Retail and Investment Banking in the UK Essay Example | Topics and Well Written Essays - 2500 words

Retail and Investment Banking in the UK - Essay Example Even though the face of banking may change, the functionality may not be altered in many cases. This, therefore, means that the need to come up with strategies to accommodate the change is necessary. One of the strategies that are brought forward is the use of separation of investment banking from the retail section of banking. Separation of retail banking from investment banking is a strategy that is required as a measure to increase financial stability within a national economy. In this separation, the banks either specialize to perform retail or investment banking in an arrangement known as ring-fencing of the banks (Coppola, 5, September 2014 ). In this arrangement, a local subsidiary of a bank that takes the deposits of local customers is protected from the parent corporation through trade bans and deposits security mechanisms (Song 2004, pp 19). In this way, the deposits of the local customers are protected from external shocks of the economic uncertainties that the large international corporations could have exposed them to. In Great Britain (2012, pp11), the rules that set up the conditions for ring-fenced banks are listed. These rules set the prohibitions that are set for the banks that are set by the regulating authority. In this essay, the effectiveness of the separation of retail banking and investment banking are discussed. The focus of the essay remains if the separation can really bear intended fruits or collapse and the possible consequences of the separation. Investment banking provides services and funds to different sectors of the economy. In doing this, investment banking exposes utilizes the financial capital that is majorly drawn from the savings or deposits of the clients. It means that in a worst-case scenario, if the economic forces force the investments to collapse totally, then the bank is faced with insolvency.  

AUDIT Essay Example | Topics and Well Written Essays - 1500 words

AUDIT - Essay Example . . . . . . . . . . . . . . . 3 The Advantages and Disadvantages of an External Audit . . . . . . . . . . . . . . . . . . . . 3 Description of Risk-Based Auditing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The Identified Business Risks at Lordbury Playhouse . . . . . . . . . . . . . . . . . . . . . . 5 The Role of the External Auditor in the Detection of Fraud at Lordbury Playhouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Bibliography 1. Introduction This refers to your letter dated May 3, 2011 regarding the completed year-end audit of the Spectrum Theater Group Ltd. I have endeavored to give an explanation of the reasons for the huge amount charged for said audit. 2. Legal Requirements to have or not to have an External Audit There are legal mandates in UK for the con duct of external audit in an organization such as the Spectrum Theater Group Ltd. Under the Companies Act of 1985 , auditors are required to audit the annual financial statements of the organization and to submit a corresponding report to management if said report meets the requirements of said Act. The auditors shall also include in their report their findings regarding the accounting records of the organization if properly maintained. ... in accordance with the Combined Code on Corporate Governance effective November 1, 2003, we are also required to review compliance of the organization with the Listing Rules of the said code and to report findings accordingly. 3. The Advantages and Disadvantages of an External Audit An external audit aims to review the company’s financial statements and internal controls for the auditor to give an opinion as to whether the said financial statements are fairly presented. The auditor can also comment on the weaknesses of financial controls and records he finds in the audit. While recognizing the valid purpose of an audit, it has some advantages and disadvantages. Advantages Findings of the auditor regarding financial controls and operational weaknesses or inadequacies can be immediately corrected/improved/enhanced by management; Assurance for management and board of directors that accounting controls and processes used are in place and effective. Accurate financial statement is basis for proper tax filings of the organization , thus penalties and interests can be prevented ; The company’s image or status is improved/enhanced resulting to greater opportunities for projects by in-coming investors and trust by regulatory agencies and the public. Disadvantages The expenses incurred to pay the auditor and the cost of documentation shall involve a huge amount. The agency can rely on their internal auditors to conduct the investigation. External auditor gains access to confidential records. Duplication of efforts of internal auditors and external auditors conducting the audit procedures at the same time, same period for the same purpose. 4. Description of Risk-based Auditing Risk-based audit focuses on risks assessment and prioritization of risks rather than giving