Saturday, February 22, 2020

Audit Industry Report - Airlines Essay Example | Topics and Well Written Essays - 1500 words

Audit Industry Report - Airlines - Essay Example As a comparison between two airlines, higher performance may just not be a measure of a better unit revenue as for many, the airliner may be facing a higher unit cost in contrast to others operating within the same industry. In parallel to all these factors, capital available for growth or horizontal and vertical integration of services is also a key factor to the industry’s long term success (Taneja, 1987). Many successful airliners may have to prefer long term gains and profits to measure their success and would plan to expand or integrate over a longer period of time. Specifically for the airline industry, growth may be accounted for in terms of the capacity for growth. (2007) reports that the United States airlines industry grew by more than 8 percent in 2006 which placed it at a combined value of more than $145 Billion. However, In order to grow, an airline and the industry itself would need more funding. The need for funding will be directly correlated to the performance of the company, as capital is generated form investors and for most equity investors, the airline may have to show growth in its equity over time. Moreover, apart the airline must also be a viable interest to the debt investors. For this to happen, and to conform with the debt investors, a more than reasonable ratio of debt-to-asset is required. Apart from the focus on these direct factors that influence investment, there are several other key factors that play a turning role in raising capital for the airline industry and more focus is placed on international expansion. To wage international expansion into the equity of an airline, a risk assessment factor has to be incorporated in the financial sheet of the airlines in such a way that it has to reflect more associated risks such as currency risks or political risks. These forms of risks are more appropriate

Thursday, February 6, 2020

Financial Contracts in Islamic law compared to that of American Law Dissertation

Financial Contracts in Islamic law compared to that of American Law - Dissertation Example Financial contracts can be entered in both written and verbal formats and must be discussed and accepted during a single meeting without any noticeable interruptions including multiple negotiation sessions or changes in the meeting venue. Unlike provisions under American law, Islamic financial contracts can be accepted based on personal conduct of the parties (Hassan, 2007). Under special circumstances, non-responsiveness to a given contract proposal is taken as an acceptance. Islamic law also allows further flexibility among parties within a given meeting session whereby parties have the right to refuse a contract up to the point when either party leaves the meeting venue physically. However, variations do exist over the interpretation, implementation and recognition of this feature even within countries where Islamic finance is practiced (Vogel, 2008). Contents of the financial contracts under Islamic law are prohibited from discussing or relating with any item prohibited by the re ligion. Such substances include alcohol and tobacco besides prohibition on gambling. All applicable items that constitute the contract content must further be in the possession or ownership of either party and legally exist at the time of the initiation of the contract (Rayner, 2001). In simple words, items that will be devised in the future may not be included in an Islamic contract. Specific properties of all these items including specifications, origin and quality must be clearly states in the terms of the contract. Other than deals that involve the exchange of money, the exact price at which the goods will be delivered should be agreed upon prior to contract agreement (Hassan, 2007). Contracts based on future prices that are speculative in nature are not allowed and cannot be developed based on the advice of a third party. While there are several types of Islamic financial contract, the most common one that is used for sale and exchange of goods is known as mu’awadat. Goo ds can be sold either for money or can be exchanges as part of a barter transaction. Even exchange of money is valid under Islamic contract. Real estate or equipment can be leased to external parties by using another type of contract known as the ‘ijara’ (Vogel, 2008). The concept of Islamic contracts has been in existence for several centuries in regions like the Middle East, Asia and North Africa where Islam continues to be a major religion (Ayub, 2009). Islamic finance is considered as a tool from the almighty and is based upon relevant Islamic principles that place a high value on moral principles that is expected of all followers of the religion. Conventional American law is aimed at helping create contracts that are ‘ethical’ in nature. Islamic finance advocates a similar approach when developing contracts and related transactions. However, this feature must not lead to an assumption that Islamic contracts bear a close resemblance with Western contrac ts (Rayner, 2001). In fact, contracts agreed upon under Islamic law are rather less binding than conventional American contracts that imply all aspects covered under them. Legal advice and further scrutiny is thus necessary in the case of Islamic contracts to understand the circumstances under which a contract may not be valid. In addition, the application of Islamic contracts has not been uniform across the Islamic world. While countries like Pakistan and Iran apply Islamic law in a stringent fashion, other countries