Test for Business English

Test 1 READING 1 hour PART ONE Questions 1-8  · Look at the statements below and at the five extracts on the opposite page from an article giving advice to people setting up a business.  · Which extract (A, B, C, D or E) does each statement (1-8) refer to?  · For each statement (1-8), mark one letter (A, B, C, D or E) on your Answer Sheet.  · You will need to use some of these letters more than once. 1. You should plan ahead in case a founder of the company chooses to leave it. 2. A company which is expanding today may not always continue to do so. 3.The distribution of equity among the founders can affect the smooth running of the business. 4. Your function in the organisation is different from that of the other managers. 5. Your method of running the business will have to be modified as your company develops. 6. Your business may evolve into a form that you are not satisfied with. 7. Delay offering employees a financial stake in the company. 8. You need to identify your per sonal strengths and weaknesses. A So you think you're an entrepreneur, and you want to start up a company. First, be sure you're really an entrepreneur, and not an inventor.Inventors come up with ideas, entrepreneurs make a business out of them: it's important to know where your abilities lie, as inventors can fail miserably at running a business. Also, you need to be confident that you can adapt your management style to meet new demands if your company is a success. Leading the management team of a growing business is very different from leading a newly founded company. B If your company proves successful, it will probably change out of all recognition, and may seem to possess a life of its own, with institutional shareholders, regulators and employees to consider as well as customers and bank managers.That is the time to consider how far the aspirations of the business you founded still mirror your own. If they have diverged widely, and you feel you have built just the sort of bus iness that you perhaps tried to escape from in the first place, it may be time to leave. C Bringing an idea to life requires an organisation. If you are going into business with your friends, make sure you treat them as professionally as you would your arms-length business partners, because the odds are that you'll fall out with them.It may not seem important at the start, but it will strengthen the company if you ensure that its constitution documents are designed with your specific business and circumstances in mind, and that they clearly establish what will happen in the event of a withdrawal from the business by one of the founding shareholders. D Think carefully about the capital structure of the business. You could be storing up a problem for the company in the future – for example, by allocating shares to founders in a way that could lead to a stand-off if they refuse to see eye to eye on key issues.Similarly, when you eventually recruit new senior team members, think carefully about what to offer them. Don't give away share options too early. As a rule of thumb, cash is sufficient reward for knowledge and skill. Keep equity up your sleeve for rewarding commitment. E As your business grows, you need to keep the right balance between management control and entrepreneurial spirit. Too much control, and the business will ultimately cease to grow. Too little, and growth could be unsustalnable.You'll need to employ managers, but remember that their job is to build the infrastructure to underpin a business that until now may have run on the basis of your salesmanship and excitement. The risk is to bring in managers who are too much like you, without the necessary experience of nursing a newly founded business through its evolution. PART TWO Questions 9-14  · Read this text taken from an article about marketing.  · Choose the best sentence from the opposite page to fill each of the gaps.  · For each gap (9-14), mark one letter (A-H) on your Answer Sheet.  · Do not use any letter more than once.How effective is your marketing? Gone are the days when companies had departments full of staff whose role nobody under- stood. Today we are all accountable and have to be able to demonstrate the value of our contribution to our businesses. And rightly so. But when it comes to marketing, what is effectiveness, how do you measure it, and why is its measurement so important? Businesses are starting to recognise the key marketing questions. Are we providing the right products for the right people at the right price? Are our brands better than those of our competitors? 9) That's because marketing is not the fluffy stuff that can be axed when the going gets tough – it is the essence of business. So if marketing is important, it follows that it pays to know if yours is working. The first stage in the process is understanding your current position. How successful is your brand today? What is your market share? You should equip yourse lf with some sound facts and figures on which to base your conclusions. (10) It could be simply to boost sales. You may want to reinforce your leadership in a market or trounce a competitive brand.Influencing future profitability, possibly by building a short-term brand share, may be a priority. A clear objective is essential. But how do you know if your marketing is achieving your goals? (11) Their success is not just related to how many boxes leave the factory. Effectiveness may not be tangible. It may be financial, it may not. ‘The brand' is an intangible asset, but it is now seen as an import- ant one. Quantifying the value of an intangible asset is a difficult, but not impossible, task. It is also necessary to evaluate both long-term effectiveness and the short-term outcomes of any campaign. 12) But the care of a brand is a marathon, not a sprint, and it is important not to lose sight of the long-term consequences. Choosing the right measurement tools to evaluate a campai gn is another important issue. (13) The accuracy they thus ensure should be consistent over time and correspond to the wider objectives of the business. Ultimately, marketing must deliver profit. The essential debate should no longer be about the importance of marketing, but what we should do to measure its effectiveness, and what measures will ensure survival. 14) But to others it is likely to be a controversial issue – and one which can produce responses leading to widely different directions for their enterprises. A Having done that, next comes establishing what it is that marketing activities should be achieving. B Because of this, you may want to generate return on investment, perhaps by raising the quality of your brand. C This shift in focus will be taken as read by the most successful businesses. D Addressing such issues should mean that profits take care of themselves.E Concerning the latter, it may be tempting to be seduced by efforts that yield quick results and sa tisfy investor pressure for immediate returns. F These should be precise and based on empirical data. G Good strategies are not necessarily linked to production or sales figures. H Today we are all accountable and have to be able to demonstrate the value of our contribution to our businesses. PART THREE Questions 15-20  · Read the following article about recruitment in the UK and the questions on the opposite page.  · For each question (15-20), mark one letter (A, B, C or D) on your Answer Sheet. graduate recruitment has a growing role.But companies need to know whether their recruitment staff who interview candidates for jobs really know what they're doing. Carl Gilleard, chief executive of the Association of Graduate Recruiters (AGR), acknowledges that in a perfect world, the people who recruit graduates would have been in the role for some time building up workplace knowledge. He says the reality is that the high turnover of graduate recruitment managers in most blue chips me ans there is little continuity in how companies operate. ‘There's the difficulty in maintaining important contact with university careers departments, for example,' he explains. You need a depth of understanding to appreciate where the company is coming from and how it's progressing. ‘ We can identify two specialisms within the recruiter's role. Those that work on the recruitment and selection side need traditional human resources (HR) skills such as good interviewing technique, observation, common sense, objectivity, patience and listening skills. But increasingly there are those who take a strategic view and look more widely at how their company is represented in the marketplace. It's a clear advantage if you can identify with your target audience.Many young members of middle management are seconded into HR for a year because their firms feel they can identify with job-seeking graduates. Yet in an industry that has been revolutionised by the internet, privatised career services and rocketing numbers in higher education, it is questionable how relevant these managers' experiences are. Some high-fliers see a secondment to HR as a sideways move; a firm's HR function might not carry the same kudos as, say, the finance department, although obviously the recruitment and retention of staff is of crucial importance.Georgia de Saram, specialising in graduate recruitment at a law firm, is one of a new breed of young dynamic recruiters who see HR as their vocation rather than a transitory career move. ‘I was attracted to the profession because I enjoy working with people and it's an obvious follow-on from my anthropology degree,' she says. ‘In this capacity, you get to know people and they know you even though they might not know other people in the firm. ‘ As a recruiter, she sees herself as the interface between graduates and the firm that's looking to attract them?It's such a tug of war between law firms for the best trainees – o ften they'll turn you down in favour of an offer they've received from elsewhere. You need to be good at marketing your firm, to know what interests graduates and how you can reach potential employees, whether that's through virtual law fairs or magazines. ‘ A recent AGR survey suggests that the sectors in which there is less turnover of graduate recruitment managers are more successful in recruiting the graduates they want.The legal sector's sophisticated understanding of the market, for example, means they manage to recruit exactly the right number of trainees despite intense competition and thousands of applications. The people recruiting seem to build up a specialism and then pass on their knowledge and expertise to those new to the graduate recruitment sector. Jackie Alexander, an HR partner at PricewaterhouseCoopers, feels that HR professionals are finally reaching board level and receiving the sort of acknowledgement they deserve. They are judged by the value they add t o the business,' she says, ‘and, as a professional services firm, the right people are our biggest asset. ‘ As Georgia de Saram points out: ‘From our company's point of v. iew, if I can't establish a rapport with a candidate and bring out their best, it might not be just their future but also ours that is at stake. ‘ 15. According to Carl Gilleard, many recruiters lack A. detailed knowledge of their sector. B. appropriate academic qualifications. C. understanding of graduates' expectations. D. experience of the companies they work for. 16.What change in the recruitment process is mentioned in the third paragraph? A. Recruitment staff are re-training. B. Broader approaches are being adopted. C. Traditional abilities are being given less value. D. Different interview processes are being used. 17. On what grounds are certain managers seconded to HR departments? A. It is believed that they will relate to potential recruits. B. It is thought that they will benefit most from new developments. C. It is assumed that they will be able to apply specialised knowledge. D. It is expected that they will take advantage of new promotion opportunities. 18.Which of the following areas does Georgia de Saram mention as an aspect of her work? A. representing her company effectively to its recruits B. increasing recruitment numbers at her company C. encouraging a wide range of company recruits D. influencing her company's recruitment policy 19. What was revealed about law firms in a survey? A. They are competing more effectively than before against other sectors. B. They prefer to retain trainees for extended periods wherever possible. C. They have managed to employ particularly knowledgeable HR staff. D. They appeal to those HR managers who are keen for promotion. 20.What point is made about recruitment in the final paragraph? A. New levels of qualification are being developed for it. B. It is now being perceived as key to increased profitability. C. Higher numbers of managers are being attracted to it. D. It is becoming central to a business's survival. PART FOUR Questions 21-30  · Read the article below about job satisfaction.  · Choose the correct word to fill each gap from A, B, C or D on the opposite page.  · For each question (21-30), mark one letter (A, B, C or D) on your Answer Sheet. How important is job satisfaction? At its most basic, a job is just a collection of tasks and duties.An employee's enjoyment of his or her job will thus (21) depend upon whether or not he or she is happy with the particular mix of tasks and duties (22) to that position. Naturally, each and every member of staff is different – some employees want to do easy, (23) tasks without any responsibilities at all, whilst others prefer challenging, varied ones and are pleased to accept any additional responsibilities offered to them. Of course, with a job there are more (24) in play than this: work conditions, pay, working relations and future prospects are (25) too.Nevertheless, tasks and duties are the central feature, and should therefore be considered as a separate (26) in themselves. So, how important is an employee's enjoyment of his or her individual (27) of tasks and duties? Most business owners and managers would (28) that it is very significant indeed. If a member of staff considers his or her tasks and duties to be too easy or unchallenging or, in contrast, too diverse or irksome, then he or she will feel dissatisfied, and all the inevitable knock-on effects will (29) themselves – absences, lateness, reduced work-rate and performance, conflict, low morale, or even resignations.Thus it is important that staff are well suited to their employment, that jobs are improved as far as possible and redesigned as and when necessary – all to (30) that your employees enjoy what they do. 21. A. highly B. largely C. extensively D. widely 22. A. devoted B. intended C. identified D. allocated 23. A. customary B. habitual C. usual D. routine 24. A. pieces B. roles C. factors D. parts 25. A. connected B. relevant C. appropriate D. related 26. A. result B. effect C. issue D. outcome 27. A. et B. order C. rank D. line 28. A. insist B. accentuate C. reiterate D. assent 29. A. uncover B. demonstrate C. unmask D. manifest 30. A. confirm B. ensure C. convince D. assure PART FIVE Questions 31-40  · Read the text below from a brochure.  · For each question (31-40), write one word in CAPITAL LETTERS on your Answer Sheet. Paragon: great business space A new concept for the twenty-first century, Paragon is a totally unique showpiece development of high-quality office and call centre buildings, hotel and leisure facilities.Many cities find (31) increasingly difficult to allocate office space, but the city of Wakefield is already ahead (32) the game with Paragon. Paragon offers an extensive parkland setting with low-density buildings, and room to expand in the future. Yet, (33) the vast majority of bu siness parks, Paragon has not been exiled to the distant edges of the city. Instead, this large site is only I km from the centre of Wakefield. This offers massive advantages: employees can easily walk or cycle to work, saving stress and pollution, and significantly cutting (34) on commuting time.There is (35) more driving along the motorway to distant outposts of business empires for the Paragon worker. But Paragon's location sacrifices nothing (36) terms of communications. It is perfectly placed for road and rail networks. A further attraction of Wakefield for Paragon is the ready avail- ability of a skilled workforce. (37) are more than 233,000 people available for work within an hour's journey, and an enormous catchment population of 20 million within two hours' travel.The city has a long history (38) an administrative centre, and its recent success in attracting top-name companies is evidence of its solid business credentials. Figures from the developers suggest that up (39) 5, 000 jobs could be available in the initial phase of its development, with more to follow, making it (40) of the most significant areas of employment in the region. PART SIX Questions 41-52  · Read the text below about IT training.  · In most of the lines (41-52) there is one extra word. It is either grammatically incorrect or does not fit in with the sense of the text.Some lines, however, are correct.  · If a line is correct, write CORRECT on your Answer Sheet.  · If there is an extra word in the line, write the extra word in CAPITAL LETTERS on your Answer Sheet. IN-HOUSE IT TRAINING One of the most important things you should consider before implementing an IT training program is whether that the content is current, accurate 41 and easily be understood by trainees. In general, you should look 42 for a training program that has done an affiliation with industry 43 leaders. For example, a course on Windows 2000 should at least 44 be pproved by Microsoft. A course that has bee n co-developed in 45 this way ensures so that trainees will study relevant and correct 46 information. Also, take into your account the availability of practical 47 exercises. Many off-site, instructor-led programs which provide learning 48 labs for trainee practice, but take good on-site training courses can 49 include hands-on simulations that resemble to an actual networking 50 or desktop environment. This supply allows trainees to interact with 51 the programs without crashing down a live system.It also means that 52 trainees can study while at work so that less time is going missed, and production schedules are not interrupted. WRITING 1 hour 10 minutes PART ONE Question 1  · The graph below shows the turnover for three kinds of retail outlet, all owned by the same company, during a three-year period.  · Using the information from the graph, write a short report comparing the changes in turnover in the company's three types of outlet.  · Write 120-140 words. [pic] PART TW O Write an answer to one of the questions 2-4 in this part. Write your answer in 200-250 words.Question 2  · Your company would like to break into a new overseas market with your new range of sports goods. You have been asked by the Marketing Director to investigate ways of doing this.  · Write a report for the Marketing Director, including the following information:  · how you carried out your research into the market  · the existing competition  · your target customers  · ways of promoting the products in the new market. Question 3  · Recently you have become unhappy with a service that has been provided to your company for a number of years. You have decided to write a letter of omplaint to the service provider.  · Write your letter to the company that provides the service, including the following information:  · which service you are complaining about  · why you are dissatisfied with the service  · what action you want the service provider to take  · what you will do if there is no improvement in the service. Question 4  · Your Managing Director is considering how to improve the company's internal communications, and has asked you to write a short proposal giving your views on communication within your department.  · Write the proposal for the Managing Director: describing how communication currently takes place within your department  · pointing out the weaknesses of the present situation  · recommending one or two improvements that should be made LISTENING Approximately 40 minutes (including 10 minutes' transfer time) PART ONE Questions 1-12  · You will hear the founder of a company called Manshee talking to business students about its development.  · As you listen, for questions 1-12, complete the notes, using up to three words or a number.  · After you have listened once, replay the recording. THE DEVELOPMENT OF MANSHEE 1.The speaker had a problem finding †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. for his compute r. 2. Initially, the speaker bought from †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ businesses. 3. Four years after its launch, Manshee's †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. was ? 6 m. 4. The company grew rapidly without having †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 5. The main factor in the company's decisions was the current month's †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 6. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. fell as a result of competition. 7. Manshee's consultants work mostly with †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 8. The consultants made Manshee's directors put their future †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. in order of priority. 9.The directors first focused on †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. and financial goals. 10. What the speaker feels was particularly valuable was the †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ of the consultants' advice. 11. Manshee classifies it s customers on the basis of their †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 12. The most successful division is the one working with the †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. sector. PART TWO Questions 13-22  · You will hear five different people talking about problems and responses to them in the companies where they work.  · For each extract there are two tasks. For Task One, decide which problem each speaker mentions from the list A-H.For Task Two, decide which response the company made to the problem from the list A-H.  · After you have listened once, replay the recording. Task One – Problems  · For questions 13-17, match the extracts with the problems, listed A-H.  · For each extract, decide which problem for the company is mentioned.  · Write one letter (A-H) next to the number of the extract. A The directors' experience was narrow. B Certain products went out of fashion. C There was a reliance on poor-quality supplies. D There were conflicts between directors. E Too many new products were launched at the same time.F Reasons for previous success were misunderstood. G There was a failure to understand economic trends. H Some advisors made poor recommendations. 13. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 14. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 15†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 16†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 17†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Task Two – Responses  · For questions 18–22, match the extracts with the responses, listed A-H.  · For each extract, decide which response the company made to the problem.  · Write one letter (A-H) next to the number of the extract. A Large severance payments were made.B New shares were issued. C A takeover bid was accepted. D Low-cost products were introduced. E A partnership abroad was formed. F One division was sold off. G Some products were rebranded. H A cost reduction programme was introduced. 18†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 19†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 20†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 21†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 22†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ PART THREE Questions 23-30  · You will hear a discussion between two senior managers, John and Deborah, about an assistant manager, Colin, who has applied for a new post. For each question (23-30), mark one letter (A, B or C) for the correct answer.  · After you have listened once, replay the recording. 23. The new post is being created as a result of A. plans to change corporate culture. B. criticisms of management practice. C. change s to overall company structure. 24. What reason has Colin given for applying? A. to have a more challenging role B. to make full use of his qualifications C. to raise his profile within the company 25. John was particularly impressed by the way Colin A. treated a dissatisfied client. B. responded to an unreliable supplier.C. dealt with an inefficient member of staff. 26. What current strength of Colin's does Deborah commend? A. his analytical skills B. his product knowledge C. his flexible approach 27. On a recent sales trip, Colin succeeded in A. improving the terms of a contract. B. identifying a new method of selling. C. making a number of new contacts. 28. In what area did Colin excel during recent training? A. team working B. report writing C. prioritising 29. What does Colin's reference say? A. He expects too much of others. B. His confidence will grow in time. C. He sometimes lacks objectivity. 30.What support will the successful candidate receive? A. contact with an in-house advisory body B. performance appraisal meetings C. coaching from a consultant SPEAKING 16 minutes SAMPLE SPEAKING TASKS PART ONE In this part, the interlocutor asks questions to each of the candidates in turn. You have to give information about yourself and express personal opinions. PART TWO In this part of the test, you are asked to give a short talk on a business topic. You have to choose one of the topics from the three below and then talk for about one minute. You have one minute to prepare your ideas.A Customer relations: the importance to a company of reliable customer opinions of products B Staff development: the importance to a company of developing effective career plans for staff C Business strategy: how to maintain the confidence of company shareholders PART THREE In this part of the test, you are given a discussion topic. You have 30 seconds to look at the task prompt, an example of which is below, and then about three minutes to discuss the topic with your partner. Af ter that, the examiner will ask you more questions related to the topic. For two candidatesTravelling to Work Your company's location in a busy city centre means that staff often complain about the time taken to get to work. You have been asked to make some recommendations. Discuss and decide together:  · whether it would be better for staff to use public or private transport  · what the effects might be of allowing staff to work flexible hours. For three candidates Travelling to Work Your company's location in a busy city centre means that staff often complain about the time taken to get to work. You have been asked to make some recommendations. Discuss and decide together: whether it would be better for staff to use public or private transport  · what the effects might be of allowing staff to work flexible hours  · what other measures the company could take to deal with the situation. Follow-on questions  · Would you be willing to spend a long time travelling to work eve ry day? (Why? /Why not? )  · Should companies provide staff with financial assistance if they have long journeys to work? (Why? /Why not? )  · What do you think influences a company's decision to be located in a busy city centre? (Why? )  · What effect do you think technology will have in the future on where people do their work? Why? )  · What could be the long-term effects of changes in the hours people work and where they work? (Why? ) Test 1 Reading Part 1 1. C 2. E 3. D 4. E 5. A 6. B 7. D 8. A Part 2 9. D 10. A 11. G 12. E 13. F 14. C Part 3 15. D 16. B 17. A 18. A 19. C 20. D Part 4 21. B 22. D 23. D 24. C 25. B 26. C 27. A 28. A 29. D 30. B Part 5 31. IT 32. OF 33. UNLIKE 34. DOWN 35. NO 36. IN 37. THERE 38. AS 39. TO 40. ONE Part 6 41. BE 42. DONE 43. CORRECT 44. CORRECT 45. SO 46. YOUR 47. WHICH 48. TAKE 49. TO 50. SUPPLY 51.DOWN 52. GOING Test 1 Writing Question 1 Sample A The development of the turnover of FROZEN FOOD Ltd. The following report describes the chan ges in turnover by type of retail sector over the three years periods 2000 to 2002. In all three years the turnover made by supermarkets was the highest of all three retail outlets. Department stores remained the second greatest before small shops-outlets. The turnover reached by supermarkets increased steadily over the three years and was ? 