Is Investment a Matter of Evaluating Risk or Simply Luck Essay

Is Investment a Matter of Evaluating Risk or Simply Luck - Essay Example Most goals in personal investment are straightforward, in that individuals may be preserving their assets, saving for his or her retirement, funding his or her pension plan, or he or she is meeting a university spending requirement (Finke & Huston, 2003). Harrison et al., (2009), Bajtelsmit and Bernasek (2007), and Finke and Huston (2003) emphasize that personal investment constraints can be simple or complex depending on the individual and the current investment situation. The primary constraint which, individual experiences the tolerance level that an individual has the market risk. Potential return and the market risks are related, in that the desire of an individual to experience a greater return will need his or her exposure to higher market risks (Papke, 2008). In most investment cases, the time horizon is another fundamental constraint. A good example is a university endowment that has an infinite horizon has risks which are unwise for an investor who is looking to invest in his or her child’s education (Duflo & Saez, 2009). Other investment constraints include liquidity requirements, exposure to taxes, legal issues, and other factors such as avoiding some investments. Constraints on personal investments change with time and an individual must carefully study and research on these constraints before deciding on investing in any investment plan. The review provides a discussion of the technical analysis concepts. It reviews on the module showing how it works, depicting two advantages and two disadvantages. The literature reviews on the fundamental analysis, showing how the module works. The research shows two advantages and disadvantages of the analysis. Part two of the research entails the working of the random walk theory, showing and explains how it works.

Analysis of the Auditing Report Purpose Essay Example | Topics and Well Written Essays - 1000 words

Analysis of the Auditing Report Purpose - Essay Example The essay "Analysis of the Auditing Report Purpose" overviews the main objectives and principles of accounting and the process of auditing that help an auditor in reporting the financial condition and working result of the organization. During auditing, the auditor may come across some errors and frauds although that is not the primary objective of the auditor. The auditor can also disclose whether the accounting system adopted by the company is efficient enough, during which time he may mention some several glitches in the system. The auditor has to examine books of accounts and any other relevant document so that they can report the financial condition of the firm. During the process, the auditor may come across some errors or frauds which can be in the form of clerical errors or errors of principle. Clerical errors can be divided into errors of commission, errors of omission, and compensating errors. Some frauds can be so damaging that they lead to the company bankruptcy. A good example is The Enron scandal that led to the bankruptcy of the corporation that was a result of audit failure. There are the following principles in auditing: planning, honesty, impartiality, secrecy, evidence, consistency and legal framework. The auditor has to plan before starting their work. The auditor decides to account about the internal control procedure and the accounting. Honesty and sincerity are the second most important principles of auditing. The auditor should exhibit a high degree of loyalty and professionalism.