Spare the Rod and Spoil the Child

I was really enjoying service last Sunday, because my pastor I must admit is good at what he was called to do- crack jokes and preach the word of God. He shared a story about his childhood during service and that gave me the inspiration for this write up.A young pastor Tunde (not real name) apparently set out to grind pepper for his mum, so that dinner could be made without hassle. And so Tunde went to the grind-man’s house and got the pepper well grounded, but instead of going back home decided to play â€Å"one-set† of football. â€Å"One set† led to â€Å"two sets† and more and Tunde was running late for dinner preparations, but at least he had grounded the pepper.Done with football practice and catching up with friends Tunde was on his way out of the sandy football pitch when a more excited friend on the football pitch decided to smash one last shot at goal, but missed by a long mile and caught Tunde’s hand and the grounded pepper spilled on the sand. Afraid and panicking, Tunde managed to get a hold of himself and packed whatever spilled on the sand, alongside the sand and put it all back in the bag and ran straight home with the ‘perfect excuse’.Tunde’s mum asked in earnest what kept him so long, and Tunde said he had to wait in line for his turn. Tunde’s mother refused to dwell on that and collected the (sandy) pepper from his hand and went back into the kitchen. It was there she saw a rather new mixture of grounded pepper and sand (delicious) and required from Tunde as to what came about this combination. Already a successful liar once, Tunde brought out another great line when he said the grinds-man, on putting the pepper inside the machine brought out this mixture and he had no choice but to take what the machine had given to him.Cutting the story short, now born-again Pastor Tunde revealed that he still vividly remembers the slap that was dished out to him when he was done with his ridicul ous response. It was in line of that story that Pastor Tunde revealed a bible passage (Proverbs 22 vs. 15) to back his claim that a child must be disciplined, to set his ways straight.While the church burst out in laughter, I was taking notes. I took notes because I was never beaten as a child by my parents, but at school I got my share and for emphasis sake I am not against it. I just find the topic fascinating anytime it comes up that you must be disciplined by the rod, else you grow up wayward. That assertion does not sit very well with me and so I decided to express myself in my own words. I believe it is the call of a parent to discipline their child however they feel is right, as long as it is done with a high level of tolerance.I definitely agree that a parent reserves the right to spank their child to reality should he default as truth be told, growing kids are the most manipulative people you can ever come across. From the trickery in their moves when they’ve just st olen a bar of chocolate, to the animated tears that form up immediately they have been caught, parents must face the facts that children are indeed manipulative.What then leads the best way to discipline? I grew up knowing that charity began from our home but even then it took a few strokes on my behind in school to correct some of my errors that could not be detected at home. My understanding of that phrase is that whatever basic values you might need as a child, including discipline, you must first get that experience at home. Not being a parent puts me at a slight disadvantage to this debate, but I have watched my little cousins and nieces and nephews grow and I do understand why this needs to be addressed by public opinion. Therein lies the argument, to beat or not to beat.

Immigration in the 1920’s

The way people were treated in the early 1920s would be considered outrageous today, but the discrimination has not come to a hault just yet. After carrying on for years, immigration laws are still being established today. Immigration has had a huge impact on modern day America because it created the quota laws, which have successfully helped the immigrants find their place in this society today, and discrimination has decreased dramatically, but has not concealed itself from this problem completely. The immigrants wanting to come to our country saw our world as a new start or even a new life for them, that’s when 1920s they decided to take immigration laws to the extreme to keep the massive flow of people out, â€Å"In 1919 a bill was introduced to suspend all immigration entirely while congress worked out a permanent plan for a more tightly restrictive policy† (Wepman 242). Although this law was only temporary, just shortly after more things started changing, â€Å"Signed by President Harding on May 19, 1921 called ‘the most important turning-point in American immigration history. An act to limit the immigration of aliens into the United States. † (Wepman 242). The limiting of the immigrants into the United States wasn’t the worst part, â€Å"One of the most painful results of the new quota restrictions was that they made no distinctions for personal relationships and often seperated families. †(Wepman 244). With of the family troubles that the immigrants had to deal with, â€Å"After the civil war the former slaves began to drift away from the rural south, where more than 90 percent of the black population of the United States had lived in antebellum era. †(Archdeacon 131).Even though right before World War I started, â€Å"Immigration dropped to new lows. During the 1930’s the annual quota was never completely filled, the total numbering less than 100,000 a year, and many emigrated out of the country. †(Daniels 247). With all these quota laws and such, that didn’t stop the discrimination from occurring. Many things with discrimination and the process of going through Ellis Island changed a lot over the 1920s. After World War I the immigration level reached an all time high after the lull during the war. â€Å"The Immigration Act of 1924 created a permanent quota system (that of 1921 was only temporary), educing the 1921 annual quota from 358,000 to 164,000. † (Wepman 243). Eventually they negotiated enough and got the number of immigrants down to 154,000.The whole point of the quota acts was to maintain the â€Å"character† of the United States. Although President Johnson wanted to eliminate all immigration not everyone did, â€Å"The unions, which had approved Johnson’s idea of banning all immigration, accepted it as a good compromise, and the New York Daily news applauded it for its protection of American job market from a flood of aliens willing to work for low wages. (Wepman 242). Now, as we are in the 21st century, and the economy at one of its lowest points, the immigrants of the world today are lucky to get a job with a minimum wage pay or even a job because of their race. After all these new laws were set, they had to have some kind of protection to keep the immigrants out, that is when they created Border Patrol. There was an over flow of laborers coming from the South which resulted in the establishment of U. S. Border Patrol on May 8, 1924.The Border Patrol consisted of over 450 officers; â€Å"Their main job was to ride the Mexican border on horseback seeking out smugglers and the hiding places of illegal aliens. †(Tischauser 100). Not only did they create the Border Patrol, they mad a ten-dollar visa fee with an additional six-dollar head tax for each applicant trying to get through. That new rule alone limited down the number of people to cross the border because only very few Mexicans made enough money to pay that fee. â€Å"During the first three years of operation, the Border Patrol turned back an annual average of fifteen thousand Mexicans seeking illegal entry. †(Tischauser 100).These numbers looked great for congress but the number of illegal immigrants started to become outrageously large, â€Å"Because of such fears, Congress, in 1929, voted to double the size of the Border Patrol and demanded a crackdown on illegal entry, and increased Border security. †(Tischauser 101). Although the 1920s was filled with glamour, there were other sides to this nation with horrible discrimination and racial issues. The Ku Klux Klan was a racist group of people that would do anything and go to any extreme to get the racial segregation they wanted and the white supremacy.There are over 40 different Klan groups that have previously xisted, â€Å"At first, the Ku Klux Klan focused its anger and violence on African-Americans, on white Americans who stood up for them, and against the federal government which supported their rights. Subsequent incarnations of the Klan, which typically emerged in times of rapid social change, added more categories to its enemies list, including Jews, Catholics, homosexuals, and different groups of immigrants. † (Anti-Defamation League). Throughout the years, the Klan had reached over four million members and just as they hit their peak, until people started realizing how racially absurd this group of Klansmen really was.Not shortly after that the Klan had split at the Democratic presidential convention and the public did not heed this very well, â€Å"by the end of the 20's, a power struggle among the top positions of the Klan caused the group to split. The Klan quickly fizzled out with the conviction of the head of the Indiana Klan. Only a handful of Klansmen was the remainder of the millions that so previously had approved of the Klan's violent acts† (Keeney). After all was said and done, the simplest way to put the KKK was, â€Å"they became champions of vigilante justice against bootleggers, wife-beaters, and adulters. (Keeney). Although the Klu Klux Klan â€Å"saw themselves as protecting the American family† (Kenney 1), many of the quota laws would set immigration up to fail. In our society today, we could have possibly reached an all time low in racism. In the state of Arizona, the governor has now passed a very sketchy law, â€Å"It requires police officers, â€Å"when practicable,† to detain people they reasonably suspect are in the country without authorization and to verify their status with federal officials, unless doing so would hinder an investigation or emergency medical treatment. †(New York Times). Having the discrimination back in the 1920s has carried on throughout the years, to the point where if a person walking down the street looks slightly Hispanic, police can demand to see documents that prove you are a citizen of this country that we live in. Immigrants’ back then thought they had it bad, the United States now bring all that racial hate back. . Immigration has had a huge impact on modern day America by setting the quota laws, the immigration acts, creating Border Patrol, and by trying to help people realize that even though you are from a different racial descent, you are still just as important as anyone else. Even though people may look at those of different ethnicities as less capable to do your job, they are actually the ones that are doing all the dirty work that we don’t want to do, so in the long run, we should be thanking them. Although Arizona has brought about the discrimination again, mostly throughout the United States people keep their hateful comments to themselves, and you don’t really find many gang members out there anymore, but everyone walking down the street should watch their back because you never know what’s coming for you. Works CitedArchdeacon, Thomas J. Becoming American. New York: The Free Press, 1983Daniels, Roger. Coming to America. New York: HarperCollins Publishers, 1990Wepman, Dennis. Immigration: From the founding of Virginia to the closing of Ellis Island. New York: Facts on File Inc. , 2002Strelssguth, Thomas. The Roaring Twenties. New York: Facts on File Inc. , 2001â€Å"Racism in the 1920s: The rise of the KKK and anti-immigration. † Kim Kenney. 15 January 2009, 2 May 2010. http://americanhistory. suite101. com/article. cfm/racism_in_the_1920sâ€Å"Racial and Ethnic Discrimination† 2 May 2010. http://law. jrank. org/pages/9625/Racial-Ethnic-Discrimination. html

How to Analyze That Problem.