80m in 2002. The turnover of department stores was? 50m in 2000 but fell to ? 35m in 2001. In 2002 it remained steady to the previous year.After a loss in 2001, the small shops-outlets reached again a higher level but could not reach the ? 30m turnover of 2000. Band 3 All the content points are included and, despite minor grammatical errors and several lexical errors, there is reasonable control overall. It is a well-organised answer with an adequate range of language and fits the descriptors for band 3. Sample B Below is a report on the changes in turnover for three kinds of retail outlet, owned by one company, over a three-year period. The ove rall highest turnover of eighty million pounds was obtained by supermarkets in 2002.On the other hand, the smallest turnover was made in small shops in 2001. Over the year 2000, a turnover of fifty million pounds was reached in department stores, whereas it then plumetted to about thirty-five million pounds in 2001 and maintained this position throughout 2002. The supermarkets turnover rose steadily from 2000, reaching its peak in 2002 with eighty million pounds. Clearly, small shops had the smallest turnover altogether. Thirty million pounds in 2000, a noticeable drop to twenty million in 2001 and a slight increase of five million in 2002.In conclusion, the highest results were achieved by supermarkets, followed by department stores and then small shops. Band 4 This answer shows an accurate and natural use of language with a good range of structures and vocabulary. The slightly awkward organisation and the minor omission of a starting point for supermarkets prevent it from being a band 5. Question 2 Sample C Ways of break into a new market. The aim of this report is to present some ideas of the actions to be taken in order to succed penetrating the new overseas market.First of all, it is fundamental hiring a well- known Marketing Research company in order to get all the information about the market of sport goods in that place. After that we need to know own competitors their strenghth and weaknesses, in that way we can find our posibilities and opportunities against them. The company have to build an diferencial advantage. Another important issued is our target customers, people interested in sports and health and also the kind of sports that it can be done in that place, it is vital information that the company need to know before go to the new market.For our brand, we need to be agressive in our publicity campaign, by TV, making promotions and offering discounts in first purchase. In conclusion, the company need to have the certainty that there are opportu nities in that market and then gain all the weapons to have a good performance with caracteristics differents from the competitors and good publicity. In short time become market lider in sports good. Band 2 This answer contains some irrelevance as the candidate has written a proposal rather than a report. This, combined with the number of errors, results in a band 2. Sample D Report concerning a new overseas market IntroductionThis report sums up the results of my investigation in overseas markets, according to what was demanded by the Marketing Director. Findings Staying a few weeks in this part of the World allowed me to collect precious information about the market, buying habits, competitors, and to gather complete figures and statistics. I could carry out a market research interviewing potentials consumers on the street or even in sports shop. Then I had the opportunity to test local competitors' products and to visit production premises. Furthermore, I analysed the data and f ound out two mains competitors, X and Y, who both shares half of the total market.The others competitors are small companies representing few percentage of global sales. Finally, teenagers are the biggest consumers. In fact, 30% of them buy regularly sports articles, while adults declare only buying once a year. Therefore, the main target profile would be a 15-year-old to 25-year-old male. Conclusions In my opinion, this market would be a great change for the development of the company and I then recommand breaking into it. Recommandations I suggest carrying out an advertisement campaign in order to make them know their is a new competitor.Then consumers are attracted by sales promotion like price reductions and I propose launching our products this way. Last but not least, we could starting offering three products to the price of two. Band 3 This is a generally well-organised answer with good use of cohesive devices. The candidate uses an adequate range of structure and vocabulary with a number of minor, mainly non-impeding, errors. Question 3 Sample E Dear Mr Smith, I am writing to express my concern about your poor delivery service. First and foremost, not only arrive the orders late, but they are also damage.Secondly, when we telephone your office to resolt the issues, the dutty person is always busy on the phone. Although his secretary takes our mesages and tells us that he is calling back, we never recieve his call. Finally, it is not surpriced to have problems with your invoices (suplements and extra-services which are inclueded in our contract with your company). Because of this, I have extra-cost in telephone calls and paper work. I will be grateful, if you do delivery the orders on time and in perfect conditions. Moreover, I will be easy to contact to you, if you do have more staff. And finally, it is important to issue correct invoices.As a result of your poor service, I think it is only fair, if your company starts to improve. If I do not see any i mprovements, I will be forced using another suplieyer. I look forward to hearing from you soon. Yours sincerely, Amparo de la Iglesia Band 2 All the content points are included and the answer is clearly organised with a good opening and closing. However, the number of basic errors means this is a band 2 rather than a band 3. Sample F Dear Mr Smith, We have been using your company for a number of years, however, recently we have experienced some problems with the quality of products and delays in delivery.As our customers have been devoutedly visiting our shop for years purchasing the best quality products, we feel obliged to make some remarks. Not only have we notice that the date for which dairy products should be consumed was extended but also in some yogurts we found that the labels describing the content were misleading. A cherry yogurt turned out to be a strawbery one. Furthermore, bottles of milk were not sealed properly which resulted in leaking and making the milk go off qui cker. On top of everything, there have been delays in delivery if not a non-delivery that occured already a few times.We trust you will give this matter your immediate attention and that everything will get back to normal, as we would still like to use your service. We hope it is just a temporary disposition. Sadly, however, we have to state clearly, that if no improvement will be made both with the quality of items and delivery we will have to change the supplier, for our customer sake and our reputation. Yours sincerely, Aneta Mroczek Band 4 This is an ambitious attempt at the task, showing fairly natural use of language, despite a number of non-impeding errors. It is well organised and cohesive. Question 4 Sample GI have carried out a research about company's internal communications and show you our study methods and our findings. METHODS 1. We designed a paper to cover all kinds of questions which may show company's internal communications. Then we selected a team in charge of t he whole process of implemetion the survey. 2. We chosed some people random who come from different departments to have a panel to express themselves freely regarding the topic. Then, we had a good record and notes of that. And some of them provide some useful suggestions. On the whole, the methods we conducted the program are scientific and effective.FINDINGS 1. Most of staff think we should improve company's communications. 2. The causes of preventing internal communications are as followed below: 1. Different departments seldom exchange informations about what they are doing now and what are their newly outcome and something like that. 2. Different team rarely cc e-mail to other relative team of other staff to share their informations. 3. The time to express oneself is too limited and everyone is just oriented to their own job itself and seldom share resources. 4. The activities which are attended by different departments or different teams are not common.PROPOSALS To respond the above problems and findings, I will propose as below. 1. To CC e-mail each other in the internal company which include not only in the department but among departments. 2. To exchange information among different departments and different teams oftenly. In order to achieve this goal, we can organize different activities to creat a atmosphere for them. Such as a panel, a training class, a outdoor travel and so on. 3. To open a company know-how discussion or training routinely to let every staff have a strategic idea and a long-term eyesight. Band 1There is considerable irrelevance in this answer and a serious lack of control. An appropriate format is used, but the lack of cohesion and non sequiturs (e. g. in ‘Finding' number 3) result in a very negative effect on the reader. Sample H Making communication better We have 10 people working in our admin department. All kind of communication between each other is very important and it needs to be quick and affective. At the moment w e do send Emails for sharing happening in every day basis. We also have a weekly meeting where some of us get together and look over the subjects from previous week and also make plans for the up coming ones.There is also someone there to make notes which will be typed over to correct minutes and sent to everybody who attended the meeting. My concern is that on those meetings we don't have the whole admin team present and therefore many times we have talked on the behalf of the ones who are not attending. This kind of communication might bring miscommunication to place. To resolve this matter I think that we should have everybody on that weekly meeting to get correct information from the right people. At least it is worth to have a go. Best regards, Kaie Sirak Band 2 This answer contains frequent errors, which sometimes obscure communication.The content points are all covered but not dealt with in depth. The end is particularly weak, leaving a negative impression on the reader. Over all, it fits more of the descriptors for band 2 than 3. Test 1 Listening Part 1 1 ACCESSORIES 2 MAIL(-)ORDER 3 TURNOVER 4 (A/ANY) STRUCTURE 5 CASH FLOW 6 (PROFIT) MARGINS 7 SMALL BUSINESSES/SMALL COMPANIES/SMALL FIRMS 8 INVESTMENT(S)(PLANS) 9 STRATEGIC (TARGETS)/ STRATEGY/STRATEGIES 10 OBJECTIVITY 11 BUYING BEHAVIO(U)R(S) 12 TRAINING Part 2 13. G 14. B 15. D 16. C 17. F 18. E 19. H 20. A 21. B 22. F Part 3 23. C 24. C 25. A 26. B 27. B 28.C 29. A 30. A Tapescript Listening Test 1 This is the Business English Certificate Higher 3, Listening Test 1. Part One. Questions 1 to 12. You will hear the founder of a company called Manshee talking to business students about its development. As you listen, for questions I to 12, complete the notes, using up to three words or a number. After you have listened once, replay the recording. You now have forty-five seconds to read through the notes.. [pause] Now listen, and complete the notes. [pause] Man: Good morning, ladies and gentlemen. I'm hono ured to have this opportunity to talk to you.Eight years ago, I bought my first computer, but I soon discovered that where I lived, it was difficult to find accessories for that particular make. That made me realise that other people must have the same problem. Then I found that foreign magazines contained plenty of advertisements of mail order companies, so I started buying spare parts and things that way and selling them on to my friends at a small profit. That was how my company, Manshee, was born. Four years later, Manshee was making a profit and had reached a turnover of six million pounds. We had four directors – myself and three of my friends – plus a staff of seventeen.The culture was young and the working environment didn't have any structure. The company just grew and grew with its own momentum, and everything we did seemed to strike lucky. If we needed to buy some equipment or redecorate the sales office, we decided yes or no in isolation, only taking the sh ort term – usually the cash flow for that month – into account. However, the market became increasingly cut throat, and that led to falling margins. We realised, rather unwillingly, that the time had come to structure our future, but we didn't really have much idea how to set about it.So we went to a firm of consultants who