page you will find a video clips produced by the investment consultant Michael Fischer. A new video clip will be uploaded here on a regular basis for you to watch and comment on.


Balance sheets: the basics

A link to the UK Government website www.businesslink.gov.uk that provides information about the fundamentals of financial statements such as balance sheets. After reading the Introduction, click on the Balance sheet reporting - who, when and where? link in the side bar on the left to find out about the legal obligations concerning balance sheets. Then click on the Contents of the balance sheet link in the same side bar, and here you will find a breakdown of what is shown in a balance sheet. Finally, click on Interpreting balance sheet figures, again in the side bar on the left, for an expanation of what the various entries on a balance sheet mean.



Working with figures

Clearly, balance sheets and other financial statements comprise mainly of figures, both large and small. This link to linguarama.com takes you to a quick exercise on talking about figures.



Money

Try this money quiz from the UsingEnglish.com website.



Accounting: IFRS

This link (suggested by Anna Irrgang) takes us to a range of resources on the subject of International Financial Reporting Standards which can be found on the BNET website. This following link to the PriceWaterhouseCoopers site is to a downloadable guide for first time adopters of IFRS.



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