Case 02: How to Analyze That Problem? 1. What Is your decision? I have formulated the following decisions after delightfulness all the relevant facts revealed with the help of the Scheduling Supervisor, Joyce Lane, during the said meeting: * For the succeeding operations, the production department must stick to the steel which contains the old formula of alloy since the one with the new formula of alloy has an effect on the Panther panels, thus, making them burred.The objectives of the company about the welfare of its employees must be cleared to them so that they may be encouraged to work harder and stop from doubting the intentions of the company, thus, learn to trust the company's interests. * The issue between Farrell and Valentine must be put to an end to prevent such from leading into a more serious problem. Farrell must be reprimanded for not informing Cogging first about his concerns before suspending Valentine. Also, Valentine must be ordered to come jack to work since there Is no proof about him being accused of drinking on the Job, In the first place. . Who will Implement your decision? The shift to the steel which contains the old formula of alloy and the outsourcing of products will be implemented by Robert Polk as the Production Chief and Ben Peters as the Quality Control Manager together with the men in the lines where Panther panels are being produced. * The gathering of employees and resolution of the conflict involving Farrell and Valentine will be headed by Cogging, the Industrial Relations Manager. 3. What measures will you put in place so that the problem will not recur?The Internal control of the company regarding the purchase of raw materials Is poor. If new materials will be employed In the future, there must be tests or examinations to be performed first to know the changes that may occur as well as materials. * A system of quality control which pertains to policies and procedures to be taken into consideration by each and everyone comp osing the whole entity must be established and highlighted, especially such policies and procedures which focus on ethical requirements, to prevent future conflicts between them.

WE 7 CRJ 546 Essay Example | Topics and Well Written Essays - 500 words

WE 7 CRJ 546 - Essay Example hin the reach of criminals with ill intentions, and that the institutions charged with public security must modernize their capabilities to ensure that they are equal to the task. As rightly noted by Costa in his very able analysis, the question as to whether autopsies are part of public records or are confidential medical records bear heavy balancing, with the interests of the victim and the family and the public’s right to know the truth pulling in very opposite direction. The fact of the matter is there isn’t affirmative answer on both ends, for the press are but fact-checkers and verifiers to governmental action, and thus deserves access. Even so, there remains the catch of gruesome photos getting into the wrong hands, and that right to privacy may well serve as the best decisional choice. Either way, there is a loss. However, the wishes of the victim and the immediate family override that of public, must always take precedence in decisional choices. To begin with, even the very fundamental laws of the land, The Bill of Rights, have limits, and the confidentiality of autopsy photos should not be any different. That while the interest of both parties at stake should respected as per the law, the law is but a standard double edged sword and thus should be able to be seen at work in justice delivery. That while the public’s right to know is indeed fundamental, the ultimate decision to make autopsy photos public is in itself a private choice protected under the same laws. Accordingly, not every photo has to be public. Like it was in the last decade, however, privacy remains critical even in the age of expansive technology irrespective of high the profile of a case is contrary to Chelsea’s assertions. As Jenifer rightly notes, autopsy photographs are best utilized in courtrooms to prove or disprove arguments on both sides of the divide. Irrespective of how they are used, Judges have a solemn duty to deliver justice, and such lies, albeit in part, in the

Write about the role of a social worker in corrections Research Paper

Write about the role of a social worker in corrections - Research Paper Example Similarly, probation or parole officers from social workers are better equipped to deal with correctional population. The services of social workers are essential not only in corrections but also in the rehabilitation of released prisoners. Consequently, there is a great demand for trained social workers â€Å"who have knowledge, skills, values, and motivation to work with correctional clients† (Correctional counselors: roles, work environments, conflicts, and challenges, n.d). As part of their correctional roles, social workers need to interact with the family members, community, staff in the correctional facilities, and other social service agencies for the well-being of their clients. Social workers in corrections play a number of roles including counselors, mediators, psychologists, coordinators, advocates, evaluators, and persuaders. Besides, they need to quip themselves with the specialized knowledge and specific skills required for a correctional social worker. However, there is a shortage of correctional social workers in the judicial system of many nations due to their increased demand. This paper seeks to explore the different roles and interventions undertaken by social workers in various correctional settings. It is worthwhile to understand the meaning and depth of correction with regard to social work practice. Kumar and Devasia (2009, p. 229), in this regard, view correction as part of social control-â€Å"a social process by which modern society deals with officially identified lawbreakers.† The ultimate aim of correction is to identify and prevent delinquent or criminal behavior of the offending population. Correction by social workers is possible in the case of all types of offenders. However, offenders who are placed on probation and parole are more likely to benefit from correctional social work. Social workers who

Development Appraisal, Project Cost Control Assignment

Development Appraisal, Project Cost Control - Assignment Example The building and construction sector includes contractors who build buildings for residential, industrial and commercial purposes. SECTION-A Question 1 This is a case whereby companies operating in the construction industry need to develop, differentiate,  defend and communicate the development  contribution  they  make to their host country   in just the same way as they manage the value they delivered to customers. Taking a case of buildings:   There are various aspects that defines these statement ‘‘Development value’’ in a more scientific way. ... 2. Four methods of valuation and their illustration using appropriate examples These methods include; DCF valuation LBO valuation Comparable companies’ valuation Precedent transaction valuation A DCF (Discounted cash flow) valuation is a valuation method where future cash flows are discounted to present value. The valuation approach is widely used within the investment banking and private equity industry. In a DCF valuation, one has tom obtain data which includes; historical financial information, working capital, make future projections and calculate unlevered cash free flow, determine capital structure, WACC, present value of free cash flow, enterprise value and finally come up with a DCF sensitivity analysis which now shows the valuation changes with different assumptions and changes in input (Notman, 1998). A LBO (Leveraged Buyout Analysis), valuation is the acquisition of another company using a significant amount  of borrowed money (bonds or loans) to meet the cost of an acquisition. It is used to determine an implied valuation range for a given target in a potential LBO sale based on achieving acceptable returns (O'Sullivan & Sheffrin, 2003). In this kind of valuation the following is taken into account; deal value, historical financials, forecast period, results and output. A comparable company’s analysis is always used in company valuations and is a relative valuation method (Notman, 1998). The method indicates the value of similar companies in relation to different key ratios that is later compared to your business. Common key ratios are: EV/EBITDA and EV/SALES. For this to be successful, one needs to select the multiples of companies, locate the necessary financial information, and spread key statistics ratios and trading multiples benchmark

Ask the Author Essay Example | Topics and Well Written Essays - 250 words

Ask the Author - Essay Example They are short and direct sentences. They help to bring out the idea that you are not embarrassed to have a dollhouse in your living room. It sets the stage for the rest of the essay as you embark on recreating your childhood memories and synchronizing them with your current life as you rebuild the dollhouse. The choice of gender and the names for your dolls also aid in understanding the nostalgic tone you employ in the essay. You also employ figurative language and imagery to convey your theme of nostalgia to the audience. For example in the fifth paragraph, you use a simile when emphasizing the need for using scale to make everything in a dollhouse. The audience gets to understand that lack of paying attention to scale in a dollhouse will make it look crazy like an Alice in wonderland hallucination (Haegele). Your description of remodeling the dollhouse is also vivid and the reader can create mental pictures throughout the essay and see you rework the dollhouse. The use of figurati ve language and imagery helps bring out the nostalgic

Finance and Accounting Assignment Math Problem Example | Topics and Well Written Essays - 750 words

Finance and Accounting Assignment - Math Problem Example Since in this case, the payment is done at the beginning of the period every time, hence it is a case of an immediate annuity as each yearly payment is allowable to compound for an additional year as compared to the normal annuity case. In this context, Future Value of Annuity = A [{(1+i) ^n -1} / i] (Finance Formulas., n.d.) Where, A= Annual payment, i= interest rate per year, n= number of periods As in this case, each annual payment is completed at the start of each period, the same is allowed to compound for one extra period and hence its future value would be the product of value of a matching normal annuity and (1+ interest rate). Future Value of Annuity Due = (1+i) * A [{(1+i)^n -1} / i ] (Finance Formulas., n.d.) The 65th birthday is the day the person wants to have $2 million in the savings account. It should also be kept in mind that a payment is made even on the last day i.e. on the 65th birthday. This last payment does not get a chance to be compounded and has to be simply added to the compounded value of the earlier made 35 payments. In the Future Value of Annuity Due formulae, it has to be noted that the last cash payment is made one year prior to the end of the 35th year. Keeping in mind that a payment will be made even on the last day of 35 year period, the formulae for calculating the required annual payment would be, Future Value, FV = (1+i) * A [{(1+i)^n -1} / i ] + A A = F/ [ {((1+i)^n-1)/i} * (1+i) +1] It is decided that the person needs $2 million at the end of 35 years period, so in this scenario the Future Value would be $2 million. In this case, FV= $2000000, i= 5%, n= 35 years. Putting these values in the above equation, Annual Payment, A = 20,868.91 = $ 20,870 (approx) Thus, the person has to put aside $ 20,869 (approx) each year to make sure that he has $ 2 million in the savings account on the 65th birthday. Problem 36 The person realizes that since the income would increase over the years it would be advisable to save less now and m ore in the later years. Thus, instead of putting the same amount aside, the person has altered his plans to let the amount to be set aside grow by 3% per year. This is a case of growing annuity which is similar to annuity as both ends after a certain period, however, growing annuity payments increase at a fixed constant rate unlike the annuity. It should be noted that since the first annual payment to the savings account is made today and continuing to do so on each birthday up to as well as including the 65th birthday, the number of periods would be 36. The formula for Future Value of Growing Annuity is, FV = A [{(1+i)^n – (1+g)^n } / (i-g) ] (Finance Formulas., n.d.) Where A= First payment, i= interest rate, g= growth rate, n= number of periods Hence, The First Payment, A = FV * [(i-g)/ {(1+i)^n – (1+g)^n }] Here, FV= $2000000, i = 5%, g = 3%, n = 36. Putting these values in the above equation, First Payment = 13,823.91 = $ 13,824 (approx) Thus, the person will have to put $ 13,824 (approx) into the savings account today and keep on increasing the succeeding payments at a growth rate of 3% per year in order to get $ 2 million in the savings account on the 65th birthday. References Finance Formulas. (n.d.). Future Value of Annuity. Retrieved July 14, 2011, from

Little Red Riding Hood Presented In Different Cultures Research Paper - 1

Little Red Riding Hood Presented In Different Cultures - Research Paper Example Little Red Riding Hood is yet another story that has been told many times in order to teach children lessons of not talking to strangers or disobeying their parents and elders. However, this story has been presented in various forms in different cultures all around the world because the best part about fairytales is that they may be morphed and diffused into different cultures and retold in different languages with the help of characters and beings that people are familiar with within the purview of their own cultures. The story of Little Red Riding Hood talks about a little girl who wore a red hooded cloak and went into the forest to look for wild berries and fruits. In the process, she was tricked into following a wolf dressed as her grandma, inside a house in a deserted part of the forest, where the wolf ultimately ate her up. The moral here is that children should not talk to or follow and believe strangers because they might fall into trouble and not have anyone around them to p rotect them from the evils of life. On viewing the same in a larger picture, parents tell their children this story as it is presented with a view to helping them understand the cruelties that lie in the world with respect to molestation, rape, and other criminal activities like vandalism and kidnapping, and how their children might be affected during their teenage years because those are the vulnerable years of a person’s life. Written by Gillian Cross, ‘Wolf’ is a very loose adaption of what a modern-day version of Little Red Riding Hood might be; it talks about the cruelties that young people are made to suffer and also social problems that rage in the world at present.