specialise in helping small businesses, and it proved a turning point. They insisted that we four directors sit down and rank our investments in order of importance for the coming years. It seems obvious now, but we'd never realised the value of doing it before. Initially, we set out strategic and financial targets for the next three years, and now we're pleased with just how many of those objectives we've met. The value of bringing in outside expertise was that it gave us objectivity. It's so easy to take things for granted, and to go on in the same mindset.Using consultants meant we received invaluable advice on our business priorities. Planning h as allowed us to make notable improvements. For instance, by segmenting our customer base, we realised that we could put our customers, currently in excess of a thousand, into four distinct groups, according to their buying behaviour. That made us realise we could increase sales if we allocated different people to deal with each group. So we set up four specialist divisions, and the most successful one has increased its sales by over twenty per cent, and that's the division involved with the training sector.We're signing off the next plan for growth. People are sometimes concerned that planning leads to rigidity, but we certainly don't find that it stops us from being as flexible as we need to be. Thank you. [pause] Now listen to the recording again. [pause] That is the end of Part One. You now have twenty seconds to check your answers. [pause] Part Two. Questions 13 to 22. You will hear five different people talking about problems, and responses to them in the companies where they work. For each extract there are two tasks. Look at Task One. For each question 13-17, decide which problem each speaker mentions, from the list A-H.Now look at Task Two. For each question 18-22, decide which response the company made to the problem, from the list A-H. After you have listened once, replay the recording. You now have thirty seconds to read the two lists. [pause] Now listen, and do the two tasks. [pause] Speaker One Woman: Well, now it's all over, I can only hope we've learnt the right lessons from the experience. Although the consultants at the time urged caution, the board were sure of the plan – after all, it was the sort of thing they'd pulled off before – and ploughed ahead with the launch of the new division.But the board wouldn't accept that the predicted boom in these new overseas markets was bound to be unstable because of likely fluctuations in currency rates and share prices, and that's where it all came unstuck. They reacted sensibly, though, and now we have established a good joint venture there, which is a better bet than going it alone, or slashing costs all over the place and laying people off in a panic. [pause] Speaker Two Man: In the end, you'd have to say we had a lucky escape – I mean, it could have been a lot worse. It's very difficult to know where your brand is really positioned.. we've always accepted that our research almost inevitably will be running a bit behind. Consumer tastes change so quickly these days, and that's where we suffered, and lost market share. The directors, once it was clear what was happening, attacked the problem and looked at various options. They could have looked to generate revenues with a share issue, but I think they were right to go for clipping back by reducing expenditure wherever possible – you're better placed to re- group with a tight ship. The plans to develop higher quality products for the future look pretty plausible now. [pause]Speaker Three Woman: Well, I now know to take all this talk about the importance of communication skills seriously†¦ I used to think it was all rather woolly, but when you've seen the damage misunderstandings can do†¦ I suppose the board was a grouping of people with such strong backgrounds individually that each of them expected to be top dog, and that it was perhaps inevitable that they'd clash over what direction the company should go in. Anyhow, it looked very grim for a while but, in the end, two of them took the pretty sizeable payoffs they were offered and moved on. From our point of view, at east it saved us from the prospect of the group being split up and the shares sold off. [pause] Speaker Four Man: We were all extremely glad to see the back of that particular episode in the company's history. I know there's quite a trend to constantly reviewing your sourcing in the search for cost savings, but it was crazy to move over to such an untried firm. The trouble was we were getting nearly all our parts from them, so everything was leaving the factory here with faulty components, with appalling results. We should have listened to the consultants, but on this one we thought we knew better.It got so bad that predatory offers were being made for the division, and we had to think hard about how to save the brand's reputation. Raising fresh capital through new shares was the right way to go and enabled us to cover the losses we made in sales. [pause] Speaker Five Woman: I sometimes really do think that the people who know least about a company are the people who run it†¦ that's why there's such an industry in advising on and supplying the skills for managing change. We went along assuming that we were selling well because of what we saw as our core qualities – but we were wrong.It was just that we happened to have got our pricing right, so when we changed that, it all started falling apart. Things got decidedly grim for a time, and drastic action was required. A m erger was considered, and an aggressive takeover had to be fought off. In the end, it was easier to accept an offer for the Budget Products Division, and avoid major redundancies, than to go on trying to keep the whole thing afloat. [pause] Now listen to the recording again. [pause] That is the end of Part Two. [pause] Part Three. Questions 23 to 30. You will hear a discussion between two senior managers, John and Deborah, bout an assistant manager, Colin, who has applied for a new post. For each question 23-30, mark one letter (A, B or C) for the correct answer. After you have listened once, replay the recording. You have forty-five seconds to read through the questions. [pause] Now listen, and mark A, B or C. [pause] Man: Well, Deborah, we need to think about the candidates who've put in applications for the post of area manager. Woman: Yes, John, it's an exciting new role, and it fits in with the strategy development plan. Man: Quite. It's part of a logical progression in our app roach to management, carefully consolidating our skills base.It should mean a new chain of command, but based on tried and tested methods.. , we'll be stronger as a result. Woman: Well that's the idea. Now, the first one that's come in is from Colin†¦ Man: The assistant manager for the south-east? Woman: Yes. Colin's clearly keen†¦ Man: But of course, it's an attractive proposition. Woman: And I think that's what's drawn him. He's said his current post is demanding – as well he might – but that he's keen to position himself in the spotlight here. Reading between the lines, I think the alternative, as he sees it, is to move sideways to IT, which is where his background is.It would be a shame to lose someone like him †¦ he's hungry. Man: Yes, it's a genuine application. He's a serious contender. I was struck recently†¦ I think it was last month.. , by his problem- solving abilities. He was passed a complaint – it wasn't really his problem at al l – but he took it up anyway, about some faulty goods we'd supplied, apparently. I think he saw it as an efficiency issue, and so relevant to any responsible person here. And he reacted really well, so that the customer went away happy after all. Woman: Right, and that suggests the qualities that are most germane to the job.Ultimately, I suppose, we're looking for a level of adaptability that it's fair to say someone in his position may not have had the chance to really demonstrate yet.. , but his familiarity with the goods we produce is second-to-none, so I think the signs are there that he may become an astute analyst and problem-solver. Man: That's certainly encouraging. And it's not just in the office that he's been looking good. I sent him abroad as part of that group a few weeks ago. The basic brief was to secure a continuation of the Asian contract. To be honest, that was a bit of a given, and what I was really hoping for was something extra.And sure enough, he clearly really worked on all our contacts out there, and he came back with some great new insights into how we might be able to develop bulk sales directly through warehouses, rather than through the standard agency channels. Woman: Oh right, interesting – I missed the debrief on that one. But I do know he went on a training course not so long ago, and clearly reaped the benefits there. The content was mundane enough – ‘how to produce effective reports' or some such – but he identified the points that really mattered, and saw that what it actually addressed was how to order the most pertinent facts for delivery to a team.Man: So, it's good news all round? Woman: Let's look at what his reference has to say. He does have shortcomings, of course. His confidence is very strong, almost to a fault, you might say, which could lead to difficulties on the patience front.. , just because he gets the point quickly doesn't mean he's entitled to think everyone else does, that they share the same conclusions.. , others may be behind in terms of objectivity, still grappling with issues that impact personally on themselves. Man: Hmm, that'd certainly be something to watch, I guess.Still, we're not looking for perfection, are we? And we're not going to be setting up a lone operator. Woman: Oh, far from it. Whoever gets the job will be well backed up. I was talking to the consultants the other day, and they were quite critical of our reliance on checking performance through the one-to-one appraisal system, so it's been decided that this new post will be linked into the cross-departmental advisory group that was set up a few months ago, and benefit from dealing with them and getting their input.That should help quite a bit. Man: That makes a lot of sense. Well, let's talk about some of the other candidates†¦ [pause] Now listen to the recording again. [pause] That is the end of Part Three. You now have ten minutes to transfer your answers to your Answer S heet. [pause] Note: Teacher, stop the recording here and time ten minutes. Remind students when there is one minute . remaining. That is the end of the test.

Learning Experiences Essay

The value of education undoubtedly depends on the purpose behind it. Activities also give the child new abilities, and allow him/her to discover abilities never known to have existed before, or strengthen skills that naturally exist in any human being. When a child is born, the child learns by interacting with the world around him/her, and this is the foundation for building the child’s intellectually abilities as well as the child’s personality, emotionally and socially (Mahapatra, 2009). This paper focuses on the learning experiences that a child acquires from various activities, as dictated by the child’s age. In this study, there are 5 age groups that would be considered. The first stage is the stage of ‘younger babies, the ‘older babies,’ the ‘toddler stage,’ the ‘kindy stage,’ and the last stage, the ‘preschoolers. ’ In this paper, the researcher would like to discuss the teaching strategies to be used, including all the considerations to be involved when it comes to teaching organisation. Young babies †¢ Young babies are children whose age is categorized as babies who are of 6 months old from the time when they are born. †¢ During this stage, the baby shall learn basic activities such as learning to sit on his/her own and learning to explore the world using his/her hands. Other senses are also at play since the child is naturally curious about the world and will use his/her sense to learn. At this stage, babies tend to use their mouths as well to explore things, which is why it is important that they be given toys that are not hazardous and will not cause choking. Some toys have been specifically designed for a baby’s learning purpose and these toys are safe to be kept in the mouth. †¢ Activities that can benefit a child’s learning experience can be aided by toys. Learning resources can start with toys that can be placed in the child’s crib, such as colourful mobiles, as well as toys that can be squeezed, such as musical toys. Other toys can be toys that require the child to use his/her body muscles to push and pull, in order to stimulate the child’s grabbing and grasping skills (Henig, 2008). †¢ As a teacher, it is important that the child be given materials to encourage him/her to be aware of his/her senses, what they are for and how to use them. For instance, the child can be given a musical ball, which the child has to squeeze in order for sounds to be heard. †¢ The learning experience of the child can be evaluated by the kinds of toys that stimulates the child’s brain. For instance, the teacher or the caregiver can provide a variety of toys for the child to play with, and depending on what toy the child picks up the most, the teacher can decide what toy appeals more to the child. If the child picks up the musical toy more often, it means that the sound that the ball makes appeals to the child’s senses. Older Babies †¢ Older babies are approximately aged from 6 to 15 months. †¢ At this stage, babies are able to develop their problem solving skills as they continue learning about a variety of new objects. They are also more able to understand people, and at this stage, the child starts to constantly seek for independence, and they try to develop their own self-esteem. Toys are also