Pricing And The Uk Supermarket Industry Economics Essay - Free Essay Example

Sample details Pages: 6 Words: 1876 Downloads: 10 Date added: 2017/06/26 Category Statistics Essay Did you like this example? In this chapter the background of the topic and the discussion about research problems of the thesis are introduced as well as the purpose and delimitations of the study. They will be described and examined in order to enhance the understanding of our intention for the research and its boundaries. 1.1 Background Pricing is an exercise ,rather an integral part of economic decision making regarding what the seller or the producer can expect to receive in exchange for the manufactured products or the intangible services. (reference) Don’t waste time! Our writers will create an original "Pricing And The Uk Supermarket Industry Economics Essay" essay for you Create order In economic sense, a lot of micro and macro factors go into bearing their consequences for price determination vis a vis the level of demand in the particular market. Pricing theory ,since its inception has researched the absolute and evolving nature of pricing decisions to be made and executed by various stake holders in the economic system.(reference) In business enterprises ,the pricing decisions are no doubt the most significant decisions which not only have consequences for marketability, ability to meet or not to meet the current levels of demand ,the level of competition ,the sustenance and survival of the entity, but also in turn determines the cash inflows, business viability and the very economic supply chains, value chains and virtually the entire economic system and its performance over periods of time as well. The financial modeling in financial analysis as well as the marketing mix, all insists on just the right pricing to capture consumers surplus and in turn generate the monetary resources for enterprise to sustain and evolve . The pricing is the sole decision which brings in money, everything else is just cost[1]. The British Super Markets A supermarket, a form of grocery store, is a self-service store offering a wide variety of food and household merchandise, organized into departments. It is larger in size and has a wider selection than a traditional grocery store and it is smaller than a hypermarket or superstore[2]. (journal/book reference rather than Wikipedia) Supermarkets have their roots in the 19th century Co-operative movement through which groups of local retailers would come together to sell affordable food under the control of consumer members (reference). The first co-operative was founded in Rochdale, Lancashire in the 1840s. Subsequently co-operatives across the North of England came together to form the Co-operative Society in order to allow the purchasing goods in bulk[3]. In the United Kingdom, first supermarket emerged under the new Premier Supermarkets brand in 1951, taking ten times as much per week as the average British general store of the time. Other chains caught on, and after Galvani lost out to Tescos Jack Cohen in 1960 to buy the 212 Irwins chain, the sector underwent a large amount of consolidation, resulting in the big four dominant UK retailers of today: Tesco, Asda (owned by Wal-Mart), Sainsburys and Morrisons[4]. (reference apart from Wikipedia) The major chains have been opening ever-larger format stores, with Asda and Tesco in particular opening hypermarkets. The major grocery retailers have diversified into non-food retail, online shopping, and other activities unrelated to shopping.The industry structure has now evolved. The on going consolidation and mergers and acquisitions as well as development of monopoly is rendering a new shape to the industry. The bigger the supermarket chain, the more ability it has to abuse its market position and put pressure on other parts of the food chain[5]. (reference apart from tescopoly) The Leading supermarkets Tesco à ¢Ã¢â€š ¬Ã¢â‚¬Å" Tesco became the market leader in 1995 and has continued to increase its market share ever since, reaching a staggering 31.5% market share in 2006 Asda à ¢Ã¢â€š ¬Ã¢â‚¬Å" Asdas business is more focused on hypermarkets and out-of-town stores than the other UK chains, in the model of Wal-Mart, which bought it in 1999. Sainsburys à ¢Ã¢â€š ¬Ã¢â‚¬Å" neck and neck on market share with Asda, Sainsburys slipped since being the top retailer in the UK but is now doing well. Morrisons Morrisons became the fourth supermarket chain when it acquired the majority of Safeway stores in 2005. Marks Spencer à ¢Ã¢â€š ¬Ã¢â‚¬Å" MS has 450 stores in the UK, and a further 150 worldwide. The Co-operative Group à ¢Ã¢â€š ¬Ã¢â‚¬Å" The Co-op has a total market share of around 5%. Retailers today face many challenges: keeping costs low and supply chain efficiencies high; protecting their brand and reputation; responding rapidly to changing consumer tastes; expanding their reach to penetrate new markets and compete from a position of strength; and greening their operations . (reference) Approaches to pricing Change has become the universal constant. There were times in British organized retail industry ,when the economic dominance over global economic systems was unchallengeable. In the post-recession period since the 2008,the economic realities have undergone transition. The same pricing decisions now needs re interpretation in wake of emerging economic complexities and financial crisis. The economic questions remain the same yet environment is different .The most basic question is regarding the quantum of allocation of manufactured product or the service or the probable creation of value for consumer. Then comes the objectives and the motives before cornering on a specific price.(reference) Profit maximization or cost-plus pricing or demand based or value-based pricing or rate of return pricing, or competitor indexing. The intentions to provide local flavor-different prices at different locations can be another strategy.(reference) The efficient market mix calls for market share development ,incorporating the information and demand based asymmetries as well as cornering the competitor. Marketing age and dependency of consumers herald yet another dimension in pricing. Oligopolistic attempts to retain market share can be visible in form of price maintenance, price collusion, or price discrimination. More than that the microeconomic factors like production costs, extent of competition , role of state and demand elasticities do creep in.T he value chain costs and methods of payments as well as associated lateral costs can also figure up. (reference) After all , a well-designed pricing strategy needs to help the organization achieve the economic objectives and financial goals. Along with this it should make the business motives achievable .In addition to this it needs to support a products positioning and be consistent with the other variables in the marketing mix . Evolution and Prevalence The capitalistic à ¢Ã¢â€š ¬Ã¢â‚¬Å" socialistic economic divide is no longer feasible. The market structure is in itself much more complex than ever. The attempts to single out one strategy no longer seems to be practical.Thinkers and philosophers are coming up with new theoretical inputs to the change. The law of one price (hereafter LoP) , one of the most basic laws of economics and yet it is a law observed in the breach[6]. Demanding two prices for same product in one market for exactly the same goodà ¢Ã¢â€š ¬Ã¢â‚¬ is so simple as to invite complication. Changes in ways to approach the problem do happen. Economists come up with new theoretical rationale behind the current problems . LoP has undergone restatement[8].The dynamics of information availability or non-availability seems to be the under current behind price variability. The philosophy of price variation seems to have revolutionized after the Barzels innovation. Most commodity exchange agreements consist of an explicit, objectively measured contractual component enforced by the state, and an implicit, subjective component enforced by reputations. Becoming informed about the former is relatively easy, but becoming informed about the latter is not[9]. Buyers do not fully adjust for differences in the reputational component of similar commodities. This gives sellers discretion in setting prices, and we expect prices to diverge even at equilibrium. Costless information, along with competition, yields the LOP. LoP is based on greed , homogeneity of goods and speed to equilibrium[11]: A. Multiple sellers at one spot to ensure competition at each location. B. Standardized, bulk