Research arguementive essay Example | Topics and Well Written Essays - 1500 words - 1

Research arguementive - Essay Example There are several reasons why alcohol should be illegalized: the number of alcohol-related deaths per year, the negative health effects that alcohol has on a person’s body, personality, coherence, general well-being and the emotional stress that alcohol users and their families go through. If making alcohol illegal were to be realized, our society would greatly benefit from it and become a better place to live in. Alcohol has some positive effects on a person when taken in moderation, which is about one drink in a single day. Some of these effects include reducing the chances of developing heart disease, diabetes, strokes and high cholesterol level. The positive effects are beneficial to a person’s health and encourage healthy living. They might, therefore, convince people that alcohol is good for the society but the likelihood of a person drinking it moderately is extremely low. Alcohol is an addictive substance that once a person starts taking, he or she will most obviously drink more every day. This habit completely hinders the chances of experiencing the positive effects of taking alcohol and instead increases the harmful effects. This means that the risk overwhelms the benefits and therefore it is only the negative effects that remain eminent. There are many ways through which drinking alcohol excessively can harm your body. Alcohol damages body organs and systems that are needed for survival. It extremely damages the brain, liver, heart, immune system and pancreas (Palmera 29). To make matters worse, alcohol is a cancer-causing agent. Once alcohol is taken, it is immediately absorbed into the body and its effects are evidenced. To the brain, it causes massive loss of memory and dizziness, effects which are harmful to the health of your body. Excessive alcohol consumption also significantly affects the brain’s neurotransmitters and makes them inefficient in performing their functions. These effects occurring on the neurotransmitters of the brain often

International Economic- WTO Essay Example | Topics and Well Written Essays - 4000 words

International Economic- WTO - Essay Example The most important round of negotiations in the history of WTO was the Uruguay Round in 1986 which resulted in significant agreement on negotiation topics. The meeting before that in 1982 had resulted in deadlock over agriculture issues. The Uruguay Round resulted in an agreement over ‘a negotiating agenda’ which covered all the trade policy issues required to be discussed (World Trade Organization, 2010). Over the years, the WTO’s agenda has had to expand from just an agreement on trade terms to include issues related to regionalism, intellectual property, services, the environment, investment, electronic commerce and labour standards (World Trade Organization, 2010).1 ‘Balance-of-payments exception’: developing countries were allowed to have less stringent terms in tariff conditions and they were allowed to protect their markets to some level because of the special status to protect them. ‘exports subsidies’: WTO promotes the elimination of export subsidies in agriculture in order to have free competitive market conditions in global agricultural trade. The implementation of this clause is more one-sided and it is the developed countries that specifically demand the elimination of export subsidies in developing countries; and ‘domestic support’: developed countries are promoting the elimination of all other forms if domestic support besides export subsidies that challenge the free competitive market conditions. (World Trade Organization, 2010) The latest agreement on the agriculture front is laid out in August 2007. According to these agreements, in developed countries, there was to be a reduction in tariff and a calculation of the Ad Valorem Equivalent (AEV) tariff. 4-6% of the tariff could be proclaimed for sensitive products. It was also agreed that there was a necessity to ‘formulate an adequate solution for tariff escalation’. Tax simplification was another clause of the 2007 Draft

Ljb Company Essay Example for Free

Ljb Company Essay Introduction LJB Company has asked the accounting firm to evaluate their system of internal controls because of the plan to go public in the near future. The president wants to be aware of any new regulations required of his company if they go public. The current system of internal controls was explained to the accounting firm. Under SOX Sarbanes-Oxley Act of 2002, all public traded U.S. corporations are required to maintain a sufficient system of internal controls. In order for this to be implemented all Corporate Executives and board of directors have to ensure that the controls are reliable and effective. With LJB Company incorporating the information from SOX act this will allow them reduce corporate fraud by making sure that all of the procedures for financial reporting is following in accordance to all guidelines. Internal Control Requirements In order for LJB Company to become a public trade, under the Sarbanes-Oxley Act of 2002 requires a registered U.S. publicly traded company to have an independent audit committee as a part of its Board of Directors. My accounting firm recommends that since LJB is a small sized company in terms of its employees should reevaluate their costs versus the benefits of being a public traded company. If LJB decides to go public in the near future there will be some new internal control requirements. One of the factors of the internal control system is to ensure that the management is in control of its environment. Top management needs to make it clear and concise on what can and won’t be tolerated especially when it comes to the organizations values, mission statement and unethical behavior. The second factor of the internal control system is the company leading its control activities. The control activities are considered as the post that holds the company’s effort to address all risks that they may possibly face going public. One thing that the company may face is fraud and in order to reduce fraud, management has to create and build policies to address those specific risks. Strengths and Recommendations Since LJB Company is relatively small, they have an advantage over their competitors who are large companies. Being a small company due to its size of employees, one of the things they are doing right is being able to set expectations and implement those within the organization. As a smaller company, the accountant’s decision to switch to pre-numbered invoices and the purchase of an indelible ink machine was a good idea and investment. The pre-numbered invoices will prevent transactions from being recorded multiple times. With the internal control system this will require that the employees forward their source documents for the accounting entries. The indelible ink machine will help organize all of the accounting duties. We recommended that LJB Company purchase an indelible ink machine to print all employees and cut checks. With the indelible ink machine this will make it difficult for unauthorized users to endorse checks and be approved. This will cut down on fraud and theft within the company. Violations LJB Company is very susceptible to fraud due the weaknesses and threats presented in the day to day operations. The type of threats include: no human resource control, lack of cash control, and no duties defined for each individual. LJB Company is lacking in the separation of duties because the Treasurer and Controller functions is being done by the same person. Although these two duties are being performed by one person and stream lining the process this causes LJB to be susceptible to fraud and out of compliance with the SOX act requirements. Each of these duties should be performed two different individuals. LJB Company has lack of cash controls. The lack of cash control has to be watched because within LJB each employee has access to petty cash and that shouldn’t be the case. Access to petty cash should be restricted to authorized personnel only. Any time there is a disbursement from the petty cash there should be an original receipt and signature that received the reimbursement. LJB Company human resource controls are very limited. Within this company both the Accountant and President have to review and approve all of the new hires which is the process. If LJB had a proper human resource control there would be a function set in place for new hires by hiring someone with HR experience that has risk training. Having a more defined HR control resource this would allow the company to clearly define the different roles and responsibilities for each employee. Also with the HR resource all employees would go through background check, each employee be given their own username and password and be tracked with the activity report. Conclusion We believe that this assessment of the current controls of LJB Company and the recommendations provided will meet your expectations and allow your company to be a fully traded public company. To reinstate this problem; in order for LJB Company to become a public trade, under the Sarbanes-Oxley Act of 2002 requires a registered U.S. publicly traded company to have an independent audit committee as a part of its Board of Directors. My accounting firm recommends that since LJB is a small sized company in terms of its employees should reevaluate their costs versus the benefits of being a public traded company. Works Cited Kimmel, Paul D.. Financial Accounting: Tools for Business Decision Making, 7th Edition. John Wiley Sons, 02/2013. .