more played with, since the child starts to learn how to play ‘properly. ’ For instance, when a child is given toy blocks, or toys such as Lego, the child is actually able to build ‘something’ out of these blocks. In addition to this, the child is also more curious, so providing the child with a play area complete with swings, slides and other play structures encourages active play. †¢ Activities that could be advised for a child of this stage could be providing a child with a puzzle to complete. The teacher could provide the child with a cardboard jigsaw puzzle where the child has to form the pieces together in order to make a picture. This activity helps stimulates mind activity in the child, while wooden puzzles also stimulate sensory discrimination as well as the development of the child’s eyes and hands. An environment such as a playground could give the child enough room to set up his/her own dramatic scene, along with his/her own playmates. The teacher can provide the child with materials such as costumes in order for the child to be more creative in role playing. †¢ The teacher’s responsibility at this point is just to observe the child’s activities and not to actually help the child to do the right thing. This way, the child can have more freedom to express himself/ herself. Toddlers †¢ Toddlers are aged from 15 to 36 months. †¢ At this stage, toddlers are fascinated by household objects, the different shapes of objects and their textures. It is also at this stage where the toddler’s motor skills develop at a fast rate, and this is the stage where the greatest changes in a child’s life and the child’s mind happens. Furthermore, the child is able to express himself/herself more (University of Georgia, 2007). †¢ For this stage, the teacher can coordinate an activity that allows the child to use his sense of sound better, while also developing the child’s creativity level at a faster rate. The teacher could create a fun experience for the toddler by allowing the child to use a variety of cooking utensils for the child to play with. Pots, pans, and cans can be used, and the child can be given wooden utensils so he/she can make a personalized instrument and bang the items together to make his/her own rhythm. A rhythm game can also be played where the teacher can play a certain rhythm and have the child copy it and repeat it accordingly (Tomlinson, 2008). †¢ This activity stimulates the child’s response to sounds, and the teacher can begin to teach the child new words such as ‘beat,’ or ‘drum,’ to talk about the activity itself, or the teacher can teach the child descriptive words to allow the child to express his/her feelings while performing the activity. At this stage, the teacher helps the child be more familiar with shapes, textures, smells and even taste. Kindy Stage †¢ This stage is concerned with kids who are aged approximately 36 to 52 months. †¢ This is the kindergarten stage, where the child has begun to talk, sing and dance. This is also the stage where the child is supposed to be taught how to read since the child can already understand some concepts about the world. Children at this stage may start to struggle at first with reading. Therefore it is advised that the teacher or the caregiver read to the child every day. This way, the child can begin to realize that reading is a fun activity, and the child is also able to use his/her imagination as the adult reads to him/her. †¢ Learning how to read starts with a child’s ears. An activity that a teacher can do for the child would be to read a story to the child and to ask the child questions regarding the story. For instance, after reading a story about animals, the teacher can use the help of pictures with animals on them, as well as cards containing the names of these animals. The child’s task is to attach each word card to the picture it corresponds with. †¢ This way, the child is able to be familiarize himself/herself with new vocabulary, new situations and experiences, and the child can even match what he/she learns from reading to what he/she sees, hears, touches, and taste in real life (Cooper & Cooper, 2008). Preschoolers †¢ Preschoolers are from the age of 48 to 52 months old. †¢ At this stage, children can recall concepts easier, and also familiar words. They can also understand new words and new concepts better and can understand the meanings of basic words such as ‘over,’ and ‘under’ (Child Development Institute, LLC, 2008). When it comes to mathematical concepts such as addition and subtraction, there exists a pervasive relationship between a child’s understanding and the child’s procedural skills. Procedural knowledge refers to the child’s skills that are required in order to solve mathematical problems. †¢ For this stage, the teacher can do an activity by using materials such as marbles. The teacher can lay out the marbles on the ground and ask the child to count them. The teacher can then take away a number of these marbles and ask the child to count the marbles again. This way, the child can understand the meaning of subtraction, while the teacher can teach addition by adding more marbles to the pile and asking the student to count them. The teacher can first demonstrate how it is done first so that the child can easily follow. †¢ Such an activity helps the child to clearly understand the meaning of both addition and subtraction, as well as helping him/her to recite the numbers more often. This way, the child is also made familiar with more numbers. †¢ The teacher’s duty is to ensure that the child is able to count properly, as well as add properly and subtract properly. Previous stages allowed the child to have the freedom to perform in any way the child wants. At this age, however, the teacher should introduce the child to correct mathematical concepts so the child is able to retain in his/her mind such information (Geary et al. 2000) †¢ Such mathematical drills should be performed time and time again so that the child will not easily forget. The teacher can evaluate the child’s performance by repeating the exercise again and again, giving way for the child to make mistakes. For all the activities mentioned, it would help the teacher as well to use the reward system when a child performs well. This is especially advised for children who may be stubborn and require a little ‘pushing’ in order to perform accordingly or better. It must also be noted that children cannot be expected to learn quickly so the teacher must be patient and should help the child do so (Fendrich et al. 1993) References Child Development Institute, LLC. 2008. Language development in children, on January 15 2009, from http://www. childdevelopmentinfo.com/development/language_development. shtml Cooper, T. & Cooper, S. (2009) Teaching reading: Part One, retrieved on January 15 2009 from http://www. teaching-children-to-read. net/ Fendrich, D. W, Healy, A & Bourne, L (1993) Mental arithmetic: Training and retention of multiplication skill, Cognitive Psychology Applied, pp. 116-133. Geary, D, Hamson, C & Hoard, M (2000) Numerical and arithmetical cognition: A longitudinal study of process and concept deficits in children with learning disability, Journal of Experimental Child Psychology, 77, pp. 236-263. Henig, R. (Februaru 17 2008) Taking play seriously, New York Times Magazine, p. 38. Mahapatra, A. (January 11 2009) Activity leads to learning, The Hindu. Tomlinson, P. (2008) Psychological theory and pedagogical effectiveness: The learning promotion potential network, British Journal of Educational Psychology, 78, pp. 507-526. University of Georgia (2007) Learning and development: infants birth to 12 months. Better Brains for Babies, retrieved January 15, 2009 from http://www. fcs. uga. edu/bbbgeorgia/childDev_00-12. php

Introduction of the Corporate Law Economic Reform Program

Recent corporate failures have raised concerns about the unity of accounting information provided to investors and the independency of hearers ( Cohen et al. , 2007 ) . The major corporate prostrations such as Enron, WorldCom and HIH Insurance have sparked important force per unit area on direction, hearers, managers, the accounting profession and authoritiess ‘ inadvertence function to reexamine the issue of concern moralss and hearer independency ( Ahmed et al. , 2006 ) . These failures have led to regulative reforms in Australia with the debut of the Corporate Law Economic Reform Program ( Audit Reform and Corporate Disclosure ) Act known as CLERP 9 to advance transparence, answerability and hearer independency ( Cooper & A ; Deo, 2005 ) . The literature has shown that net incomes direction is consistently related to the strength of the corporate administration environment and terrible use of net incomes are by and large associated with loose administration ( Bhat et al. , 2006 ) . Reforms by CLERP 9 have changed corporate administration enforcement through compulsory independency demands for hearers, the strengthening of the uninterrupted revelation government and a alteration in enforcement powers of ASIC through the extension of the civil punishment government to persons who are ‘involved ‘ in the breach of uninterrupted revelation proviso with an increased mulct from $ 200,000 to $ 1million. The execution of increased independency demands for hearers and strengthening of the uninterrupted revelation government will motivate direction of houses to move more diligently and with due attention in regard to stockholders ‘ involvements when describing fiscal affairs ( Robinson, 2003 ) . This research reappraisal investigates the association between increasing hearer independency proposed by CLERP 9 and net incomes direction by houses in Australia. It investigates this association by analyzing two groups of listed entities, utilizing a pre/post research design covering the fiscal old ages 2003-2006. The first group of listed entities comprises of houses in the ASX 100, which are referred to in this research reappraisal as ‘compliant ‘ houses, while the 2nd group consists of houses in the ASX Small Ordinaries Index referred to as 'emerging ‘ houses. The two groups are selected as they are likely to act in different ways based on their features including size, media coverage, analyst followers, size of retentions by institutional investors and grade of examination by regulative organic structures.1.1 Research QuestionThe chief research inquiry is: â€Å" Has hearer independency imposed by CLERP 9 reduced net incomes direction of Australian houses? â €  This will be tested analyzing the difference in accumulations behaviour of Australian houses during the pre-CLERP 9 and post-CLERP 9 periods. The research inquiry is to be tested utilizing year-by-year cross-sectional and pooled arrested developments of the theoretical account developed based on anterior literature and theory. The modified Jones ( 1991 ) theoretical account steps net incomes direction as the theoretical account has a high grade of credence within the net incomes direction literature. The cross-sectional and pooled arrested development theoretical accounts are designed jointly to prove the association between net incomes direction and corporate administration enforced by CLERP 9, measured by hearer independency. The arrested development theoretical account besides controls for factors that might hold an impact in the trials such as house size, CEO alterations, Big-4 hearers and big shareholding.1.2 MotivationIn a recent commentary, Justice Owen emphasized the i mportance of the audit map for the capital market as a whole and the trust placed on the audit map by users of fiscal statements ( Robinson, 2003 ) . Justice Owen made several recommendations aimed at heightening the audit map, including the appropriate criterion of independency, the proviso of non-audit services and the relationship between hearers and their clients. The series of corporate dirts in 2000-2002 scoured trust in fiscal studies and in hearers. One of the aims of CLERP 9 is to beef up independency in hearers and to reconstruct unity of fiscal studies by controling net incomes direction and accounting fraud. Therefore, the extent of net incomes direction prior to CLERP 9 and the consequence of the CLERP 9 â€Å" event † on net incomes direction is an of import research subject. Therefore, the primary motive of this research study is to analyze the alteration in net incomes direction in the period taking to CLERP 9 compared to after CLERP 9. This research is motiva ted by the desire to understand the consequence of corporate administration enforcement by CLERP 9 on net incomes direction in Australian houses. The secondary motive is to analyze whether reforms by CLERP 9 to turn to hearer independency have weakened the hearer ‘s economic bond with the client, therefore take downing net incomes direction. There are significant sums of research in the audit literature that suggest that audit efficiencies are gained from cognition spillovers when non-audit services are jointly provided with an audit and therefore, it becomes in the best involvements of audit companies to supply both audit and non-audit services to their clients ( Solomon, 1990 ) . CLERP 9 has been introduced to command the proviso of non-audit services and heighten the unity of fiscal studies. Consequently, this research examines the relation between hearer independency and net incomes direction in the period integrating the debut of CLERP 9 in an event survey attack.1.3 ContributionThe most important part of this research is in look intoing the effects of CLERP 9 reforms on net incomes direction in â€Å" compliant â €  and â€Å" emerging † houses. The impact of CLERP 9 on emerging houses is of import to analyze every bit good since in a recent article published in Alan Kohler ‘s Eureka Report, fiscal instruction adviser, Scott Francis analyzed the recent public