sale commodities with specialized traders, for which ready credit is available. C. Rapid attainment of equilibrium. Yet the practical observation clearly suggests that , even if all commodities were goods, the sheer volume of goods makes the collection, compilation, storage and transmission of data so costly that we will never get individual data, only indexes and aggregates. Then the trend of modern consumerism is toward more personalized products, which not only increases the number of goods to be considered but also makes price discrimination more likely. Further , all modern economies are moving away from mass produced manufactured goods and toward services. This clearly complicates the pricing tactics . it appears to be in the interest of sellers to acquire one degree of information beyond that acquired by consumersà ¢Ã¢â€š ¬Ã¢â‚¬ -hence there will always be some room for the sellers to manipulate consumers and violate the LoP in the process[12] 1.2 Problem Definition The master thesis covers the topic of how same product-à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. being priced at three different retail chains(à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦) , in à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦..area in à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.. In todays environment customers are becoming more demanding in terms of better service, including reliability and faster delivery. Pricing in itself is being viewed with competitive advantage aspect. Yet the availability and non-availability of information can bring about the LoP. There seems to be no validity for the argument that increasing information processing capacities will bring about the end to price variation across the considered retail chains in à ¢Ã¢â€š ¬Ã‚ ¦..area in à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. An underlying reason for the importance of the chosen topic lies in evaluating the reasons behind the price variations across the à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦as well as providing superior pricing strategy inputs which is the main foundation for a sustainable competitive advantage. 1.3. Research Methodology In this paper, the researcher will investigate into product differentiation used by the retailers to charge different prices for same products to different customers, using the case of supermarketsà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. in à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. Area across à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦..city. The study will adopt triangulation method to carry out the research. Given the time and resource limitation, a convenience sampling method will be used. Observations regarding the prices of different products sold by the three leading supermarkets à ¢Ã¢â€š ¬Ã¢â‚¬Å" Tesco, Sainsbury and Waitrose will be made and analyzed. The final result will be achieved by combining the existing qualitative theories with the observation and analyses of the data collected. 1.4 Research Objectives The paper intends to carry out an assessment of product differentiation used by different supermarkets in order to charge different prices for the same products. The basic research objectives of this study are: To understand the rationale behind pricing To understand what affects pricing in the chosen supermarkets in the designated area of study To discover different pricing strategies To critically evaluate previous academic studies on pricing theories To understand what theories retails use To understand the extent to which retailers use product differentiation to charge different prices from different customers. To understand the limitations in this study However, the main objective of the study will be to understand the pricing theories that exist in writing and the observation made about the pricing theories used by the supermarkets in reality. 1.5. Thesis Organisation Chapter 2 Literature Review 2.1 Price Variation .. . . . . Real economies are subject to a succession of exogenous shocks. The discovery of new products, new processes, new sources of raw materials, new demands, and new ways of organizing production are, as emphasized by J. Schumpeter (1911), the driving forces of economic development and growth. It is unreasonable to suppose that such Schumpeterian shocks are all foreseen and can be incorporated as part of equilibrium. 2.2 Factors affecting pricing . . . . . . 2.3 Theoretical framework Chapter 3 Research Methodology Chapter 4 Data Analysis Chapter 5 Findings Chapter 6 Conclusions Appendix

Let the Punishment Fit the Crime in the State of California

The Punishment After having been arrested and charged with the killing of my children’s father, I was subsequently convicted of first degree murder, PC §187a (CA Codes). The sentencing guidelines, here in California, require a judge to adhere to PC §190a which states that, â€Å"Every person guilty of murder in the first degree shall be punished by death, imprisonment in the state prison for life without the possibility of parole, or imprisonment in the state prison for a term of 25 years to life (CA Codes). I had serious concern toward the possibility of falling under PC §190.2a which asserts that, â€Å"The penalty for a defendant who is found guilty of murder in the first degree is death or imprisonment in the state prison for life without the†¦show more content†¦From the moment I was situated nude for my initial strip search, I adhered to the fact that I am now someone else... a criminal. I am undeniably feeling the retributivist effect of having lost eve rything that I once valued in exchange for the life choices I made. This leads me to think that CCWF is in full alignment with the retributivist philosophy, so why then do I have feelings of optimism while incarcerated here? Utilitarians view punishment as a pathway lined with deterrence†¦ one that ultimately leads criminals towards rehabilitation. This is a forward-looking approach, as it focuses on the future of criminal behavior (Hemmens et al., 2013). This perspective concentrates on two separate entities. Those being the person whom is punished, as well as the other members of society. If one were to ask a utilitarian, â€Å"Why Punish?† the response would likely be, â€Å"We must punish in order to promote good and prevent evil†¦ in the future.† There is little focus on the crime that has already been committed or under what circumstances that it occurred. The concern is with what society should do next in order to prevent it from happening again. Utilitarians believe that if no good consequences result from punishment, then no punishment is justified. One could look at this philosophy of punishment as a doorway of opportunity for criminals, but also as a doorway of fearâ₠¬ ¦ one that keeps law-abiding citizens fromShow MoreRelated Capital Punishment Essay: Death Penalty is Good for the Economy1301 Words   |  6 PagesThe Death Penalty is Good for the Economy    Crimes are committed everyday. Many people are caught, while many are not. In the United States of America, when a person kills another person s/he is considered a murderer. The instant that murder takes place all rights should automatically be revoked. Murderers should not be allowed to walk the streets. Once a person has killed there is a good change that it could happen again. Convicted murderers should be given the death penalty and have it carriedRead MoreJuveniles Should Be Tried as Adults Essay1705 Words   |  7 PagesKids should be subjected to the measures of punishment that our judicial system is giving to them. Kids who show lots of enmity should be tried as adults. It is the only way to protect the innocent children. These kids know right from wrong, but they choose to do the wrong things and violence is wrong. As the laws have gotten stricter on discipline the kids have gotten wilder. When we let society tell us how to discipline our children then violent children is t he result. Shawn was 16 in 1998 whenRead More`` Thinking About Crime ``1239 Words   |  5 PagesCrime has always been, and always will be a factor in society. It has existed since ancient times. The first recorded laws were â€Å"Hammurabi’s Laws†. A set of rules engraved in a large pillar in the middle of the Sumerian city-state of Babylon. Back then the punishments were simple. 