Difference Between Greek and Roman Architecture of Antiquity

Difference Between Greek and Roman Architecture of Antiquity Introduction The purpose of this essay is to identify the differences between the Greek and Roman architecture of Antiquity. Although Greek and Roman architecture have various similarities, it is important to identify the differences and the ways the Romans chose to adapt their influences. The five architectural orders were highly favoured in both Greek and Roman architecture. Greek Architecture Greek architecture is a very influential and historical movement which is used to inspire many architects today. This movement was based on the post and lintel system which is simply a system made up of columns. Although the concept of columns may seem simple, the Greeks carved the columns into something beautiful – including carvings of mythological creatures. They created some of the most precise and distinctive designs in the history of architecture. The Greeks interest in simplicity and proportion in their buildings went on to influence Roman architects. There are five main architectural orders in classical architecture which are Doric, Ionic, Corinthian, Tuscan and Composite – which were all named by the Romans. Greek architects created the first three and took part in influencing the latter two â€Å"which were composites rather than genuine innovations† (Ancient History Encyclopedia, 2009-2014). The differences in these styles were best recognised by the dà ©cor that existed at the top of each column. (Doric, Ionic and Corinthian) The Doric Order   Ã‚   The Doric Order was the first of the architectural orders to be introduced, the top of the column is plain and undecorated while the column itself is fluted with parallel grooves. They stood directly on the temple without a base. Prominent features of both Greek and Roman versions of the Doric order are the alternating â€Å"triglyphs† and â€Å"metopes† (Essley, J). Three vertical grooves make up the triglyphs and imitate the wooden end-beams, which are supported by the architrave  that takes up the lower half of the entablature (superstructure of mouldings and bands which lie horizontally above columns). Under each triglyph are peglikedrops that maintain the structure. A triglyph is placed in the centre above every column with another between columns. â€Å"The Greeks felt that the corner triglyph should form the corner of the entablature to create a contrast with the supporting column. The spaces between the triglyphs are themetopes† (Princeton, Online). (Temple of Hephaestus in (Sharon Mollerus) Athens, Greece, 449-415 BC) The Ionic Order The Ionic Order was the second to be invented and can be recognised by its scrolled design at the top of each column – the columns are also fluted and sit on a base. This order is more slender that the Doric but very similar. (Column of the Erechtheion, Acropolis of Athens, 421-406 BC) (Guillaume Piolle) The Corinthian Order The Corinthian Order was the latest order to be produced, the late classical period was where the earliest example was found. It is best recognised for its ornate capital – apart from this factor, it is the same as the previous ionic order. The Corinthian Order was favoured by the Roman architects in a lot of their work. (The Pantheon in Rome, 126 AD) (Rosengarten. A, 1898) Roman Architecture The Greek tradition in architecture was continued on by the Romans, their interest is evident in many of their buildings – especially their use of the Corinthian Order. The Romans were known as â€Å"great innovators† because of the way they adopted new techniques and new materials and the way they adapted on existing techniques. The Romans introduced the use of domes and arches to create a new architectural style. They continued to use the Doric, Ionic and Corinthian orders – however adapting the capital of the Corinthian to make it more decorative. The Tuscan  column  is very similar to the Doric column but with a smaller design at the top. The Tuscan column was used most â€Å"in domestic architecture such as peristyles and verandahs† (Ancient History Encyclopaedia, 2009 – 2014).There became a stage where columns were no longer used for structure, but were purely decorative. The differences between Greek and Roman Architecture Greek and Roman architecture is relatively similar, they were inspired by the Greeks existing work and adapted their own styles around it. â€Å"As noted on the Palomar Educational Style Guide, the Greeks preferred a post and lintel construction method, while the Romans favoured a true arch construction†. (Faller, M) Although the Romans were inspired by the Greeks which resulted in many similarities, there are still many differences, such as the materials they chose to use. They both commonly constructed their buildings from marble or limestone – but, the Romans perfected the use of concrete in buildings which allowed them to create more free-flowing structures. In relation to the styles of columns they used, they were all favoured by both the Greeks and the Romans and made a persistent appearance in most of their buildings. Although, the Greeks did prefer the use of the Doric and Ionic orders, whereas the Romans preferred the more ornate Corinthian order. The purpose of the Greeks and Romans architecture was also different. Most of the existing Greek architecture was designed as art to honour their gods which resulted in a less ornate interior. Due to the Romans advances in material technology, a greater variety of Roman buildings still exist today. Roman architecture was beautiful internally and externally, mirroring â€Å"the pursuit of pleasure, an essential part of Roman culture† (Faller, M) In relation to more of the construction details, the Greeks work was more equilateral which was known as â€Å"post and lintel construction†. The Romans took great credit for grasping the arch and the dome, which are a prominent feature in ancient Roman architecture, but not in Greek architecture. The Parthenon and the Pantheon The Parthenon and the Pantheon are both ancient temples – the Parthenon was built in Greece for their god Athena and the Pantheon was constructed in Rome to celebrate the Roman gods. The Parthenon was first to be constructed in 126 AD and the Pantheon was constructed about six centuries later around 447 – 438 BC. (The Parthenon) (The Pantheon) Both these temples have many similarities and differences due to the Romans adapting the Greeks processes. The majority of the exterior design of the Pantheon is adapted from traditional, ancient Greek architecture, such as that of the Parthenon. It is said that both of these temples functioned as churches during the middle ages and have both faced rebuilding. The religious links of the Pantheon prevented it from being damaged by loots, but unfortunately many parts of the Parthenon were stolen in the 1700s. Of course, the Parthenon was a Doric temple which was supported by Ionic columns. The floor was constructed wholly of marble, where the base was constructed from limestone – typical materials used by the Greeks. â€Å"The east pediment narrates the birth of Athena, while the west pediment shows the contest between Athena and  Poseidon  to become the city’s patron god† (Diffen, Online). This creates a contrast to the Pantheon, which was a concrete dome supported by the ornate Corinthian columns. They were interested in capturing more beauty with small, distinctive details. Again, typical materials such as marble and concrete were used to construct this temple. Conclusion Architectural history is what formed the architecture of today, both Greek and Roman architecture has played a huge influence in numerous modern buildings. The majority of their work is very similar but they still continued to work in numerous different ways in order to make their statement in architecture. Without the Romans – who mastered the use of concrete – may have resulted in a different use of materials in which we use today. Both the Greeks and Romans have created the basis of architecture to form the process we have today. Word count: 1277 Bibliography ANCIENT HISTORY ENCYCLOPEDIA. (2009 – 2014) Greek Architecture. [Online] Available from: http://www.ancient.eu/Greek_Architecture/. [Accessed 12th December 2014]. Doric, Ionic and Corinthian. Photograph, viewed 12th December 2014, http://i39.tinypic.com/30agqbs.png> PRINCETON. Doric Order. [Online] Available from: https://www.princeton.edu/~achaney/tmve/wiki100k/docs/Doric_order.html. [Accessed 12th December 2014]. Essley, J. Pediment and tympanum, Metopes and Triglyths. Terms from Greek temples. [Online] Available from: http://www.house-design-coffee.com/metopes.html. [Accessed 12th December 2014]. Temple of Hephaestus in Athens, Greece, 449-415 BC. Photograph, viewed 13th December 2014, http://arthistoryblogger.blogspot.co.uk/2011/09/doric-ionic-and-corinthian.html> Sharon Mollerus / public domain, via Wikimedia Commons. Photograph, viewed 13th December 2014, http://arthistoryblogger.blogspot.co.uk/2011/09/doric-ionic-and-corinthian.html> Guillaume Piolle/ public domain, via Wikimedia Commons. Photograph, viewed 13th December 2014, http://arthistoryblogger.blogspot.co.uk/2011/09/doric-ionic-and-corinthian.html> Column of the Erechtheion, Acropolis of Athens, 421-406 BC. Photograph, viewed 13th December 2014, http://arthistoryblogger.blogspot.co.uk/2011/09/doric-ionic-and-corinthian.html&agt; The Pantheon in Rome, 126 AD. Photograph, viewed 13th December, http://arthistoryblogger.blogspot.co.uk/2011/09/doric-ionic-and-corinthian.html> Rosengarten. A,A Handbook of Architectural Styles,1898. Photograph, viewed 13th December 2014, http://arthistoryblogger.blogspot.co.uk/2011/09/doric-ionic-and-corinthian.html> ANCIENT HISTORY ENCYCLOPEDIA. (2009 – 2014) Roman Architecture. [Online] Available from: http://www.ancient.eu/Roman_Architecture/. [Accessed 14th December 2014]. Faller, M. Differences between Greek and Roman architecture. [Online] Available from: http://www.ehow.com/facts_5507152_differences-between-roman-greek-architecture.html. [Accessed 14th December 2014]. Diffen. Pantheon vs. Parthenon. [Online] Available from: http://www.diffen.com/difference/Pantheon_vs_Parthenon. [Accessed 15th December 2014].

Body Mutilation and Adornment :: essays research papers

Body Mutilation and Adornment There are various aspects through which people, especially youth, identify themselves. People are always sending some sort of communication out at all times, whether it is subconscious or not. Images and styles are adopted which communicate meanings about the individual to his/her peers and to society. Styles of dress, language, music, and dance are some of the ways that portray one's own unique symbols, values, and meanings. One other such signifier of identity is through body modification, particularly tattooing and body piercing. In today's society people have adopted the new style or trend of body modification. There are many reasons in which people obtain piercings and tattoos. Those who modify, manipulate and mutilate their bodies do so for many reasons. Some say it's simply exciting and pleasurable, or part of the latest fad. Others place it in the context of art, ritual or self-expression-they say it's an act with cultural and social significance. In contrast, many people can 't understand why someone would choose to put so many holes in her body or cut their skin. They see body modification as self-destructive, much like anorexia or bulimia. I am a prime example of youth urge toward body modification. Below I will talk about why, what, where, and how people modify their body and how people look upon them. Youth and adolescence is one of, if not the most, significant and influential moments in one's life, when youth are seeking their identity of who they are. Tattooing and piercing are one of the many ways through which youth may express their identity, for they are symbolic representations of how the self is conceived or understood. People may also want themselves to be portrayed as someone who they are not. For example, someone gets a tattoo or earrings just to look "tough" or "cool". I remember when I was young; I thought having an earring was the coolest thing and at the age of sixteen I couldn't take it anymore and pierced my ear against my parents will. Getting a piercing or tattoo symbolizes a certain change in ones life. These changes, no matter how miniscule they may seem, have a huge impact on a person's identity. Usually when a youth gets a tattoo or earring, they are symbolizing their maturity by finally being able to make a decision on their own and taking matters into the ir own hands.

Charles Dickens use of writing as a tool to change society in A Christmas Carol :: essays research papers

?Charles Dickens used much of his writing as a tool to change society. How does he attempt this in ?A Christmas Carol? and to what extent does he succeed During Victorian Britain, 1837-1901, the population of the country grew immensely. By the start of the twentieth century, there were three times as many people as there was at the beginning of the previous century. This led to a huge shortage of housing and work, for people to earn money towards their family budget. As there were too many workers in industries, each person was paid very little money and because of that they all had to work for very long hours. Therefore, children had to work too as they were expected to contribute to the family budget. Their size was often taken advantage of as they were sent to do very dangerous jobs which adults could not do for very long hours. Nevertheless, they only received a small amount of wages. The shortage in housing resulted in people having to settle for extreme and crowded conditions. ?Hideous slums, some of them acres wide and some more than crannies obscure misery, make up a substantial part of metropolis .........In big, once handsome houses, thirty or more people of all ages may inhabit a single room?. They had to live in such small rooms amongst so many others and they regularly died of starvation. There were also many poor civilians that passed away because of diseases. This was because sewers ran straight down the middle of the streets, often merging with the drinking water that was around. Also, the shortage of housing meant that the rich and the poor lived side by side as the cramped houses of the poor were right next to the large and spacious ones of the wealthy. This was the same chapter of history in which Charles Dickens grew up in and he, like many others, was from a poor family. At a very young age, he was forced to begin work as his father had been arrested.