presentation of the little cap section of the Australian portion market and stated that the recent returns have been strong with the ASX Small Ordinaries Index surpassing the ASX 100 by 18 % in 2009. However, the Small Ordinaries Index underperformed the ASX 100 by 16 % in 2008 ( Francis, 2009 ) . This shows the intense competition between the two indices and besides shows the possible growing of the emerging houses in the Small Caps Index. In order to keep strong growing rates and get more capital in the market, these houses are besides likely to prosecute in net incomes direction. Therefore, this research will supply grounds associating to the efficaciousness of CLERP 9 reforms in turn toing hearer independency and whether increasing hearer independency constrains net incomes direction in these houses. By analyzing two different groups of houses, this survey will supply an penetration into net incomes direction of these houses in the period prior to CLERP 9 and the period after CLERP 9. This survey besides contributes to bing literature on hearer independency, by supplying grounds in whether hearer independency constrains net incomes direction patterns in compliant and emerging Australian houses. The survey besides provides an penetration into whether emerging houses react otherwise to compliant houses in footings of net incomes direction, during the survey periods before and after the passage of CLERP 9. Regulatory reforms from CLERP 9 have different deductions for different types of houses and through comparing of emerging houses with ailment houses, it is expected that net incomes direction has declined significantly for some group of houses, whilst others have continued in pull offing net incomes. As mentioned earlier, both the groups have different external factors impacting them, hence it will be interesting to analyze the reaction of both groups after the passage of CLERP 9.2.0 LITERATURE REVIEW2.1 Net incomes ManagementNet incomes direction has assorted definitions normally classified as white, grey, or black. â€Å" Beneficial † ( white ) net incomes direction enhances the information value of studies by conveying private information ; the â€Å" baneful â₠¬  ( black ) involves straight-out deceit and fraud ; the â€Å" impersonal † grey is use of studies within the boundaries of conformity with bright-line criterions, which could be either timeserving or efficiency enhancing ( Yonen & A ; Yaari, 2007 ) . The footings â€Å" private addition † ( Schipper, 1989 ) , â€Å" mislead † ( Healy & A ; Wahlen, 1999 ) stress the timeserving feature of net incomes direction and prevent the possibility that net incomes direction can heighten the information content of reported net incomes. Scott ( 1997 ) and Mulford & A ; Comiskey ( 2002 ) suggest the possibility that net incomes direction can happen for signaling intents every bit good. The deduction of their definition is that reported net incomes can be enlightening for users if the direction pick of accounting policies or estimations is perceived to be believable signals of a house ‘s implicit in public presentation. To understand net incomes direction better, the difference between net incomes direction and accounting fraud needs to be distinguished. Academic literature normally defines direction discretions which fall within Generally Accepted Accounting Principles ( GAAP ) as net incomes direction, whereas the Security Exchange Commission ( SEC ) extends its analyzing standards of net incomes direction to outright deceitful accounting ( Yonen & A ; Yaari, 2007 ) . The reading that net incomes direction can happen within the GAAP is consistent between academe and regulator, but whether fraud constitutes net incomes direction is equivocal in academic definitions. Brown ( 1999 ) argues that the difference between net incomes direction and deceitful coverage is frequently really narrow and ill-defined. Net incomes direction incorporates a prejudice and use of just value of reported net incomes, hence regulators frequently view it as bad and therefore be given to sort it as fraud. However, there is a clear differentiation between fraud and net incomes direction depending on the managerial purpose to deceive investors. Any presentation of reported net incomes which deviates from the just net incomes of the house but falls into the boundary of fraud can be defined as net incomes direction.2.2 Two cardinal conditions of Earnings ManagementThere is no substantial function for fiscal revelations within perfect and efficient markets since fiscal statements are wholly relevant and dependable and hence, directors and users of fiscal statements would hold no struggle over accounting judgements excluding the range for accounting use ( Watts & A ; Zimmerma n, 1979 ) . Unfortunately, in our universe of progressive and uncomplete markets, the ideal status does non ever prevail. Two types of market imperfectnesss exist as a consequence:2.2.1 Information AsymmetryThe two rules of fiscal describing – relevancy and dependability, straight reflects the function of accounting information and are aimed to decide the cardinal job of information dissymmetry. The released information is relevant information with regard to the house ‘s future chances, and is dependable information free of managerial use. Where fiscal revelation and judgements ab initio are aimed to cut down the information dissymmetry between directors and foreigners, it has been progressively argued that director ‘s ability in exerting discretion is likely to enforce costs on the users of accounting information. Dye ( 1988 ) and Trueman & A ; Titman ( 1988 ) point out that the being of information dissymmetry between directors and stockholders is a necessary status for net incomes direction. Schipper ( 1989 ) besides highlights the status for net incomes direction being the continuity of asymmetric information, but she unwinds the status by reasoning that the out of use communicating can be eliminated through the enforcement of contractual agreement. From the position of a positive association between the conservativism of accounting estimations and corporate revelation, Imhoff & A ; Thomas ( 1994 ) supply empirical grounds in back uping this line of statement. They conclude that houses who unwrap more information are more likely to hold conservative accounting estimations ( prosecuting in less net incomes direction ) . Richardson ( 1998 ) uses the bid-ask spread and the scattering in analysts ‘ prognosiss as a step of information dissymmetry and finds a positive association between ne t incomes direction and the degree of information dissymmetry.2.2.2 Agency CostssThe 2nd cardinal status for the being of net incomes direction is bureau costs which is based around the theoretical model of the bureau theory. Jensen and Meckling ( 1976 ) developed the bureau theory to explicate the link between principals ( stockholders ) and agents ( directors ) . Principals use contracts to actuate agents who would otherwise hold struggles of involvement with principals. Although the primary map of catching is designed to aline the inducements between principals and agents ( Deegan, 1996 ) , the rawness and the rigidnesss in binding of contracts create bureau concerns, which lead to use of the coverage procedure. Watts & A ; Zimmerman ( 1986 ) suggest that the ex-post managerial discretions are made to increase compensation or to avoid debt compact misdemeanors. They use Positive Accounting Theory to exemplify how directors choose accounting methods to accomplish coveted accountin g Numberss and therefore act upon the house ‘s contractual agreements. In fact, grounds of net incomes direction pattern to bring forth higher direction compensation suggest that the design of contracts to aline the inducements of the agents with those of the principal might non be the optimum solution in extenuating bureau costs ( Hart & A ; Holmstrom, 1987 ) . Watts & A ; Zimmerman ( 1978 ) take the position that directors ‘ pick of accounting methods is to maximise their ain public-service corporation, where the public-service corporation is a map of the direction compensation and the house ‘s stock monetary value. Therefore, undertaking which is designed to work out bureau struggles non merely raise room for managerial self-interested behaviour, but besides imposes extra costs on stockholders if it is used in advancing directors ‘ ego involvements instead than that of stockholders.2.3 Two viing positions of Net incomes ManagementNet incomes direction arises from information dissymmetry job and bureau struggles that occur when equit y ownership is separated from the daily operation of the corporation and directors have a comparative information advantage over stockholders. On one manus, these market imperfectnesss create an environment for directors to prosecute in accounting discretion to advance their opportunism at the disbursal of stockholders. On the other manus, they besides create an chance for directors to utilize accounting discretion to pass on their company ‘s performance-related information in an appropriate mode with investors ( Trueman & A ; Titman, 1988 ; Dye, 1988 ; Schipper, 1989 ) . Net incomes direction literature reflects these two viing positions as timeserving behaviour and signaling mechanism.2.3.1 Opportunist behaviourThe position of timeserving behaviour takes the position that directors use information dissymmetry between foreigners and insiders to maximise their public-service corporation in covering with compensation, debt contracts and ordinances. Investors are thereby misled by the undependable information reported. Watts & A ; Zimmerman ( 1978 ) used self-interest attack in explicating directors ‘ discretional behaviour over reported net incomes to act upon contractual results. Opportunist net incomes direction illustrates directors ‘ desire to impact wealth transportation between related undertaking parties and themselves. Positive Accounting Theory states that proprietors expect directors to exert discretion towards their personal addition and take this into consideration when they offer directors with compensation programs. The value of direction compensation contracts drive up managerial outlook and therefore increases the degree of discretions itself. Scott ( 1997 ) refers to this as â€Å" unexpected † managerial discretion which consequences in a net loss in the aggregative stockholder wealth. In a catching relationship, nevertheless, directors are more risk averse compared with other undertaking parties. Capable to restraints of these contracts, they will try to maximise their personal wealth. Dye ( 1988 ) and Fudenberg & A ; Tirole ( 1995 ) demonstrate that risk-averse directors without entree to capital markets will hold an inducement to prosecute in net incomes direction.2.3.2 Signing mechanismThe advocates of the signaling perspective argue that directors manage net incomes to convey their inside information about houses ‘ chances and therefore it serves as a signaling mechanism. Directors may be able to impact the stock monetary value by prosecuting in net incomes direction making a smooth and turning net incomes threading over clip. As such, net incomes direction can be a signal mechanism through which inside information about the house can be communicated from the direction to investors. A figure of surveies have modeled some signifier of information dissymmetry and depicted net incomes direction as rational equilibrium behaviour ( Hunt et al. , 1997 ; Bartov et al. , 2002 ; Lev, 2003 ; Dye, 1988 ) . These surveies document signaling grounds of net incomes direction to ease efficient communicating between directors and information users to better the value relevancy of fiscal coverage and enhance investors ‘ ability in foretelling house ‘s public presentation. Further, the signaling position besides implies that net incomes direction is sometimes demanded by stockholders. Beidleman ( 1973 ) and Dye ( 1988 ) argue that stockholders will demand for net incomes direction for two grounds. First, directors can cut down the cost of capital through a drum sander, more predictable income watercourse. Second, Dye ( 1988 ) states that a more stable income watercourse influences prospective investors ‘ perceptual experience of house value. Since current stockholders will sell their portions to the following coevals of future stockholders, directors will move on behalf of the current stockholders and have an inducement to pull off net incomes to maximise the merchandising monetary value received by the current stockholders ( Easton & A ; Zmijewski, 1989 ; Chaney & A ; Lewis, 1995 ) .2.4 Motivations to prosecute in Earnings Management2.4.1 Contracting IncentivesFiscal information and studies of a house drama an of import function in set uping and supervising contracts between a house and its stakeholders ( Sweeney, 1994 ) . Debt suppliers and creditors of houses commonly include contracts that are linked with fiscal statement information in order to protect their involvements. Watts and Zimmerman ( 1978 ) indicate that such contracts encourage houses to pull strings net incomes for the fiscal statements to look attractive to creditors. Under footings of the debt contract houses are required to show their fiscal information in a mode that is consistent with the understanding in order to avoid punishments under the contract. DeFond & A ; Jiambalvo ( 1994 ) found grounds that houses apply income-increasing accumulations as a agency of avoiding the effects of debt contract misdemeanor. There are besides other contractual inducements for directors to pull off net incomes, for illustration in a direction buyout contract ; directors have an inducement to understate net incomes in an effort to get a house at a lower monetary value ( Wu, 1997 ) . In coup d'etat or amalgamation contractual