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After watching several short films that include testimonies of the death row exonerate s, I learned of just how easily these innocent people were almost murdered by a system that you and I are funding. The victims go on not only to tell of their own suffering but also the horror that their families endured. Many of them had several executionRead MoreThe Incarceration Rate Of The United States1370 Words   |  6 Pagesfreedom and opportunity. As the Pledge of Allegiance states, â€Å"One nation under God, Indivisible, with liberty and justice for all.† However, under the current criminal justice system, more and more people lose their liberties because of the crimes they have committed. According to Roy Walmsley, a consultant of the United Nations and Associate of the International Center for prison studies, â€Å"In October 2013, the incarceration rate of the United States of America was the highest in the world, at 716 perRead MoreThe Incarceration Rate Of The United States1543 Words   |  7 Pagesfreedom and opportunity. As the Pledge of Allegiance states, â€Å"One nation under God, Indivisible, with liberty and justice for all.† However, under the current criminal justice system, more and more people lose their liberties because of the crimes they have committed. According to Roy Walmsley, a consultant of the United Nations and Associate of the International Center for prison studies, â€Å"In October 2013, the incarceration rate of the United States of America was the highest in the world, at 716 per

Us pivot to asia Free Essays

string(141) " US stakes in the region are not new but dates back to almost two centuries ago starting off with its independence and continues since then\." The paper strives to present the gradual transformation within the global political scenario where China is perceived as a growing power, while US as a declining power. The study also incorporates the most significant hegemonic theories of Power Transition and Balance of Power. It, furthermore, unfolds the significance of Asia- Pacific and the competition of global powers over the reserves within the South-China Sea. We will write a custom essay sample on Us pivot to asia or any similar topic only for you Order Now Being China as a threat to US, the paper offers a comparison between US old strategy of containing Soviet’s expansion and Its latest strategy of containing China. Moreover, it also presents the implications of US refinancing on such a vulnerable state of Pakistan. Introduction: The recent changes in the global politics and economy have spurred the world powers to do the utmost in furthering their national goals in-order to seek multiple financial gains. The economic hunger and greed have become the defining characteristics of today’s powerful states as the Inclination of International community towards Asia-Pacific Is one such example. It has been acknowledged that the one dominating the Asia-Pacific would also be in the position to become a excessive global might. Being Mediterranean Ocean as a concern of the past, Atlantic as merely a topic of the present, the focus of the entire international community has shifted towards the whole new facet I. E. The Asia Pacific . The phenomenal development and growing might of China have not only disturbed America but also Its partner states since a powerful China could only challenge the US global status. Over the last two decades, Washington has remained stuck In Afghanistan and Iraq, thus paving way for China to advance its political influence within the Asia-Pacific. Pivot to Asia†, or more specifically â€Å"US refinancing†, demonstrates the realization of American strategic thinking towards the threat which Beijing poses to Washington not only diplomatically but also economically. Aim: To study the US strategy of â€Å"pivot to Asia† In its historical and contemporary perspective so as to draw its Implications on Pakistan. Significance of Asia-Pacific: The significance of Asia Pacific lies in the geopolitical interests of the key powers of the global politics. The Key players which define the politics of the Pacific include US, Japan, China and several smaller regional actors. The years following the financial predicament of 2009 have witnessed some crucial political and strategic changes since the region has become the centre of attraction driving the global politics. The region finds Its Importance In the economic and political concerns of the major global powers since It Is not only strategically vital but also possesses a symbolic meaning. The one dominating it would determine the political and the financial future of the world as the South China Sea (CSS) contains an enormous bulk of natural reserves. Its importance could be deduced from the fact that as high as two-thirds of the global sets are being deployed within the area thereby, validating the assumption that by 2050 the centre of gravity would unfalteringly shift to the Asia Pacific. Keeping in natural reserves in that area have become the flashlight. The tussle over the gas, oil, fish and the other reserves have provoked the powers, especially US and China, to adopt a belligerent military posture and to stand eye-to-eye before each other. The CSS, being bordered by China, Vietnam, Philippines, Taiwan, Brunet, Malaysia and Indonesia, elongates to approximately 3,500,000 sq/km and enjoys a bulk of oil and as reserves somewhere underneath the oceans. Furthermore, it is also significant to international shipping since about one-third (almost 41 ,OHO ships) of the global shipping passes through it each year. It is also known for its â€Å"Large Marine Ecosystem† having distinctive features of biography, ecology and oceanography. Being a semi-enclosed sea, it possesses a large number of Islands having strategic, legal, political and financial worth for the regional and international powers. It holds the world’s most desirable sea lanes, while as high as 80% of the total oil imported by he States of Taiwan, Japan and South-Korea travels via this regions. The international business and trade routes are also equally important for the establishment of military bases as for the political gains. The US presence in the Asia-Pacific proves the point as almost half of the US Naval forces are deployed along the region while, the development of Chinese military capabilities within the area demonstrates the aggressive posture of the key players. The detection of the hydrocarbon and the presence of marine resources, on the other hand, have intensified the competition towards seizing the natural resources to such an extent that a small tension could even prompt a war in the region. The sea also enjoys the idiosyncratic feature of bio-diversity having more than 1,000 fish, 200 shrimp and 50 chopped species thereby, contributing its major share in terms of food and revenuer. Moreover, much of the exports and economies of the adjacent States are dependent on the fishery goods. These incentives, thus, spur the key stakeholders to lock their horns with each other. The Core Interests of the Major Actors in Asia- pacific: Asia-Pacific enjoys a special position not only as being an emblem of national prestige, ego and identity but also because of its strategic and geographic worth. The key actors involve US, China and Japan. US Interests: The geopolitical and strategic significance of the Asia-Pacific places the United States as the most enthusiastic, keen and yet most powerful competitor in the region. The regional markets have attracted the US by providing exceptional opportunities for trade, business, investment and above all the possibility to get access to the latest and advanced technology. Keeping in view the recent global recession and American economic slump, the US economic recovery heavily relies on exports and its approach to the Asian consumer markets. The region is strategically, economically and politically vital for the US since the CSS region is in its central interests not only to counteract China but also North Korea. The US stakes in the region are not new but dates back to almost two centuries ago starting off with its independence and continues since then. You read "Us pivot to asia" in category "Papers" The ultimate defeat of Japan in World War-II introduced America as the only decisive global power, thereby authorizing it to further its leslies and interests throughout the world and especially in Asia-Pacific. With the passage of time, its interests grew deeper and stronger while engaging all possible Washington reckons that the region holds superseding importance while the progressive future of US largely depends on boosting its trade, diplomatic or armed intervention and its presence is vital to guarantee a serene