The Three Stages of Alzheimers Essay -- Alzheimers Disease Essays

Alzheimer’s is most likely formed by other symptoms called dementia. Dementia is not an actual disease, but has a vast range of symptoms which are precursors to many types of diseases. When dementia is detected in an individual their memory tends to decline and it becomes a hassle to complete everyday duties. When diagnosing individuals there are a series of steps taken in order to see if the individual progressed to dementia and also which disease caused those symptoms to take effect. These stages are preclinical, mild cognitive impairment (MCI) and dementia. Within the preclinical stage there are three sub-stages that deal with protein, plaque buildup in the brain called beta-amyloid. The symptoms for this stage are undetectable. Stage two is the MCI stage, which contain more visible symptoms such as deterioration of thinking abilities. Stage three is dementia. The symptoms for this stage are more severe and researchers use biomarkers (biochemical trackers) to detect the dis ease. There have been questions on whether individuals diagnosed with MCI are more likely to stop at dementia or progress towards Alzheimer’s disease. There have been a couple of experiments pertaining to this question, however people diagnosed with mild cognitive impairment (MCI) tend to pass the third stage, which is dementia and progress towards Alzheimer’s. When a person is diagnosed with a certain health problem, it doesn’t come within a matter of seconds, it happens within a steady process. First there are symptoms which most people ignore until diagnosis, then after a couple of years of ignoring the symptoms that person is diagnosed. Minor symptoms could start with slight memory loss that could result in, for example, misplacing car keys and forgett... ...the individuals mental abilities start to slow down. Lastly, stage three dealt with dementia. Within this stage the cognitive functions start shutting down. Researchers diagnose individuals with this stage and test whether they have progressed into Alzheimer’s disease. The detection of Alzheimer’s disease is easier for the researchers to detect because the symptoms are noticeable and their cognitive and behavior changes for the worst. These individuals start having mood swings and obsessive compulsion disorder and unacceptable social behavior. Referring back to the BMC Neurology research experiment, it showed that 54 individuals were diagnosed with Dementia and 50 individuals progressed to Alzheimer’s disease. This concludes that people diagnosed with mild cognitive impairment (MCI) tend to pass the third stage, which is dementia and progress towards Alzheimer’s.

RE: Letter to the editor Essay

In reply to your letter, I would like to inform you, that the policy regarding the removal of Aboriginal children was not as you stated. As soon as a child was born, they were considered a ward of the state because of their Aboriginality. The policy of Assimilation was established in 1911 for the removal of children from their community to extinguish their culture. This is also known as Genocide, but was not seen that way until the policy was removed in the mid 1960s. Bessy Flower was born in 1943, and taken from her home at 19 months. She was a product of the Assimilation policy. Bessy was removed just the same as most of the other children, pulled obscenely from her mothers arms. She was placed to live in the Annesfield native institution for the next 14 years of her life. Just the same as most of the other Aboriginal children in the homes, she was no longer allowed to make any contact with her family and was subjected to ongoing physical, mental and sexual abuse, malnutrition and humiliation. In some of the institutions the standards of living were degrading just so that the children could have an education and become ‘absorbed’ into the white community, some say it was as if they had been tried to be turned a ‘different shade of white’. The half-caste children were taken under a legislation, which gave guardianship to the protectors in their state of origin. The people that looked after the children once they were removed, once called ‘protectors’, took up the role of paternalism. This gave the parents no right to appeal to the court of law, and the children had no choice in what they did or where they went. After 1940 the children were removed under the general child welfare legislation, but still the way the children were extracted was much the same  as before. Only very gradually did the ritual of separating half-caste children from their homes meet with the general non-Aboriginal practices concerning child abuse and neglect. This came as late as the 1970s, when already tens of thousands of children had been removed. The reason the children were removed was always thought to be for their own benefit, to protect them from themselves, as well as to ‘breed-out’ the Aboriginal race as it was thought that they were less-superior to white people. Some people remember; â€Å"†We were told that our mother was an alcoholic and that she was a prostitute and she didn’t care about us. They used to warn us that when we got older we’d have to watch it because we’d turn into sluts and alcoholics, so we had to be very careful. If you were white you didn’t have that dirtiness in you †¦ It was in our breed, in us to be like that.†Ã¢â‚¬  Although now, there is thought to be not one Aboriginal family that has not been scared by the removal of a child, sibling, niece or nephew. Somewhere between one in three and one in ten children were removed. One in ten is a big number of people to be subjected to the abuse endured, but one in three is preposterous. Some of these children were taken at birth, some at two years of age, some in their childhood years. When the children were removed, they were given a chance at an education that they would never have gotten otherwise. Not all of the children had a horrible up-bringing; some were placed into homes and treated with respect from their foster families. â€Å"†We were all happy together, us kids. We had two very wonderful old ladies that looked after us. It [Colebrook, South Australia] wasn’t like an institution really. It was just a big happy family. Y’know they gave us good teaching, they encouraged us to be no different to anybody else.†Ã¢â‚¬  These children have called themselves the ‘Stolen Generation’. Although all  the State governments in Australia have apologized for the injustice that went on, the Federal Governments still refuse the Aborigines right to an apology or compensation. Bibliography: http://72.14.203.104/search?q=cache:NldOa-78ca0J:www.ondix.com/pdf/docs/studies_research_college_1071167943.pdf+bessy+flower+1943+assimilation&hl=en&gl=au&ct=clnk&cd=2 Told a story that helped with the insight to the cruelty of what really went on in some people’s lives as an affect of assimilation. http://www.tim-richardson.net/misc/stolen_generation.html Explains clearly the Assimilation policy, and the legislations surrounding it. http://www.hreoc.gov.au/bth/additional_resources/bth_guide/children_experiences.htm Gave some quotes form people that were removed who grew up with good lives, and bad. Documentary watched with Mrs. Hooks class can’t remember what it was called, but it had people explaining just how much they suffered, even when they had a good life to find out what really happened and where their family might have been for the past 70 years. More informative than internet sites because they were proper interviews.