scenes, Easterwood ( 1997 ) found grounds that mark companies of hostile coup d'etats attempt to blow up net incomes in the period prior to a hostile coup d'etat effort to deter their stockholders from back uping the coup d'etat.2.4.2 Capital Market ExpectationsCapital markets use fiscal information to put security monetary values. Investors use fiscal information to make up one's mind whether to purchase, sell or keep securities. Market efficiency is based upon the information flow to capital markets. When the information is wrong, it may non be possible for the markets to value securities right ( Xie et al. 2003 ) . To this extent, net incomes direction obscures existent public prese ntation and lessens the ability of stockholders to do informed determinations. Prior surveies have examined the inducements of directors to pull strings net incomes in an effort to act upon assorted capital market participants. Dechow et Al. ( 1996 ) and Teoh et Al. ( 1998 ) supply grounds that directors inflate net incomes prior to seasoned equity offerings. These findings are consistent with the contention that directors seek to pull off pre-issue net incomes in an effort to better investors ‘ outlooks about future public presentation ( Xie et al. 2003 ) . Directors besides engage in net incomes direction to run into and crush net incomes benchmark as failure to run into net incomes benchmarks are believed to increase uncertainness about the company ‘s future chances and a perceptual experience among foreigners that there are deep, antecedently unknown jobs at the company ( Graham, 2006 ) . The importance of these concerns increases with the grade of net incomes counsel that the company provides. There is a common belief that everyone plays the net incomes game, losing net incomes marks indicate that a company has no available slack to present net incomes. Therefore, the market assumes that losing the mark means the company is potentially confronting serious jobs and must hold already used up its ‘cushions ‘ ( Graham, 2006 ) .2.5 Net incomes Management and CEO Compensation IncentivesAn built-in constituent of houses ‘ net incomes direction is the proportion of CEO compensation that is attached to company ‘ s stocks and options. Bergstresser & A ; Philippon ( 2006 ) supply grounds that net incomes direction is more marked at houses where CEO ‘s entire compensation is closely tied with houses ‘ stocks and options. Evidence from Bergstresser et Al. ( 2006 ) indicate that companies with more incentivized CEOs have higher degrees of net incomes direction as these CEOs appear to be more aggressive in their usage of discretional constituents of net incomes to impact their house ‘s reported public presentation. They argue that CEOs whose entire compensation consists chiefly of stock and options have an inducement to pull strings net incomes so that the house can describe a net income and supply favourable intelligence to investors ; taking to an addition in portion monetary value. Tiing CEO compensation to company stocks may hold the consequence of promoting CEOs to work their discretion in describing net incomes, with an oculus to pull strings the portion monetary value of the company ( Bergstresser & A ; Philippon, 2006 ) .2.6 Net incomes Management and Corporate GovernanceLeuz et Al. ( 2003 ) found empirical grounds that net incomes direction occurs less often where outside investors are provided more rigorous protection by the state ‘s legal administration system and occurs more often in states where the legal administration system provided to outsider investors is weak. Leuz et Al. ( 2003 ) argues that the presence of a administration environment that provides strong, well-enforced protection of the rights of corporate foreigners serves to restrict the ability of inside direction to get private control benefits through net incomes direction. Wells ( 2002 ) provides empirical support that incoming CEO ‘s take an ‘earnings bath ‘ in the twelvemonth of the CEO alteration. DeAngelo ( 1988 ) provides direct grounds of net incomes direction subsequent to CEO alteration and notes that the period subsequent to CEO alteration, incoming directors take an ‘earnings bath ‘ from both non-cash write-downs and unexpected accumulations and that they attribute this to the former direction. Incoming CEO ‘s may hold considerable inducements to minimise reported income in the initial phase of their term of office. This arises as a effect of accounting income being mostly irrelevant to managerial public assistance during the first fiscal twelvemonth of term of office, which is typically a partial twelvemonth ( Wells, 2002 ) . Incoming CEO ‘s are non held responsible for past public presentation and may explicitly impute past public presentation to prior direction. Consequently, income may be deferred to subsequent periods when it will more probably have a positive impact on compensation either through expressed contracts or inexplicit wagess. In this scene, the entrance CEO is typically associated with past determinations, inexplicit unfavorable judgment of which may be embodied in downwards net incomes direction ( Wells, 2002 ) . Furthermore, the surpassing CEO is unable to restrain such behaviour and this high spots an of import corporate administration issue ( Godfrey et al. , 2003 ) . Klein ( 2002 ) found grounds of a negative relation between board independency and unnatural accumulations, proposing that decrease in board independency is accompanied by big addition in unnatural accumulations. In add-on to Klein ( 2002 ) , Xie et Al. ( 2003 ) found consequences that suggest lower degrees of net incomes direction is associated with greater independency on the board of managers. These findings indicate that independency of the board of managers is of import in restraining the leaning of directors to prosecute in net incomes direction. Based on the literature on board independency, this research will use a variable to command for board independency in the cross-sectional and pooled arrested development theoretical accounts.2.7 Net incomes Management and Auditor IndependenceHearers are appointed as an independent party to supply an sentiment as to whether fiscal statements supply a ‘true and just ‘ position ( Chapple & A ; Koh, 2007 ) . Independence is by and large understood to mention to a mental province of objectiveness, deficiency of prejudice, personal involvement, prior committedness to an involvement, or susceptibleness to undue influence or force per unit area. Independence is important in the auditing profession and this has come into light through the failures of Enron and WorldCom. Without independency, investors and stakeholder will lose assurance in audit studies, the hearer ‘s sentiment will non be believable, and besides fiscal statements will lose credibleness, therefore lead to future corporate failures as was the instance of Enron ( Chapple & A ; Koh, 2007 ) . It is in direction ‘s involvements to hold an external audit to cut down bureau costs: deficiency of a believable independent audit will increase cost of capital, restrict entree to capital and enforce terrible limitations on direction ‘s actions. The demand of hearer independency is critical and any damage or perceived damage of independenc y will increase bureau costs ( Firth, 1997 ) . Literature has expressed concerns about the effects of hearers ‘ proviso of non-audit services on the independency of hearers. For illustration, Beeler & A ; Hunton ( 2001 ) reference that the proviso of non audit services arguably strengthens the hearer ‘s economic bond with the client, thereby cut downing hearer independency and increases hearer ‘s inducement to assent to client force per unit area, including force per unit area to let net incomes direction. Firth ( 1997 ) suggests that any existent or sensed damage of hearer independency will earnestly impact the credibleness of fiscal statements. One possible signal of hearer independency jobs is the grade to which the audit house is economically bonded to a client. Supplying joint services leads the hearer to agree with direction ‘s positions on questionable accounting patterns because challenging these patterns will probably ensue in the loss of non merely the audit fee, but besides consultancy assignments ( Firth, 1997 ) . DeFond et Al. ( 2002 ) besides suggests that although hearers have market-based inducements to stay independent, auditor independency may be threatened when hearers provide non audit services to their clients. Increased economic bonding between hearer and its client ensuing from non audit services induces the hearer to decide differences in the client ‘s favor in order to keep tenure ( Simunic, 1984 ) . The issue of mensurating the economic bond and economic importance of a client to the hearer is further addressed by Ashbaugh et Al. ( 2003 ) , who argue that the amount of audit and non audit fees, i.e. entire fees best captures the expressed economic bond between hearer and client. Motivated by turning public and regulative concerns over possible hurtful effects of non-audit services, new ordinances control the proviso of non-audit services and heighten the unity of fiscal studies ( Ferguson et al. , 2004 ) . A host of empirical surveies have examined the relationship between hearer independency, non-audit services and net incomes direction. Empirical grounds from Frankel et Al. ( 2002 ) indicated that non audit fees are positively related with the magnitude of discretional accumulations, while audit fees are negatively associated with net incomes direction. Ferguson et Al. ( 2004 ) examined the association between non audit services and net incomes direction activity and found grounds coverage net incomes direction to be significantly and positively related to non audit services. This is consistent with their statement that higher degree of economic bonding between hearer and client ensuing from non audit services may cut down hearers ‘ willingness to re strain net incomes direction activity.2.8 Corporate Law Economic Reform Program ( CLERP 9 )Severe use and fraud have been associated with loose corporate administration, deficiency of hearer independency and executive inducements construction conducive to timeserving behaviour ( Leuz et al. , 2003 ) . Recent planetary corporate failures have sparked important force per unit area on direction, hearers, managers, the accounting profession and authoritiess ‘ inadvertence function to reexamine the issue of concern moralss and hearer independency. These corporate failures have led to formal authorities questions to look into the grounds behind these unexpected corporate prostrations. In Australia, the failure of HIH Insurance led to the enquiry into the fortunes environing its failure. The study of the HIH Royal Commission indentified a figure of possible breaches of the Crimes Act and the Corporations Act. It was besides found that there was grounds on deficiency of audit inadvertence, transparence, answerability and hearer independency ( Robinson, 2003 ) . The study ‘s policy recommendations on corporate administration, fiscal coverage and confidence were considered into the CLERP 9 amendments for the Corporations Act as these amendments changed the manner the jurisprudence recognized the direction and administration of companies and corporate groups. On 25th June 2004, the CLERP 9 Bill gained blessing of Parliament and came into consequence as the Corporate Law Economic Reform Program ( Audit Reform and Corporate Disclosure ) Act 2004 ( Cth ) on 1 July, 2004. The CLERP 9 Act contains a figure of agendas covering with: audit reform, fiscal coverage, wage of managers and executives, uninterrupted revelation, hearer independency, write offing of options, conformity controls and encouragement of greater stockholder engagement at meetings ( Robinson, 2003 ) . Since the debut of CLERP 9, scrutinizing criterions have become statutory and non simply professional duties. CLERP 9 embodies recommendations associating to auditor independency and audit quality. One of the most of import alterations CLERP 9 made was set uping the Auditing and Assurance Standards Board ( AUASB ) as a statutory organic structure and making the Financial Reporting Council ( FRC ) which is responsible for the inadvertence of the AUASB and for O.K.ing its strategic determinations. Under the CLERP 9 Act, hearers are now required to supply to their clients a written declaration that the hearer has complied with the hearer independency demands and any applicable codifications of professional behavior ( Chapple & A ; Koh, 2007 ) . Section 324CA of CLERP 9 enforces rigorous demands of the proviso of both audit and non audit services to the same client and house every bit good as to the fortunes that will amount to a struggle of involvement. The new liability model is designed to promote a ‘culture of conformity ‘ by doing it an offense to transgress the independency demands and puting liability on all members of an audit house and all managers of audit companies. The debut of CLERP 9 has brought many reforms in a manner of beef uping the independency of hearers so investors, stakeholders and the populace in general can hold higher assurance in audit studies and in the long-term public presentation of companies. Enhancing auditor independency came through the signifier of subjecting Australian public companies and their external hearers to detailed commissariats regulating hearer independency, and beef uping bing hearer independency through ( Robinson, 2003 ; Federal Treasury, 2003 ; Cooper & A ; Deo, 2005 ) : A new general criterion of hearer independency Auditor rotary motion Restrictions on employment relationships between hearers and audit clients A compulsory chilling off period before members of an audit house can go a manager or officer of the audit client Self-review