Asia. On strategic grounds, one of the core intentions of the US, particularly after 9/1 1, is to ensure absolute security for its citizens from extremism. For this very purpose, its defended ores are positioned all-across the region to deal with the menace and to curb the terrorists threatening the very existence of the land. Most importantly, it is also eager to â€Å"balance the power† against the possible rising regional hegemony, China, which is both financially and diplomatically capable of defying the only global hegemony. Such a possible scenario has forced US to strengthen its alliances with Korea, Australia, Japan, Thailand and Philippines to tackle the very concerns 1 . Washington seems to be very active since the furthering of US interests within the region largely depends n Beam’s engaged leadership and administration. On political grounds, US have always been a staunch proponent of democracy. Its democratic commitment has forced the government to get engaged into the domestic issues of smaller regional states like Philippines. United States is also interested to uphold the status-quo through its continuous diplomatic and armed presence and also through adopting diverse multilateral approaches to advance its agenda of curbing China and also the prevention of WIND proliferation of North-Korea since Washington perceives itself and its allies being threatened by its nuclear capability. China: Claims and Interests China, being a maritime, air and land power, is keen to acquire certain islands within the South-China Sea. Keeping in view China’s mounting dependency on fuel, oil and other natural commodities, it has eyes not only on the CSS region but also has established brotherly ties with the states of Central Asia, Middle East and Africa which are rich in mineral and oil resources. Economic boost and internal stability are two core ambitions of China that have led the country to alter the political scenario not only within Asia but beyond. China claims its right on almost the entire CSS egging where its claims rests on the historical nine-dash line. The claimed areas include â€Å"Sparely Islands†, â€Å"Gulf of Trotting†, â€Å"Hanna Islands† and â€Å"Parcel Islands†13. The rapidly growing food and oil demands have placed China as one of the key stakeholders of Asia-Pacific, thereby making the rest anxious and concerned. Moreover, being the claimant of broad sovereignty over the region, it has drawn a maritime boundary that extends from Taiwan to Philippines, from Malaysia to Brunet while passing along the Shore of Vietnam. Being an emerging power, it has already established its bases possessing a wide array of advanced equipments both in Parcel and Sparely arrears. The international observers view China’s historical claims over sovereignty as highly rigid, invalid and rather self-indulgent, while China incessantly insists on simply following the path that was pursued by the West since US has its shares in certain islands of North-Pacific and France controlling few areas in South- Pacific. On historical grounds, China reckons that the Hans, Mongols, Munches and Tibetan were Chinese and the areas conquered or ruled by them, thus, belong to he very land. The historical manipulation has been cashed by the Chinese authorities very efficiently and has provoked patriotic and nationalistic sentiments throughout the country, thereby complicating the issue and making it an emblem of of the majestic legacy of China but also the state-owned media and textbooks promote such a reality. History holds a very unique and significant position within the country which could be witnessed through education, media, myths, folklore and research institutions and has been exploited to strengthen China’s territorial and maritime assertiveness. Ever since World War-II has ended, China has actively engaged itself in reshaping and restructuring its borders, refining its territorial integrity by using coercion and historical manipulation, renaming certain islands and imposing its viewpoint on the rest of the stakeholders. The decade of sass’s saw several unpleasant clashes amongst China, Vietnam and Philippines while continuous Chinese maritime inspection has led to escalation of tensions and differences. Furthermore, China has been criticized for violating and disrespecting asses law of sea which the country ratified in 1996. China is keen to pursue at least three core objectives in South-East Asia and CSS region. First is the regional integration which is central to its strategy of â€Å"peaceful rise†. The second incorporates the resource competition and control which is not vital to China but also to other claimants. The growing population and demands of the Chinese have fiercely contributed in China’s efforts towards guaranteeing resource security. The third includes China’s ensured grip and augmented security within the entire region which has made the US septic over its military intentions. Japan’s Role: Japan, an Asian power, is highly septic and concerned about China’s galloping power and, therefore, is keen to contribute in US refinancing strategy. The history of Sino- Japanese ties is not encouraging since Tokyo has remained a dominant US ally against communism during Cold-War. The disintegration of USSR put Us-Japan coalition into a more strong partnership and their friendship has longed for over 60 years. Tokyo is interested to play a foremost role in US refinancing against China and enjoys a significant position in the eyes of America thinkers. Emerging China and US Apprehensions: The turning of US to Asia is based on the hypothesis that its eventual competitor would emerge from the States. Ever since then, the policy makers have drawn-out few possible competitors which could become a threat to the US. Amongst the potential regional powers China, Russia, India and Japan took the lead. The policy and defended analysts, then, objectively analyzed their intentions, military and economic goals and deterrence capability against US. Amongst certain defended analysts of early asses, Marshall was the first one to predict China’s military and economic boost in the upcoming thirty years. The most probable scenario, according to him, was that rising China and revived Russia would become key challengers to US hegemony. The dramatic emergence of China has not only confronted American imperative interests but also is capable to defy the US global preponderance. Considering this picture, India, being China’s immediate neighbor, has been the most rational choice for the US to incorporate it into a worthy alliance. The China’s AD (defended, deterrence and development) stratagem has contributed a bunch in its expansion, development and transformation over the past three decades. Its average GAP growth since 1979 has been measured up to 9. 82%. Being the second largest economic might and third largest commodity exporter, it enjoys a significant position both within and beyond its phenomenal military and economic boost has made a number of world economies dependent on Chinese products and services, thus challenging US economic superiority. The military edge of China over other Asian states allows it to have a diplomatic dominance and coercive capability against its perceived peer competitors. Washington is concerned not only over the China’s galloping power but also fears its rear denial potential, thereby allowing it to utilize coercion against its neighboring states and gradually shifting the US dominance from the region. The only choice left for US, therefore, is to deter and dissuade China from expanding its might globally, amongst which â€Å"Pivot or refinancing† is one such strategy. China’s rising might spawns intersecting interests, contradictory ideologies and dissenting worldviews. Beijing, not only, is advancing its naval capability but also structuring its military on modern grounds which make the other entrants anxious and agitated. Theoretical Framework: The US strategy of refinancing remains a hot topic thus, involving the most crucial theories of International Relations (R) including â€Å"Power Transition Theory’ and â€Å"Balance of Power Theory’ Power Transition Theory: The hegemonic theory of power transition focuses on a rising power that poses challenges to the dominant power. The idea is that the emerging challenger, being disgruntled with the status-quo, starts approaching the potential of the dominant state thereby threatening to transgress it in terms of power. It means that the leading power is facing a decline n its capacity while the rising state takes full