Analyzing Indian Transfer Pricing Regulations: a Case Study

International Research Journal of Finance and Economics ISSN 1450-2887 Issue 40 (2010)  © EuroJournals Publishing, Inc. 2010 http://www. eurojournals. com/finance. htm Analyzing Indian Transfer Pricing Regulations: A Case Study Monica Singhania Associate Professor, Faculty of Management Studies (FMS), University of Delhi, India E-mail: [email  protected] du Abstract The Indian Transfer Pricing regulations have been enacted with a view to provide a statutory framework which can lead to computation of reasonable, fair and equitable profit and tax in India so that the profits chargeable to tax in India do not get diverted elsewhere by altering the prices charged and paid in intra-group transactions leading to erosion of Indian tax revenue. Any income arising from an international transaction shall be computed having regard to the arm’s length price (ALP). The ALP shall be determined by any of the prescribed methods, being the most appropriate method. The present paper illustrates the practical aspects of the law regarding transfer pricing as it exists presently in India with the help of a case study. The relevant rules envisage determination of ALP by applying margins of each comparable company to the appropriate base of the enterprise. The regulations further provide that, where more than one price is determined by the most appropriate method, the ALP shall be taken to be the arithmetical mean of such prices. An alternative practical approach to arrive at such ALP is to compute the arithmetic mean of margins of comparable companies and apply the same to the appropriate base of the tested party to determine the ALP. The analysis shows that the mean GP/Sales of comparable companies is 33. 71% while that of the PQR India (i. e. , the tested party) is 44. 20% during the year ended March 31, 2009 indicating that the prices of international transaction of PQR India conform to the arm’s length standard prescribed under the Indian regulations. Further, under Category B, costs recharged by PQR Group to PQR India are included. All these costs represent actual amounts paid by PQR Group to independent third parties and are recovered from PQR India, on a cost-to-cost basis. Applying the comparable uncontrolled price method, these recharges conform to the arm’s length standard prescribed under the Indian regulations. However, there are some practical problems arising out of the applications of transfer pricing egulations, which need to be addressed by the tax administrators as early as possible. These issues include absence of advance pricing agreements (APA) mechanism in India, data limitations, extremely wide definition of associated enterprises in India, stringent penalties, difficulties encountered while conducting economic analysis/benchmarking and many more. Keywords: Transfer Pricing, Tax laws, International transactions, Arms length price 1. Introduction The Indian Transfer Pricing regulations have been enacted with a view to provide a regulatory framework which is capable of computing reasonable, fair and equitable profit and tax in India so that the profits chargeable to tax in India do not get diverted elsewhere by altering the prices charged and 204 International Research Journal of Finance and Economics – Issue 40 (2010) paid in intra-group transactions leading to erosion of Indian tax revenue. Any income arising from an international transaction shall be computed having regard to the arm’s length price (ALP). The regulations on transfer pricing in India were clearly inevitable and long overdue. The regulations in their present form are a product of the findings of the Expert Group set up by the Government of India in November 1999 to study global transfer pricing practices and examine the need for such legislation in India. The Indian transfer pricing regulations applicable with effect from April 1, 2001 are largely based on the OECD guidelines. By manipulating a few book entries in the accounts books, multinational corporations are able to transfer huge profits with practically no actual change in the business process. For instance, X Ltd. manufactures ipods for $ 500 in China, but its US based subsidiary buys it for $ 599, and then sells it for $ 600. By doing this, the company’s taxable profit in the US is substantially decreased. At a 30 percent tax rate, the company’s tax liability in the US is only 30 cents (i. e. , 30% of $ 1) as compared to $30 (i. . , 30% of $ 100 which should have been the case). The large scale tax avoidance practices used by multinational corporations came into public notice when the drug giant MNE, GlaxoSmithKline, agreed to pay the US government $3. 4 billion to settle a long-running transfer pricing dispute over its tax dealings between the UK parent company and its American subsidiary. This was the largest settlement of a tax dispute in the US. Multinational corporations derive several benefits from transfer pricing. Since each country has different tax rates, they can increase their profits with the help of transfer pricing. By lowering prices in countries where tax rates are high and raising them in countries with a lower tax rate, such organizations can reduce their overall tax burden, thereby boosting their overall profits. Indeed one often finds that corporations located in high tax countries in fact pay very little corporate taxes. Transfer pricing features highly on the agenda of Indian tax authorities. The transfer pricing assessments relating to the first two years since the introduction of the Transfer Pricing regulations have seen incremental tax collections arising from transfer pricing adjustments in excess of US$ 800 million. The first round of transfer pricing audits in India of roughly 800 taxpayers resulted in 25% facing adjustments. The cumulative value of those adjustments aggregated US$ 300 million. In the following year, according to estimates, tax demands in excess of US$ 500 million were imposed as a result of upward adjustments. In this connection, the Indian tax authorities had initially set a very conservative threshold for audit INR 50 million (around USD 1 million) for the first four years. This threshold has been enhanced thrice with effect from the financial year 2005-06. The Indian tax authorities have also set up a specialized group for undertaking transfer pricing audits and have begun using confidential comparable data for audit purposes. Scrutiny of overall profitability as well as transactional level pricing during the course of transfer pricing audits is also frequently done. 2. Theoretical Framework The role of multinational enterprises (MNEs) in world trade has increased dramatically over the last 20 years. This reflects the increased integration of national economies and technological progress. Intercompany transactions across borders are growing rapidly and are becoming much more complex. Compliance with the different requirements of multiple overlapping tax jurisdictions is a complicated and time-consuming task. At the same time, tax authorities from each jurisdiction impose stricter penalties, new documentation requirements, increased information exchange and increased audit or inspection activity. With a view to provide a detailed statutory framework which can lead to computation of reasonable, fair and equitable profits and tax in India, in the case of such multinational enterprises, the Finance Act, 2001 substituted the then existing section 92 with sections 92A to 92F in the Income-tax Act, 1961, relating to computation of income from an international transaction having regard to the arm's length price, meaning of associated enterprise, meaning of information and documents by persons entering into international transactions and definitions of certain expressions occurring in the said section (see Appendix I for summary of Indian Transfer Pricing Regulations). The essential International Research Journal of Finance and Economics – Issue 40 (2010) 205 documentation which needs to be maintained for complying with these provisions as also the penalties for default in compliance are given in Appendix I. As per the Indian Regulations, the comparable data to be used in anal yzing the comparability of an uncontrolled transaction with an international transaction should be the data relating to the financial year in which the international transaction has been entered into. However, data relating to a period not being more than two years prior to such financial year may also be considered if such data reveals facts, which could have an influence on the determination of the transfer price in relation to the transactions being compared. The Arm's length principle (ALP) aims at determining whether the parties to a transaction are independent and are on an equal footing. The OECD framework as per Article 9 of the OECD Model Tax Convention ensures that the transfer prices between companies of multinational enterprises are established on a market value basis, avoiding profits being systematically deviated to lowest tax countries. It provides the legal framework for governments to have their fair share of taxes, and for enterprises to avoid double taxation on their profits. The primary onus of proving the arm’s length character of a transaction lies with the taxpayer. If during assessment proceedings, the tax authorities, on the basis of material or information or documents in their possession, are of the opinion that the arm’s length price was not applied, or adequate and correct documents/ information/ data were not maintained/ produced, the total income may be recomputed accordingly after giving the taxpayer an opportunity of being heard. 3. Literature Review There are numerous studies relating to transfer pricing in transactions taking place in developed countries1. This is primarily due to, the detailed statistical information relating to intra-firm trade made available in most of the developed countries, stringent laws requiring greater transparency, etc. In comparison, the availability of intra-firm trade data in developing countries is highly inadequate2. In addition, there is no systematic attempt in developing countries, to collect and analyze relevant data in one information repository database leading to multiple uses of such or ganized information. This is the case even though such information may in many cases exist with different government organizations, legal and administrative authorities and private business organizations engaged in creation of such databases for commercial reasons. This disjointed effort to data collection leads to multiple problems in undertaking quality research studies. It also highlights complete lack of coordination between policies, procedures and their practical application. Also the lack of any government sponsored studies, like those in Colombo, Greece and Sri Lanka, may be the reason why not many transfer pricing studies are undertaken in such countries. In United Kingdom, the transfer pricing rules were formulated as early as in 1915 [(Payan and Wilkie (19933)]. However, there was little pressure on such rules until mid 1960s when the revival of international trade and investment following World War II began. As far as United States is concerned, even before the non-traditional methods of transfer pricing were added to section 482, Schindler and Henderson (1985)4 pointed out, â€Å"Inter-corporate transfer pricing under the scope of code section 482 is one of the most complex areas of international taxation. † The non-traditional methods further added to complexity. The OECD’s Transfer Pricing Guidelines (1995)5, based on guidelines first issued in 1979, 1. Lall S. 1973), â€Å"Transfer Pricing by Multinational Manufacturing Firms†, Oxford Bulletin of Economics & Statistics, Vol. 35(3), pp. 173-95. 2 Bhagwati J. N. (1974), â€Å"On the Under Invoicing of Imports, Fiscal Polices of the Faking of Foreign Trade De clarations of the Balance of Payments†, in Bhagwati (ed. ), Illegal Transactions in International Trade, North Holland Publishing Co. 3 Pagan, Jill C. and J. Scott Wilkie, (1993) â€Å"Transfer Pricing Strategy in a Global Economy†, Amsterdam: IBFD Publications. 4 Schindler, Geunter and David Henderson (1985),â€Å" Intercorporate Transfer Pricing: 1985 Survey of Section 482 Audits,† Tax Notes, Vol. 29, pp. 1171-77. 5 OECD (1995, as updated). Transfer Pricing Guidelines (Paris: OECD). 206 International Research Journal of Finance and Economics – Issue 40 (2010) largely influence international practice with regard to transfer pricing. The Indian transfer pricing regulations, introduced in 2001, are to an extent modeled on the OECD guidelines. Li (2003)6 describes the methods of transfer pricing by way of an international comparison involving six countries namely, China, Hong Kong, Japan, Canada, United States and Singapore. Ring (2000)7 explains the methodology of undertaking Advance Pricing mechanisms whereby both the tax payers as well as tax administrators agree in advance on the methodology to be used to determine transfer prices in order to avoid unnecessary litigation. Lall (1979)8 highlights the need of a laid back attitude towards transfer pricing in developing countries so as to remain an attractive investment destination in the form of foreign direct investment. R. Murray [1981]9 studied the mechanism by which international tax avoidance is achieved. These mechanisms include general manipulations as well as specific manipulations to items in the profit and loss account and balance sheet. Baistrocchi (2004)10 explains the administrative inexperience of developing countries in implementing transfer pricing rules. Mo (2003)11 gives instances of manipulation of transfer prices and steps taken to combat it in China, India, Brazil and Mexico. UN Survey (1999)12 reveals that in developing countries about 61 per cent respondents felt that the domestic multinational enterprises were engaged in income shifting and 84 per cent believed that foreign enterprises were doing so. In addition, 70 per cent and 87 per cent, respectively, of these countries thought the problem to be significant. Newlon (2000)13 notes the tendency of MNCs to over report income in jurisdictions that impose heavy penalties. Mitchell (2004)14 treats worldwide taxation as a form of tax harmonization. According to his view, tax harmonization is categorically undesirable because â€Å"taxpayers are unable to benefit from better tax policy in other nations and governments are insulated from market discipline†. 