menace was addressed by CLERP 9 necessitating two things: compulsory revelation of fees paid for non audit services in certain classs and a statement from the audit commission to be included in the one-year study that it is satisfied that the proviso of those services is compatible with auditor independency. In drumhead, the literature reappraisal presented a treatment on net incomes direction and assorted topics in relation to net incomes direction such as hearer independency, CEO compensation inducements, corporate administration, etc. From net incomes direction literature, it is apparent that capital market outlooks and undertaking inducements are the few of the chief motives driving directors to prosecute in net incomes direction.3.0 HYPOTHESIS DEVELOPMENT3.1 Net incomes Management 2003-2006The debut of increased regulative reforms to heighten the corporate administration environment will supply strong, well-enforced protection of the rights of corporate foreigners and will function to restrict the ability of inside direction to get private control benefits through net incomes direction ( Wright et al. , 2006 ) . Anterior literature has suggested that the deficiency of corporate administration enforcement could enable directors to more easy run into analysts ‘ prognosiss, misus e the company ‘s financess and run into net incomes marks through net incomes use ( Hope, 2003 ) . Australian houses are expected to follow CLERP 9 reforms rather exhaustively as any non-compliance will ensue in important punishments and bad image. Conformity with demands of hearer independency introduced by CLERP 9 will cut down the economic bond companies have with their hearers, and this is expected to ensue in hearers supplying nonsubjective audit studies free from any prejudice and direction force per unit area. With the debut of CLERP 9, it is interesting to analyze the consequence CLERP 9 has on the net incomes direction patterns of these houses. It is expected that the compliant group of houses ( ASX 100 ) will react faster to CLERP 9 reforms than emerging houses ( Small Ordinaries Index ) . First, it is expected that compliant houses have an equal internal administration construction in topographic point to better transparence and to guarantee the market that these houses are one measure in front of the remainder of the houses. Compliant houses would hold prepared for CLERP 9 prior to its debut, and therefore the consequence of CLERP 9 as an ‘event ‘ in these houses will be less as compared to the consequence on emerging houses. Compliant houses are besides under heavy examination from regulators than the rising houses, while the houses in the compliant group are all audited by the Big-4 hearers. Therefore, it is expected that CLERP 9 will hold an consequence on net incomes d irection in the station CLERP 9 period for the compliant houses. Compliant houses have less to derive and are risk averse, whilst rising houses would desire to turn and raise capital and in order to make so, direction will be inclined to ‘play ‘ with accounting Numberss to pull possible investors. It is expected that CLERP 9 will heighten transparence, better hearer independency and these are expected to act upon the net incomes direction patterns of emerging houses. As indicated by Wright et Al. ( 2006 ) , the debut of increased regulative reforms to heighten the corporate administration environment will function to restrict the ability of inside direction to get private control benefits through net incomes direction. These treatments hence lead to the undermentioned hypotheses: Hypothesis 1: Net incomes direction is expected to diminish in the station CLERP 9 period for the ASX 100 â€Å" compliant † houses. Hypothesis 2: Net incomes direction is expected to diminish in the station CLERP 9 period for the ASX Small Ordinaries Index â€Å" emerging † houses. Hypothesis 3: Net incomes direction is expected to be low ( high ) when hearer independency is high ( low ) in ASX 100 â€Å" compliant † houses and ASX Small Ordinaries Index â€Å" emerging † houses. Hypothesis 4: Net incomes direction is positively associated with CEO equity based compensation.4.0 RESEARCH METHOD4.1 Sample DescriptionThe sample for this survey consists of Australian houses selected indiscriminately from the ASX 100 and ASX Small Ordinaries Index. This will guarantee that the sample from each index will be relative to the population. The survey period is between 2003 to 2006, covering four fiscal old ages. The houses will be classified in the two classs ( ASX 100 and ASX Small Ordinaries Index ) for each twelvemonth of the survey identified from the Standard & A ; Poor peoples ( S & A ; P ) database and information from the Australian Stock Exchange ( ASX ) . The first group of houses includes the ASX 100 index, which are the 100 largest stocks listed on the ASX and 50 houses will be picked indiscriminately for this sample. The index is float-adjusted, with securities that are extremely liquid and hence, institutionally investable ( Standard & A ; Poor peoples, 2 007 ) . The 2nd group includes 50 houses besides picked indiscriminately based on the ASX Small Ordinaries which is used as an institutional benchmark for little cap Australian equity portfolios ( Standard & A ; Poor peoples, 2007 ) . The sample from both the indices will be grouped together in a pooled arrested development and a silent person variable for emerging and compliant houses will be used to find size. Datas for the independent and control variables will besides be obtained from the undermentioned beginnings: Connect 4 on-line database, Fin Analysis on-line database and through company one-year studies. The sample choice standards are as follows: ( i ) houses continuously listed on their relevant constitutional list and ( two ) all necessary informations available for the research method adopted in this survey.4.2 Measuring Net incomes ManagementAnterior net incomes direction surveies have developed several trials for observing net incomes direction. Healy ( 1985 ) tested net incomes direction through the appraisal of accounting policy alterations, McNichols & A ; Wilson ( 1988 ) tested the discretional accrual constituent of a individual history and Jones ( 1991 ) used the estimation of the discretional constituent of entire accumulations to prove for net incomes direction. Net incomes direction can be achieved by assorted agencies such as the usage of accumulations and alteration s in accounting methods. However, net incomes direction through the use of accumulations is believed to be the favoured instrument because accumulations have no direct hard currency flow effects and hence, are less likely to be ‘undone ‘ by the market ( Trueman & A ; Titman, 1988 ) . Accrual net incomes is considered superior to hard currency flows because it overcomes the timing and mismatching jobs built-in in mensurating hard currency flows ( Dechow, 1995 ) . In add-on, accumulations let directors pass on their private, inside information and hence, better the ability of net incomes to reflect the implicit in economic value. At the same clip, directors could mistreat the flexibleness permitted by GAAP by prosecuting in aggressive coverage of accumulations that can sabotage the informativeness of reported net incomes. The usual starting point for the measuring of net incomes direction is entire accumulations ( Dechow et al. , 1995 ) . Entire accumulations are so divided into a discretional ( DA ) and non-discretionary ( NA ) constituent. The discretional part of entire accumulations is used in this survey to mensurate net incomes direction, as the premise underlying the net incomes direction model is that the higher the composing of discretional accumulations within entire accumulations, the higher the likeliness that a house is utilizing discretion within accrual accounting to prosecute in net incomes direction. Non-discretionary accumulations are portion of entire accumulations caused by house ‘s gross revenues growing and are ‘viewed as independent of managerial control ‘ or beyond the control of the CEO ( Frankel et al. , 2002 ) . The part of entire accumulations unexplained by normal operating activities is labeled discretional accumulations. A time-series attack based on the Jones ( 1991 ) theoretical account allows a comparing of net incomes direction activities of houses. The Jones ( 1991 ) theoretical account regresses entire accumulations against the alteration in grosss and the degree of gross fixed assets. Entire accumulations include alterations in working capital histories that, in portion, depend on alterations in gross. Changes in gross are used to command for the economic environment and the gross belongings, works and equipment ( PPE ) is included to command for the non-discretionary depreciation disbursals. However, factors such as growing and rising prices can do the time-series of a house ‘s economic variables to expose unequal discrepancies over clip. To get the better of this job the Jones ( 1991 ) theoretical account uses lagged assets to scale the independent and dependent variables to cut down the possibility of heteroscedasticity ( Lim et al. , 1999 ) . Dechow et Al. ( 1995 ) refined the Jones ( 1991 ) theoretical account by deducting the alteration in receivables from the alteration in grosss and hence, the invention leads to the modified Jones ( 1991 ) theoretical account as demonstrated in equation 1.0 below. The modified Jones ( 1991 ) theoretical account provides the most powerful trial for observing net incomes direction as it corrects the inclination of the Jones theoretical account to mensurate discretional accumulations with mistake when discretion is applied over grosss ( Dechow et al, 1995 ) . While this attack is capable to unfavorable judgment from Kothari et Al. ( 2005 ) , which has suggested that public presentation matched discretional accrual steps enhances the dependability of illations from net incomes direction when the hypothesis being tested does non connote that net incomes direction will change with steadfast public presentation. Kothari et Al. ( 2005 ) suggest that public presentation fiting on return on assets controls for the consequence of public presentation on measured discretional accumulations. However, due to the prevalence of the modified Jones ( 1991 ) theoretical account in net incomes direction literature, gauging discretional accumulations is to be conducted utilizing the modified Jones ( 1991 ) theoretical account.Non-discretionary Accumulations: Modified Jones ( 1991 ) ModelOriginal Jones ( 1991 ) ModelWhere: = entire non-discretionary accumulations in twelvemonth T for house I = entire accumulations in twelvemonth T for house I = entire assets in twelvemonth t-1 for house I = grosss in twelvemonth T less grosss in twelvemonth t-1 for house I = gross belongings, works & A ; equipment in twelvemonth T for house I The traditional method of calculating entire accumulations ( TA ) follows the lines of anterior research such as Healy ( 1985 ) , Jones ( 1991 ) and Dechow et Al. ( 1995 ) which have used the balance sheet attack to cipher TA. Hribar and Collins ( 2002 ) argue that utilizing the balance sheet attack to calculate entire accumulations is inferior in certain fortunes to a hard currency flow statement based attack. Austin and Bradbury ( 1995 ) concluded from their survey that anterior research which compares different hard currency flow steps is likely to be robust against mistakes contained in the hard currency flow estimations. They besides mention that it is preferred to utilize reported hard currency flows from operations instead than gauging hard currency flows from alterations in balance sheet histories and income statement points since these contain significant mistakes and therefore is a lacking placeholder of reported hard currency flow from operations ( Austin & A ; Bradbury, 1 995 ) . Hribar and Collins ( 2002 ) point out that utilizing successive-year balance sheet variables to mensurate net incomes direction creates possible jobs around ‘non-articulation ‘ day of the months such as amalgamations and acquisitions. Due to the unfavorable judgments of the balance sheet attack, the hard currency flow attack is to be used for mensurating entire accumulations ( TA ) .Entire AccumulationsWhere: = Net income in twelvemonth T = Cash flow from operations in twelvemonth T = lagged entire assetsDiscretionary AccumulationsThe usage of natural accrual sums as a placeholder for net incomes direction is a simple method to measure net incomes quality because houses can hold high accumulations for legitimate concern grounds, such as gross revenues growing. A more complicated placeholder can be created by trying to categorise entire accumulations into non-discretionary and discretional accumulations. The non-discretionary constituent reflects concern conditions such as growing and he length of the operating rhythm that of course create and destroy accumulations, while the discretional constituent identifies the direction picks. Therefore, the consequence of drawing discretional accrual sums from the entire accrual sum is a metric that to a certain extent reflects accumulations that are due to direction ‘s pick since they are non obligatory disbursals that are yet to be realized and recorded in the histories. Hence, discretional accumulations is a better placeholder for net incomes direction.5.0 DecisionThe research reappraisal aims to look into whether the debut of the Corporate Law Economic Reform Program Act ( CLERP 9 ) has influenced net incomes direction patterns of Australian listed companies in the ASX 100 and ASX Small Ordinaries sample groups. The research inquiries are to be examined beyond the context of anterior literature mentioned in the reappraisal. As with all accruals-based testing of net incomes direction, the ability to