advantage of the situation. Moreover, the emerging state is motivated to topple the prevailing system established by the leading state when it was enjoying its global dominance. Such a situation triggers instability and war becomes inevitable for the challenger to hasten the course of power transition. Such a scenario can be witnessed amongst America and China where America is the dominant state facing tremendous challenges and China as the emerging one. Balance of Power: The theory highlights the significance of power- haring in an anarchic system where an effort is put forward to avoid any possible hegemonic. The hegemonic designs of the aggressor are challenged by those states that believe in â€Å"balance of power† in-order to secure peace and stability. Such a situation can be seen amongst China, US and its allies where China is perceived as possessing hegemonic designs while US and its partner states struggling to balance the power within Asia-Pacific. Pivot to Asia or US Refinancing: â€Å"The future of politics will be decided in Asia, not Afghanistan or Iraq, and the United States will be right at the centre of the action†26. Hillary Clinton While Afghanistan and Iraq were Bush’s focal targets, Asia-Pacific remains a central objective of Barack Beam’s regime and administration. Though the region has been a tacit target for so long, but was acknowledged in November, 2011 during Beam’s visit to Australians. He announced the region as US top priority thereby, associating a strategic, deliberate, diplomatic and premeditated stance to it thus, demonstrating that the US would remain there as an influential player for a much longer time. Since then, the high profile authorities and government officials eve openly been voicing their President’s political ambitions, thus showing the level â€Å"pivot to Asia† but later was renamed to â€Å"refinancing† since the word â€Å"pivot† shows impermanence and rather implies that there has been a sudden shift in American strategic thinking while before that the region was not too important for the country. The enduring interests of United States have engaged it with the region for over two centuries. The non-governmental players including media, traders, and academics e. T. C. Have boosted the regions significance for the country and have been belly engaged in obstructing powerful positive and rather productive US-Asian liaison. Since US possesses a notable majority of immigrants, millions of settlers from Asia-Pacific can be found within the country, thereby getting benefited from American capitalist society while remaining attached to their mother homelands. The regimes of both former presidents G. W. Bush and Bill Clinton were largely focused on the crisis situation of Spooks, Iraq, Bosnia, Somalia and later Afghanistan. President Clinton, however, took a few steps towards normalizing the US ties with the other Asian actors including Vietnam, but he was more interested in deterring and also engaging China. At least four core reasons have been provided regarding US turn to Asia-Pacific; the first acknowledges the most palpable transition period where the country has to line-up its future strategic and diplomatic priorities while considering the US departure from Iraq and Afghanistan. Secondly, the recent budgetary cuts call for the urgency to lay before the table the country apex concerns in-order to eschew those policies which could transgress the budget. The hired motive encounters the ascending economic and military significance of Asia- Pacific since the region has been marked as a defining feature of the century ahead, thereby deciding the fate of human kind. The fourth impetus, which is perhaps the mother of all, underlies the China’s rising might and its â€Å"perceived threat† to US. Curtailing or countering China is the fundamental objective that has prompt America to adopt such a policy. The US worries about China’s phenomenal growth both militarily and economical, its anti-denial and anti-access (AH/AD) potential and its growing ties with regional peers. It has been keenly involved in strengthening its strategic alliances including Japan, Taiwan, Vietnam, Philippines, Australia, Singapore and Indonesia thus, enclosing China from all angles. The allies are being supported and defended by US forces whenever they anticipate any danger from China. For example, in 1996, President Clinton sent two battle groups aircrafts to Taiwan when it was provoked against a serious Chinese threat. International observers have argued that the Washington’s aggressive posture and continuous presence in the region demonstrates the approaching new era of assertiveness and â€Å"containment† against China. Serious concerns have been raised throughout China in opposition to the refinancing strategy of US. To many defended and political analysts, the strategy is aimed against Beijing to contain its â€Å"peaceful rise† and to trigger insecurity within the region. Washington is interested to strengthen its influence and to maintain its global dominance; therefore, it refers the â€Å"pivot or refinancing† approach as a general strategy targeting the entire globe and not specifically China. Towards Refinancing: It has been acknowledged that the refinancing strategy is actually refinancing the ruder of security in Asia since the policy holds a burden-sharing feature aimed at budgetary cut and being stuck in other global crisis, Washington is persuading its alliances to do the utmost to protect their lands while assuring them support in case of any assault from the Chinese side. In fact, refinancing is a deliberate shift from wars of Africa and Middle East to maritime disputes in East-Asia. US have decided to keep itself focused while deploying an enormous amount of its assets and resources in CSS and Asia-Pacific. A lot of American combat ships, destroyers, submarines and raisers can be found while having military bases in almost all allied states. Washington is keen to have its influence in Hawaii and Guam and also to conduct a training program of over 2000 marines in Australia, its trustworthy ally. It would not only permit the US to enjoy â€Å"freedom-of-navigation† but would also enable it to counter Chinese (AH/AD) capabilities within the region. However, the budgetary cuts have imposed restrictions on engaging more troops and weaponry. Amongst the other ambitions of Beam’s regime lies extensive investment in Asia to line-up the country resources with long-term financial interests. The attraction is the Asian markets which could produce Jobs in the US and could help recover the slumped economy. The key is the regional stability where Washington’s continuous role is required to tackle any aggression. A lot of time is being spent by the US government, armed and naval officials in Asia that demonstrates how much focused they are on the very region. The engagement of Washington with SEAN countries and its eagerness to participate in SEAN summits each year signal its enthusiasm of being a decisive player of the region. It is interested both in assuring its military resent and cooperation not only amongst its allies but also with China since the latter’s assistance is much needed to uphold the status-quo. Moreover, the SEAN countries require â€Å"balance of power† within the region while their alliance with US is a major step towards refinancing against China’s might. Towards Refinancing: Elements and Objectives The rebalanced remains a multi-faceted, extensive and rather much celebrated policy initiative. Politically speaking, three elements of US refinancing strategy have been figured out that includes defended, financial and diplomatic aspects. L. Security Aspect: The recent adjustments in the US defensive posture reveal the importance of the element of security for the only global hegemony. Washington is aggressively shifting its extensive military potentials from other targets to one platform that encompasses the entire Asia-Pacific region thus, reshuffling its defensive arrangements to ensure a much broader presence of the US armed forces to counter any possible belligerence. This incorporates the highly sophisticated military dispersion in Philippines and Australia and also to other regional allies, thereby guaranteeing an enhanced coercive amalgamation within the region. II. Financial Aspect: The refinancing strategy also involves an intention to enhance trade and economic schemes amongst the US and its partners in-order to foster a trustworthy environment. For this purpose, an idea of Trans-Pacific Partnership (TAP), a free-trade accord, has