4. PQR India: Case Study Design and Analysis Global Tax Consultants Pvt. Ltd. ave been engaged by PQR India to review the transfer pricing arrangements for international transactions with its associated enterprises during the year ended March 31, 2009 on the terms set out in the engagement letter. The objective of this paper is to establish whether the international transactions between PQR India and its associated enterprises adhere to the arm’s length principle, embodied in the Indian Transfer Pricing Regulations of the Indian Income-Tax Act, 1961(see Appendix I) and in addition look to the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations published by the Organization for Economic Cooperation and Development for further guidance in applying the arm’s length standard. 6 Li, Jinyan (2003), â€Å" International Taxation in the Age of Electronic Commerce†: A Comparative Study (Toronto: Canadian tax Foundation). 7 Ring, Diane M. (2000). â€Å"On the Frontier of Procedural Innovation: Advance Pricing Agreements and the Struggle to Allocate Income for Cross Border Taxation,† Michigan Journal of International Law, Vol. 21 (winter) pp. 143-234. 8 Lall, Sanjaya. (1979). â€Å"Transfer Pricing and Developing Countries: Some Problems of Investigation,† World Development, Vol. 7 Issue 1 (January), pp. 59-71. 9 Murray R. Editor (1981), â€Å"Multinationals Beyond the Market: Intra-firm Trade and the Control of Transfer Pricing†, London: Harvester Press Brighton, pp. 119-32. 10 Baistrocchi, Eduardo. (2004). The Arm's Length Standard in the 21st Century: A Proposal for both Developed and Developing Countries. † Tax Notes International, Vol. 36 No. 3 (October 18), pp. 241-255. 11 Mo, Phyllis Lai Lan. (2003); â€Å"Tax Avoidance an d Anti-avoidance Measures in Major Developing Economies† (Westport, Conn. : Praeger), pp. 207. 12 United Nations Conference on Trade and Development (1999), Transfer Pricing. (New York). 13 Newlon, T. Scott. (2000). â€Å"Transfer Pricing and Income Shifting in Integrating Economies,† in Sijbren Cnossen, editor, Taxing Capital Income in the European Union: Issues and Options for Reform (Oxford: Oxford University Press), pp. 214-42. 14 Mitchell, Daniel J. (2004). â€Å"The Economics of Tax Competition: Harmonization vs. Liberalization,† in 2004 Index of Economic Freedom, Marc Miles, et al. , editors, (Washington: Heritage Foundation), Chapter 2. International Research Journal of Finance and Economics – Issue 40 (2010) 4. 1. Company Profile 207 PQR Group, USA deals in design, manufacture and marketing of the state of the art photocopier machines. In addition, it also offers document management solutions, one-to-one marketing expertise and efficiency management services for various organizations in the United States and internationally. PQR India is a wholly-owned subsidiary of PQR Group, USA. PQR India commences business of import and resale of photocopier machines imported from PQR Group during the financial year 200809. The development of the arm's length price in this analysis recognizes that PQR India is a distributor of photocopier machines in India and is exposed to ordinary risk profile associated with such class of businesses. PQR India, leverages on all the valuable intellectual property rights (knowhow, copyrights etc. ) and other commercial or marketing related intangibles (brand names, trademarks etc. ) owned by PQR Group. Based on the functional analysis, PQR India has relatively less complicated operations and as such bears relatively lesser share of risks and is accordingly selected as the tested party for the purpose of carrying out the economic analysis as part of determination of transfer price on the basis of arms length principle. 4. 2. Industry Overview As per the Indian Regulations (see Appendix 1), every person who has entered into an international transaction shall keep and maintain interalia, the information and documents giving a broad description of the industry in which the assessee operates. The Indian Regulations also prescribe that the comparability of an international transaction with an uncontrolled transaction shall be judged with reference to the conditions prevailing in the markets in which the respective parties to the transactions operate. Hence, for the purposes of the transfer pricing analysis a comprehensive overview of the industry is essential. Industry overview essentially consists of industry background, evolution of industry, characteristics of marketing, emerging industry trends, key drivers, key inhibitors and future outlook for the industry. 4. 3. Functional Analysis As per the Indian Regulations, every person who has entered into an international transaction shall keep and maintain inter alia, a description of the functions performed, risks assumed and assets employed or to be employed by the assessee and by the associated enterprises involved in the international transaction. A functional analysis enables mapping of the economically relevant facts and characteristics of transactions between associated enterprises with regard to their functions, assets and risks. Hence a functional analysis facilitates characterization of the associated enterprises and assists in establishing a degree of comparability with similar transactions in uncontrolled conditions. 4. 3. 1. Functions performed by PQR Group PQR Group, USA deals in design, manufacture and marketing of the state of the art photocopier machines. In addition, it also offers document management solutions, one-to-one marketing expertise and efficiency management services for various organizations in the United States and internationally. In addition, it has a massive research and development center. 4. 3. 2. Functions performed by PQR India PQR India is engaged in the business of import and resale of photocopier machines imported from PQR Group. To understand the functions performed by PQR India, it is important to have an overview of the transactions taking place, which are depicted below: Transactions classified as Category A: Import of finished goods by PQR India and thereafter wholesale distribution by PQR India 208 International Research Journal of Finance and Economics – Issue 40 (2010) Transactions classified as Category B: Cos recharges are PQR Group from PQR India Functions performed by PQR India under Category A: PQR India, as a wholesale distributor performs a variety of functions including sales, marketing, after sales support, etc. Category B – Cost recharges: Under Category B transactions, cost-to-cost recharges on account of certain expenses incurred by PQR Group on behalf of PQR India are included. Assets employed: Any business requires assets (tangible or intangible) without which it cannot carry out its activities. Intangibles play a significant role in the functioning of a business and are accordingly more important. An understanding of the assets employed and owned by PQR India provides an insight into the resources deployed by PQR India and their contribution to the business processes/economic activities of PQR India. Tangibles owned by PQR India: It includes electrical installations, furniture and fixture, office equipments and computer hardware. Intangibles: PQR India being a relatively new company does not own any significant intangibles and does not undertake any significant research and development on its own account that leads to the development of non-routine intangibles. PQR India uses the trademarks, process, know-how, technical data, software, operating/quality standards etc. developed/owned by PQR Group. All companies of the group leverage from these intangibles for continued growth in revenues and profits. . 4. Overview of Inter-Company Transactions PQR India engages in the following inter-company transactions with its associated enterprises: Import of finished goods, import of spar e parts and consumables and cost recharges. The above transactions have been grouped together in two classes namely Category A and Category B which have been separately analyzed from a transfer pricing perspective. 4. 5. Selection of Tested Party The tested party is the participant in the controlled transaction whose profit attributable to the controlled transaction can be verified using the most reliable data and requiring the fewest and most reliable adjustments. In ost cases, the tested party is the least complex of the controlled taxpayers, that is, the taxpayer with the least amount of risk associated with its operations and without valuable intangibles or unique assets that may distinguish it from potential uncontrolled comparable companies. Based on the above, PQR India is clearly the tested party for purposes of this analysis. It does not own an interest in any of the valuable know-how, patents, brand names and trademarks owned by the PQR Group. PQR Group, on the other hand, may own valuable intellectual property rights including commercial and marketing intangibles. Therefore, the comparability adjustments that would be required if independent organizations were to be selected as tested parties, would be both substantial and unreliable. 4. 6. The Most Appropriate Method The ‘most appropriate method’ is that method which, under the facts and circumstances of the transaction under review, provides the most reliable measure of an arm’s length result. In determining the reliability of a method, the two most important factors that need to be taken into consideration are: (i) the degree of comparability between the controlled and uncontrolled transactions and (ii) the coverage and reliability of the available data. Because the selection of the â€Å"most appropriate method† involves a test of relative merit, a method that may not be perfect is not rejected unless some other method can be shown to be more reliable or clearly indicating to provide a better estimate of an arm's length result. International Research Journal of Finance and Economics – Issue 40 (2010) 209 Selection of the Most Appropriate Method Comparable Uncontrolled Price Method (CUP): In practice, there are two types of comparable uncontrolled transactions. The first, known as an â€Å"internal comparable,† is a transaction between one of the parties to the controlled transaction and an unrelated third party. The second, known as an â€Å"external comparable,† is a transaction between two unrelated third parties. There are no internal CUPs available for all products imported by PQR India to benchmark its transactions under Category A. PQR India is engaged in import of finished goods and spares consumables for resale in India under Category A (all related to photocopier machines). However, PQR India does not purchase same/similar products from entities other than associated enterprises. Further, during the year, until the commencement of commercial operations by PQR India, overseas gr oup entities sold some similar products to a third party in India. The third party was a Tier-II distributor of PQR Group whereas PQR India acts as a Tier-I distributor. In this way due to unavailability of adequate data to make suitable adjustments to account for the aforesaid differences, it was considered inappropriate to use the third party as an internal comparable in the present case. Therefore, CUP method was not considered for the purpose of ascertaining an arm’s length price for the international transactions of PQR India under Category A. As for external comparables, it may be highlighted that the arm's length price as far as uncontrolled enterprises are concerned, is substantially dependent upon factors such as volume, contractual terms, location differences, etc. It may not be possible to estimate with reasonable reliability and accuracy, the combined effect of such factors on per unit prices in case of external comparables. Further, abstract factors such as use of intangibles make the use of CUP method difficult for benchmarking purposes. In view of the above, there are no external comparables available, which may be considered sufficiently appropriate to warrant the use of the CUP method for Category A transactions of PQR India. However, in case of transactions in the nature of costs recharges by PQR Group to PQR India, included under Category B, the third party cost reimbursed is a CUP for the reimbursement. Keeping in view the nature of transaction and the degree of comparability, CUP was considered as the most appropriate method for this class of transactions. Consequently other methods were not considered. Cost Plus Method (CPM) PQR India is a distributor. It imports the finished products, spares and consumables from the Group companies (all related to photocopier machines) and resells them in the domestic market. In this way, in this case PQR India carries out the function of a pure reseller. Since RPM is most appropriate in cases involving the purchase and resale of tangible goods, this method was considered as the most appropriate method for deriving the arm’s length price of PQR India under Category A. The application of CPM is ordinarily appropriate in two situations, the provision of services to a related party and the manufacture of tangible goods that are sold to a related party. PQR India on the other hand, operates as a distributor under Category A. Accordingly, CPM was not considered as the most appropriate method for deriving the arm’s length price for Category A transactions of PQR India. Profit Split Method (PSM): PSM is typically applied where each party to the transaction under evaluation has significant intangible assets and/or the operations of the parties to the transaction are highly integrated and cannot be evaluated on a separate basis. Also, in general, the PSM relies primarily on the internal data and assumptions pertaining to each party to the controlled transaction instead of relying on comparable uncontrolled transactions as market benchmarks, thus making the use of the PSM ordinarily less reliable than the other methods. PQR India does not own any non-routine intangibles and further the operations of PQR India can be independently evaluated. Therefore, PSM was not considered as the most appropriate method for deriving the arm’s length price of PQR India’s international transactions under Category A. Transactional Net Margin Method (TNMM) Net profits may however, be influenced by some factors that either do not have an effect or have less substantial or direct effect on gross margins. Such factors in the case of PQR India include several 210 International Research Journal of Finance and Economics – Issue 40 (2010) extraneous factors which have been in the later write up. The losses made by the Company at the operating level, in the current financial year, is a result of these factors. The reasons for loss at operating level under Category A were: a) First year of operations and b) Acquisition of mailing business. These additional expenses incurred by the company during the year adversely impacted its profitability at the operating level. However, these expenses were necessary business expenses which had to be incurred in the first year of operations. Given the aforementioned state of affairs, in order to ensure fair comparison of the operating profitability of the company with comparable companies in the industry, one would need to make suitable economic adjustments to appropriately take into account the impact of the aforesaid acquisition of new business by the company. Conclusions of the Most Appropriate Method After reviewing all of the transfer pricing methods, we recommend given the fact and circumstances, the RPM provides the most reliable measure of an arm’s length result for Category A transactions of PQR India. CUP has been selected as the most appropriate method for the international transactions undertaken by PQR India under Category B. 4. 