been put forward that currently contains US and eleven other players but excludes China. Moreover, the financial aid to Asia-Pacific allies has also been doubled. Ill. Diplomatic Aspect: The pivot has witnessed heightened diplomatic and military engagement of US high-profile officials in Asia-Pacific. The agenda involves monitoring US-China hostility and promoting trust-building cooperation amongst the two global giants. Keeping into account the US stakes in the region, a number of objectives compliant with American strategic concerns have been drawn out. The central intention, as discussed earlier, is balancing and countering China while the other objectives revolve around it. L. Constructing a Sense of Justification: Since Washington is currently preoccupied in War-on-Terror, it requires a good reason to pull out its resources from the other regions to Asia-Pacific. The recent phenomenal mom of China has provided US that Justification where it feels itself bound to balance and to defend the land from any aggression. II. Strengthening Alliances: Another objective places the strengthening and reinforcing the strategic alliances as the foremost goal of the US. The idea is to reassure the Asian partners its presence whenever they feel threatened especially by China. Ill. Peaceful Resolution of Regional Disputes: The non-violent resolution of Asian disputes is in the American core interests. The US is very much concerned regarding the solution of China- Taiwan tension and Korean Peninsula. It is keen to imply diplomatic efforts to ensure regional securities. Another objective involves the denationalization and non- proliferation of North-Korea in-order to guarantee peace and protection. ‘V. Incorporating Rising Powers: Another objective involves the integration of emerging China into contemporary global order. Keeping into consideration China’s economic and military boost, it is vital for the US to make Beijing act as a mature and responsible regional stakeholder. V. Multilateral Commitment and Tackling Non- Traditional Dangers: The strategic alliances are the building-blocks for collaboration against security threats faced by the region whether it be extremism, dangers from climate change, infectious diseases, nuclear proliferation or natural calamities. Such an alliance provides a basis for trust-building and cooperation to tackle Chinese rise. US Refinancing: â€Å"Hub-and-spoke† Vs. â€Å"Spoke-to-spoke† Strategy Washington perceives itself as a decisive and dominant Pacific might where the major part of its foreign policy revolves around shielding and protecting Eurasia from any possible aggressor. The Beam’s â€Å"pivot to Asia† is merely a reflection of American obsession with the region. Moreover, the resultant upshot of World War-II paved way for an undeviating armed presence of US within and around the Asia-Pacific. The US grand strategy involves two options I. E. Over tactics and over posture. These strategic options enable the US to either espouse a forward military posture by having its global premeditated bases or to engage selectively with discerning partner states in pursuit of its national interests. The desertion of Soviet Union had placed China as the only adverse competitor for Washington, a military giant against which America evaluates itself both economically and militarily. In fact, Beijing is powerful enough to give a considerably tough time to the only super power over the upcoming couple of decades since its defended budget and GAP is likely to surpass those of Americana. Moreover, assessments confirm that as compared to Nazi Germany or Soviet Union, China is a more challenging and highly capable antagonist having the potential to compete US economic boost. Though Beijing believes in â€Å"peaceful rise† but the threat of a serious clash amongst the two strategic giants remains high as Washington is much concerned over China’s growing strengths. The upcoming 30 to confront the Chinese interests. US, therefore, crave to curb China before such a scenario occurs. For the very purpose, US is eager to conduct Air-Sea battle possessing the potential to hit deep inside the Chinese terrain in-order to perturb China’s AH/AD aptitude. It is not only politically acrid but also militarily precarious. Hub-and-spoke† Strategy: Containing Soviet Union and Defeating Communism The cessation of World War-II had witnessed some crucial changes within the political environment especially the metallization of â€Å"hub-and-spoke strategy’, a US grand sign to assemble alliances throughout the globe to guard its immediate interests against any challenger. The only perceptible contender at that time was Soviet Union, former US SR. The â€Å"hub-and-spoke design† acquiesced America to create close bilateral diplomatic and military links with core allies to offer effective deterrence against Soviet rise in Asia. The strategy involved a chain of Joint defended agreements devised at the peak of Cold War with allied states. Three of such treaties were signed in 1951, where the first one involved Philippines while the second incorporated a relater agreement amongst US, New Zealand and Australians. The third entailed a bilateral agreement between US and Japan that enabled America to have its military bases for defensive measures within Japanese territory. Thailand, South Korea and Taiwan also followed the suit. These defended treaties provided security assurance by America against Soviet’s threat. The â€Å"hub-and-spoke† strategy, also known as San- Francisco system, had defined the US presence in Asia-Pacific since sass’s. The salient characteristics of this system included Intense network of mutual alliances Nonexistence of multilateral defended structures A strong lop-sidedness in alliance relation both in economy and security Special preference to Japan Easy access to US markets Similar to â€Å"pivot to Asia†, the alliances were framed to balance the perceived risk against the then US competitor, USSR. The formulation of SEATS (South-East Asia Treaty Organization) back in 1954 was an evident demonstration of the said strategy where eight states signed the agreement for mutual defended against communist states of USSR and China. The member states incorporated Pakistan, Philippines, Thailand, Australia, New Zealand, France, United States and United Kingdom. The ore focus during the entire Cold War rested on shared defended against global communism, particularly against Soviet Union since the political upshot of World War-II reinforced the competition between East versus West. The obvious differences in the strategic thinking and contradictory interests brought the US and Soviet Union at the verge of war. Being a capitalist society, America felt itself threatened by communist expansion and the growing capability of USSR. However, as compared to today’s mighty China, Soviet Union despite of its broad presence in Asia was militarily lesser a Pacific power than the ISSUE. The USSR-China rivalry, on the other hand, provided further political advantage to Washington and its strategic allies to overpower the Soviet Union in Cold War. Consequently, the â€Å"hub-and-spoke† strategy, by having America as the leading hub while the rest of the allied state as the Spokes, remained the key aspect of security design within Asia-Pacific. Similar to what the world has witnessed during the Cold War, American strategic thinking has yet again turned towards another Asian competitor, China. However, the Washington’s containment policy has altered to some extent since the approach is Ewing transposed into a more disbursed alliance system marked as â€Å"Spoke-to-spoke† strategy. Keeping in view its financial condition, America is encouraging its partners to share its burden of safeguarding Asia. Increased global military trade, armed exercises and training with different stakeholders could be seen within the region to build the ability to challenge Chinese might. US is not only facilitating its regional allies to develop their own defensive system but also provoking them to cooperate with each other in an effort towards opposing China. The term â€Å"Spoke-to-spoke† refers to the new strategy that focuses on â€Å"Spokes† and to the â€Å"Hub†; America, being the facilitator and inciter, leads its alliances to cooperate with itself and amongst each other in-order to share the load of balancing China’s rise. Being highly anxious over China’s power, Tokyo is playing the dominant role in furthering this containment policy and has established closer ties with various states. Moreover, Japan is enthusiastically involved in developing strategic links especially with Philippines and Vietnam, two extreme regional opponents of China. Similarly, Vietnam is also building good strategic ties with Washington to offset Chinese might. Australia, in 2012, has conducted military exercises with Japan thus, collaborating in maritime affairs. South-Korea, on the other hand, is strongly committed to Join hands with US to contribute a leading role in criticizing the region. Though American leaders often reject it, but US military has maintained an aggressive posture devised with an intention to bring China’s maritime commerce at jeopardy. Its armed forces are placed in such a way that could intimidate Beijing supply lines in CSS region thus threatening Chinese economy. Keeping into count China’s reliance on sea-lines, Washington is keen to exploit this dependency by provoking its alliances while Beijing historical territorial tensions with its neighboring states has put China on a relative disadvantage. America has its strategic bases in almost every partner state. As more as 100,000 US military personnel are deployed in both South-Korea and Japan while 2500 submarines are present in Australia. Likewise India, China’s genuine Asian competitor, has also partnered with Washington in-order to challenge Chinese rise. US is interested in containing China from all dimensions through alliance structure. Having the most powerful Navy, America enjoys good working ties with regional opponents of China thus maintaining defended pacts with five Asia-Pacific powers. However, the alliances are not only formulated to contain China but also are helpful in curbing global terrorism. The significant aspects of the containment strategy include; a symmetrical network aimed at refinancing the defended burden in Asia-Pacific, introduction of multilateral defended structures like SEAN e. T. C, broadening the scope of defended relations between Washington and allied partners and Preference to each regional ally . How to cite Us pivot to asia, Papers

Complete Guide to Business Risk Management

Question: Discuss about the Complete Guide to Business Risk Management. Answer: Introduction: Auditing is a strategic management approach that plays a key role in ensuring that a company is moving towards achieving its goals and objective as well as improving its performance standards. Auditing and assurance practices are outlined as the general and independent examination of statutory records, documents, asset, and books of accounts of a company to establish if the financial plan and also the non-financial disclosures square measure presenting a real and honest read of a company(Arens, et al., 2012). The main aim of conducting audit practices is to confirm that the book of accounts is correctly maintained as required by the international auditing and accounting bodies. The external audit activities are explained as the examination and securitizing the organization book, documents, and asset, this activity are normally carried out by the external auditor who is in charge of proving audit opinion which is relevant to the company operation. The findings of an auditor will determine the actions to be taken by the organization management while striving to improve their operations(Elder, et al., 2011). Clarke Johnson (CJI) is an organization that is projected to have provided excellence and brilliant services to Luxury Travel Holidays LTD (LTH), and a result, Luxury Travel Holidays LTD (LTH) has projected to give Clarke Johnson (CJI) another year of business partnering. Despite the fact that the two companies have been partnering, Clarke Johnson (CJI) independence will be affected to some extent, this implies that there are some threats that affect the independence of the external auditor(Eilifsen, et al., 2013). Self-interest threat could be a fatal issue that affects the independence of an external auditor. This threat is perceived once the auditor is often providing audit services to only one client. Luxury Travel Holidays LTD (LTH) has re-engaged Clarke Johnson (CJI) Company to supply their service just like the previous year(Johnstone, 2000). The aspect of self-interest forces the auditor to accept an offer to provide audit services, this is the perception of not losing the client, and this will affect the independence of external auditor since the client will provide different opinion which affects the opinions of the auditor(Jackson, 2016). The issue relating to the referrals from the client affects the independence of the external auditor. According to the study, Clarke Johnson (CJI) Company is an organization that has been providing audit services to Luxury Travel Holidays LTD (LTH); Luxury Travel Holidays LTD (LTH) could make many referrals to the auditor, and thus affecting the audit opinions of the Clarke Johnson (CJI) Company. The organizational management has a great impact on the audit opinions to be made by the auditor, the top management could influence this opinions since they will force the auditor to utilize the referrals made(Kachelmeier, et al., 2014). Luxury Travel Holidays LTD (LTH) and Clarke Johnson (CJI) Company have been partnering, the top management of the Luxury Travel Holidays LTD (LTH) could refer the accounting department to make some irrelevant changes to the books of accounts, these changes may affect the opinion to be given by the auditor(Knechel Salterio, 2016). Safeguards to threats that affects the independence of an auditor The threats that affect the independence of external auditors are outlined to influence the activities and the conclusion to be made by an auditor. Multiple referrals from the top management, self-interest and the familiarity and complacency are the examples threats derived from the case study(Bell, et al., 2001). When an external auditor is hindered, the audit opinion which is used during the drafting of the could be appropriate to the findings of the auditor the audit opinion forms the basis of the audit report. Self-interest is a critical threat which implies self-consideration of an individual, the top management may decide to provide ideas to the auditors, these ideas could affect the conclusions of the external auditor(Knechel Salterio, 2016). The Multiple referrals reflect those referrals that are made by departmental managers or the top managers of the organization, where these referrals comprise referring the auditor to use specific books of accounts or to use information f rom one of the organizational employees(William Jr, et al., 2016). Self-interest issues affecting the independence of an auditor implies impact of making referrals and suggestions to the auditor, some of the managers in an organization may have messed up with the company policies, assets and books of accounts so they are compelled to make suggestions to the auditors(Ricchiute, 2001). On the other hand, some of them may want praises from board of directors so they are forced to make suggestions to the auditors, and thus affecting the drafted report. Clarke Johnson Company is encouraged to reduce the interaction with the clients, they need to make opinion based on the immediate findings of the company operations. Multiple referrals from Luxury Travel Holidays LTD (LTH) has a direct impact to the audit opinion to be provided by Clarke Johnson Company. Luxury Travel Holidays LTD (LTH) has re-engaged Clarke Johnson Company to continue providing audit services, Chris is the top manager of Luxury Travel Holidays LTD (LTH)(Gay Simnett, 2000). Chris could make suggestions and recommendation to the auditor, this affects the independence of the auditor. Clarke Johnson Company is required not to accept any suggestion or recommendation made by any member of the organization, auditor need to take caution of such issue so that they could provide appropriate audit opinion and report. Audit planning is an important area of auditing practices, it primarily conducted at the beginning of the auditing process to ensure that the appropriate attention is conducted to the important areas of the company(Jackson, 2016). The audit is the risk which implies the financial record of the enterprise are devoted to being materially incorrect although the audit report provided by the auditors states that the financial statements of the company are free of any misstatement. The primary purpose of encouraging the auditors to have audit planning to so enhance that the important areas and documents of the company are critically scrutinized, by conducting the audit planning the auditors are able to identify the