7. Search for Uncontrolled Comparables Databases: The two most popular and widely recognized corporate databases (i. e. , Powers & Capitaline) to identify potential uncontrolled comparables for PQR India transactions under Category A. The primarily focus was on Prowess and additional companies were considered Capitaline Plus, i. e. , companies for which data was not available in the Prowess database. Selection of time period: As per the Indian Regulations, the data to be used in analyzing the comparability of an uncontrolled transaction with an international transaction shall be the data relating to the financial year in which the international transaction has been entered into. However, data relating to a period not being more than two years prior to such financial year may also be considered if such data reveals facts which could have an influence on the determination of the transfer price in relation to the transactions being compared. The present analysis involves data analysis of companies from both databases only if they had relevant financial data for at least two out of the three financial years ending during the period April 1, 2006 and March 31, 2009. This has been done in order to eliminate, to the maximum extent possible, any variance in results caused by short-term differences in business cycles, product life cycles or business strategies of individual companies. Search Process Our comparable search strategy identified Indian independent distributors whose functions, assets and risks were broadly comparable to those of PQR India under Category A. International Research Journal of Finance and Economics – Issue 40 (2010) Search from Prowess Criteria for selection Total number of companies whose information is available on Prowess as on March 31, 2009 Number of companies having positive sales and ratio of sales trading to sales of more than 40% over the relevant time period under consideration were selected so as to capture all possible traders available in Prowess Number of companies herein sales trading as a percentage of sales was higher than 75% were short listed, in order to eliminate companies that were primarily not engaged in trading activity Selection of only those companies with a positive net worth Qualitative Analysis, to eliminate companies operating in industries other than electronics, electrical machinery and miscellaneous distributors and to eliminate controlled/controlling companies 211 No. of Companies achieving the criterion 12,994 1,050 565 496 5 Search from Capitaline Plus Criteria for selection Total number of companies whose information is available on Capitaline Plus as on March 31, 2009 Identified additional companies with positive sales over the time period under consideration were selected i. e. companies for which information was primarily not available in Prowess database Selected companies classified in the ‘Electronics’, ‘Miscellaneous Manufactured Articles’, ‘Electrical machinery other than electronics’ and ‘Non-electrical machinery’ industries Selection of only those companies with a positive net worth Qualitative An alysis, to eliminate companies not engaged in trading activities in the same/ similar industry segment and to eliminate controlled/controlling companies. No. of companies achieving the criterion 8,160 1,650 228 86 2 Finally, at the end of the above described search process from both the databases, we were left with 7 comparable companies for benchmarking Category A transactions of PQR India. 4. 8. Choice of a Profit Level Indicator (PLI) The application of RPM requires the selection of an appropriate Profit Level Indicator (PLI). The PLI measures the relationship between (i) profits and (ii) either costs incurred, revenues earned, or assets employed. A variety of PLIs can be used. Factors relevant to the selection of the appropriate profit level indicator include the reliability of the available data and the extent to which the profit level indictor takes into account costs that would be considered by independent parties. Gross Profit Margin is the ratio of Gross Profit to Sales (GP/Sales) and was selected to reliably measure the income of PQR India that it would have earned had it dealt with uncontrolled parties at arm’s length under Category A. 4. 9. Determination of Arm’s Length Results The Indian Regulations require that the Arm’s Length Price (ALP) in relation to an international transaction shall be determined by any of the prescribed methods (CUP, RPM, CPM, TNMM and PSM), being the most appropriate method. All methods other than CUP are methods that enable determination of ALP on the basis of respective margins earned by comparable uncontrolled companies. The relevant rules envisage determination of ALP by applying margins of each comparable company to the appropriate base of the enterprise. The regulations further provide that, where more than one price is determined by the most 212 International Research Journal of Finance and Economics – Issue 40 (2010) ppropriate method, the ALP shall be taken to be the arithmetical mean of such prices. An alternative practical approach to arrive at such ALP could be to compute the arithmetic mean of margins of comparable companies and apply the same to the appropria te base of PQR India to determine the ALP. Arm’s Length Results S. No. 1 2 3 4. 5. 6. 7. 8. 9. 10. 11. Name of the Company X1 India Ltd. X2 India Ltd. X3 India Ltd. X4 India Ltd. X5 India Ltd. X6 India Ltd. X7 India Ltd. Mean Median Upper Quartile Lower Quartile Data Source Prowess Prowess Prowess Prowess Prowess Capitaline Plus Capitaline Plus GP/Sales (%) 30. 00 40. 00 35. 00 28. 00 22. 00 45. 0 36. 00 33. 71 35 38. 00 29. 00 The above analysis shows that the mean GP/Sales of comparable companies under Category A is 33. 71%. Hence, prices of international transactions of PQR India under Category A, that achieve GP/Sales of 33. 71% or more would conform to the arm’s length standard prescribed under the Indian regulations. The financial results of PQR India indicate that the company has GP/Sales of 44. 20% during the year ended March 31, 2009. For Category A transactions, GP/Sales of PQR India are higher than the mean GP/Sales of comparable companies. Further, under Ca tegory B, costs recharged by PQR Group to PQR India are included. All these costs represent actual amounts paid by PQR Group to independent third parties and are recovered from PQR India, on a cost-to-cost basis. Applying the CUP method, these recharges conform to the arm’s length standard prescribed under the Indian regulations. The above analysis provides evidence that both the pricing basis itself of international transactions of PQR India during the financial year 2008-09 and the outcome of the pricing i. e. , the profitability were in accordance with the ‘Arm’s Length’ standard prescribed under the Indian Transfer Pricing Regulations. 5. Summary and Recommendations The regulations on transfer pricing in India were indeed inevitable and long overdue. The case study of PQR India clearly demonstrates the computation procedure required to be followed for scientifically determining the arm’s length price as per the provisions of transfer pricing in India. The analysis shows that the mean GP/Sales of comparable companies is 33. 71% while that of the PQR India (i. e. , the tested party) is 44. 20% during the year ended March 31, 2009 indicating that the prices of international transaction of PQR India conform to the arm’s length standard prescribed under the Indian regulations. Further, under Category B, costs recharged by PQR Group to PQR India are included. All these costs represent actual amounts paid by PQR Group to independent third parties and are recovered from PQR India, on a cost-to-cost basis. Applying the comparable uncontrolled price method, these recharges conform to the arm’s length standard prescribed under the Indian regulations. However, there are some practical problems arising out of the applications of transfer pricing regulations, which need to be addressed by the tax administrators as early as possible. These issues include absence of advance pricing agreements (APA) mechanism in India, data limitations, extremely wide definition of associated enterprises in India, stringent penalties, difficulties encountered while conducting economic analysis/benchmarking and many more. International Research Journal of Finance and Economics – Issue 40 (2010) 213 References [1] Baistrocchi, Eduardo. (2004). The Arm's Length Standard in the 21st Century: A Proposal for both Developed and Developing Countries. † Tax Notes International, Vol. 36 No. 3 (October 18), pp. 241-255. Bhagwati J. N. (1974), â€Å"On the Under Invoicing of Imports, Fiscal Polices of the Faking of Foreign Trade Declarations of the Balance of Payments†, in Bhagwati (ed. ), Illegal Transactions in International Trade, North Holland Publishing Co. Lall S. (1973), â€Å"Transfer Pricing by Multinational Manufacturing Firms†, Oxford Bulletin of Economics & Statistics, Vol. 35(3) pp. 173-95. Lall, Sanjaya. (1979). â€Å"Transfer Pricing and Developing Countries: Some Problems of Investigation,† World Development, Vol. Issue 1 (January), pp. 59-71. Li, Jinyan (2003), â€Å"International Taxation in the Age of Electronic Commerce†: A Comparative Study, Toronto: Canadian tax Foundation. Mo, Phyllis Lai Lan. (2003), â€Å"Tax Avoidance and Anti-avoidance Measures in Major Developing Economies†, Westport, Conn. : Praeger, pp. 207. Mitchell, Daniel J. (2004), â€Å"The Economics of Tax Competition: Harmonization vs. Liberalization,† in 2004 Index of Economic Freedom, Marc Miles, et al. , editors, Washington: Heritage Foundation, Cha pter 2. Murray R. Editor (1981), â€Å"Multinationals Beyond the Market: Intra-firm Trade and the Control of Transfer Pricing†, London: Harvester Press Brighton, pp. 119-32. Newlon, T. Scott. (2000), â€Å"Transfer Pricing and Income Shifting in Integrating Economies,† in Sijbren Cnossen, editor, Taxing Capital Income in the European Union: Issues and Options for Reform (Oxford: Oxford University Press), pp. 214-42. OECD (1995, as updated). Transfer Pricing Guidelines (Paris: OECD). Pagan, Jill C. and J. Scott Wilkie (1993), â€Å"Transfer Pricing Strategy in a Global Economy†, Amsterdam: IBFD Publications. Ring, Diane M. (2000). â€Å"On the Frontier of Procedural Innovation: Advance Pricing Agreements and the struggle to allocate Income for Cross Border Taxation†, Michigan Journal of International Law, Vol. 21 (winter), pp. 143-234. Schindler, Geunter and David Henderson (1985), â€Å"Inter corporate Transfer Pricing: 1985 Survey of Section 482 Audits,† Tax Notes, Vol. 29, pp. 1171-77. United Nations Conference on Trade and Development (1999). Transfer Pricing (New York). [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] 214 International Research Journal of Finance and Economics – Issue 40 (2010) Appendix I Indian Transfer Pricing Regulations Legal Position: The Finance Act 2001 introduced with effect from assessment year 2002-2003, detailed Transfer Pricing regulations vide section 92 to 92F of the Income Tax Act, 1961. The Central Board of Direct Taxes (CBDT) has come out with Transfer Pricing Rules – Rule 10A to Rule 10E. Applicability: Transfer pricing provisions are applicable based on fulfillment of two conditions: Firstly, there must be an international transaction. Secondly, such an international transaction must be between two or more associated enterprises, either or both of whom are non-residents. Pricing Method permitted: Arm's Length Price is to be determined by adopting any one of the following methods, being the most appropriate method: Comparable Uncontrolled Price method, Resale Price Method, Cost Plus Method, Profit Split Method, Transaction Net Margin Method, or any other method prescribed by the Central Board of Direct Taxes (CBDT). Documentation/Return: 13 different types of documents are required to be maintained. These include – 1) Enterprise-wise documents:-Description of the enterprise, relationship with other associated enterprises, nature of business carried out. 2) Transaction-specific documents:-Information regarding each transaction, description of the functions performed, assets employed and risks assumed by each party to the transaction, Economic & Market Analysis etc. 3) Computation related documents:-Describe in details the method considered, actual working assumptions, policies etc. , adjustment made to transfer price, any other relevant information, data, documents relied for determination of arm's Length price etc. A report from a Chartered Accountant in the prescribed form giving details of transactions is required to be submitted within a specific time limit. Penalty: Penalty for concealment of income or furnishing inaccurate particulars thereof100% to 300% of the tax sought to be evaded. Penalty for failure to keep and maintain information and documents in respect of International transaction2% of the value of each international transaction Penalty for failure to furnish report under section 92E- Rs. 1,00,000. OECD Guideline: No reference to OECD guidelines under Indian Transfer Pricing regulations No provisions regarding Advance Pricing Agreements Advance Pricing Agreement: under Indian law as of now Government web-link: www. incometaxindia. gov. in Source: OECD Transfer Pricing Country Profilehttp://www. oecd. org/dataoecd/9/4/42236399. pdf