potential audit problems that could affect the audit process(Knechel, 2007). Auditors are encouraged to ensure that they develop an audit plan and implement policies stated since it will allow them to expose their professionalism during the auditing process. During Audit planning, the Auditor is obligated to ensure that they are ready for audit planning risk that may affect their operations(Eilifsen, et al., 2001). Crampton and Hasaad is encouraged to develop the audit planning which will allow them to exhibit their professionalism during their auditing process. Mining Supplies LTD (MSL) is a multinational corporation that operates in the international market. It operates in China, Europe, and U.S market. Mining Supplies LTD (MSL) is about to conduct its 2015 annual general meetings the meeting will allow the provisions of 2015 financial reporting. Mining Supplies LTD (MSL), Crampton and Hasaad are encouraged to develop the audit plan that will give the exhaustive approach of audit timing, extent and strategies that will ensure that the audit work is completed. Mining Supplies LTD (MSL) is a company that performs its services outside its market, operating in an international market is bounded with allot of risk(Kachelmeier, et al., 2014). The international business affects the activities of multinational companies, the international business concepts are perceived to have the great impact on the auditing process. An organization that operates in an international market is encouraged to deliver their products and services in time, they are also mandated to implement the strategic chain management measure that will allow the company to operate easily in the international market(Eilifsen, et al., 2001). Mining Supplies LTD (MSL) is a company that operates its sales in the large market, Crampton and Hasaad Company on other hand is an audit company that provides its services to international companies including the Mining Supplies LTD (MSL). While mitigating the logical risk that affects the audit planning of an auditor, the companies are encouraged to implement on the supply chain mythologies, this will reduce the negative factors relating to political unrest and other fatal factors. However, the companies are encouraged to provide exclusive license which is guided by the substantial agreement between the two companies(Lyon Maher, 2005). Decline in product demand risk Mining Supplies LTD (MSL) is an international corporation that is involved in producing the engineering equipment to its clients, the company products are internationally recognized. Declining in producing the equipment affects the activities of the company; reduction of equipment produced will definitely affect the profitability making of the company. Demand risk implies the reduction in the demand for the product, the declining demand for the engineering equipment may be because of stiff competition and high pricing of the equipment(Arens, et al., 2012). While mitigating the risk associated with the products and demand risk, the company is encouraged to ensure that conducts market research in order to determine the aspects that affect their business operations. Mining Supplies LTD (MSL) and Crampton and Hasaad are the business organization that operates in international business market. The legal risk reflects the impacts of the regulations and rules that are drafted by the existing governments, the companies that operates their business activities above the existing rules and regulation are encouraged to observe the law of the land(Messier, 2014). Legal risk affect the operation of Mining Supplies LTD (MSL) and Crampton and Hasaad since they operate in different markets, rules and regulations in the different market keep own changing and thus affecting the business activities of an organization. For instance, both companies are perceived to work in US and Europe markets, U.S Common Laws provides some policies that need to be observed by the companies operating in that particular market, on the other hand, European Civil Laws provide regulatory measures to the companies operating in the European market(Eilifsen, et al., 2001). Financial risk is those factor that affects the financial operations of an organization. Companies that operates in the international market are faced with many risks including the financial risk. Crampton and Hasaad Company and Mining Supplies LTD (MSL) are operating companies they have diverse their business activities. The diversification of the business activities will bound the companies into financial risk, economic factor is the concepts, which affects the financial operation of an international company. For instance, the US dollar is a currency that is used in the international market, the down-turning of this currency affect the business activities of operating companies. The inherent risk are the risk that involves material misstatement in the financial records and asset document of the business company, the risk arises as a result of errors and emission made by the company accountings. The inherent risk is perceived to affect the organizations that operate in the international market, these companies involves themselves with the inherent risks when they failed to make relevant estimation as well as when they need to make complex transactions(Eilifsen, et al., 2001). The control audit risk implies the risks that relate to the material misstatement in the financial statement, this misstatement is arising due to failure to implement the control measures of the company. Crampton and Hasaad Company and Mining Supplies LTD (MSL) are encouraged to adequately advised to have the relevant internal control system that will prevent and detect the potential errors and frauds. The control risk are perceived to be high, especially when the business entity is not having the internal control measures(Jackson, 2016). The detection risk is that risk that arises when the auditor fails to detect the material misstatement in the financial records, and asset of the company. In order to operate with less limiting factors, Crampton and Hasaad Company is encouraged to apply the audit process measures this will allow the company to automatically detect material misstatements in the financial statements and asset documents of Mining Supplies LTD (MSL). While mitigating the detection risk, the audit firm is advised to increase the number of the sample transaction taken during the audit process(Sadgrove, 2016). References Arens, A. A., Elder, R. J. Mark, B., 2012. Auditing and assurance services: an integrated approach:. Boston: Prentice Hall.. Bell, T. B., Landsman, W. R. Shackelford, D. A., 2001. Auditors' perceived business risk and audit fees: Analysis and evidence.. Journal of Accounting research,, 39(1), pp. 35-43. Eilifsen, A., Messier, W. F., Glover, S. M. Praw, 2013. Auditing and assurance services.. s.l.:McGraw-Hill.. Eilifsen, A., Knechel, W. R. Wallage, P., 2001. Application of the business risk audit model: A field study. Accounting Horizons. s.l.:s.n. Elder, R. J., Beasley, M. S. Arens, A., 2011. Auditing and Assurance services. s.l.:Pearson Higher Ed.. Gay, G. E. Simnett, R., 2000. Auditing and assurance services in Australia.. Sydney: Mcgraw-hill. Jackson, R. A., 2016. Business at risk: keynote speakers for this year's IIA International Conference identify emerging risks facing organizations. Internal Auditor,. In: s.l.:s.n., pp. 40-46. Johnstone, K., 2000. Client-acceptance decisions: Simultaneous effects of client business risk, audit risk, auditor business risk, and risk adaptation. Auditing:. A Journal of Practice Theory, 19(1), pp. 1-25.. Kachelmeier, S. J., Majors, T. Williamson, M. G., 2014. Does Intent Modify Risk-Based Auditing?. The Accounting Review. s.l.:s.n. Knechel, W., 2007. The business risk audit: Origins, obstacles and opportunities.. In: s.l.:s.n., pp. 383-408. Knechel, W. R. Salterio, S. E., 2016. Auditing: assurance and risk. s.l.:Routledge. Lyon, J. D. Maher, M. W., 2005. The importance of business risk in setting audit fees: Evidence from cases of client misconduct.. Journal of Accounting Research, 43(1), pp. 133-151. Messier, w. f., 2014. An approach to learning risk-based auditing.. Journal of Accounting Education, 32(3), pp. 276-287. Ricchiute, D. N., 2001. Auditing and assurance services.. s.l.:South Western Educational Publishing.. Sadgrove, K., 2016. The complete guide to business risk management.. s.l.:Routledge. William Jr, M., Glover, S. Prawitt, D., 2016. Auditing and assurance services: A systematic approach.. s.l.:McGraw-Hill Education.