The Important Role of the Auditor

Auditors play an important role in the ensuring the integrity and reliability of the financial statement for public companies. Recently (in the United Sates especially) the independence and objectivity of auditors has been a major concern, and has been brought to the forefront. A new rule was then proposed to deal with these concerns. This eventually led to the adoption of new requirements that must be followed by auditors in the United States. Many user groups had economic consequences at stake and lobbied the Securities and Exchange and Commission (SEC) to what they believed would be the best solution. This was mostly performed through submitting comments to the SEC and through participating in the public hearings held by the SEC to allow discussion on the proposed rule. This report will briefly describe independence as it relates to accounting profession, identify and describe the new requirements presented by the SEC and then describe the events and circumstances that led to the new requirements being proposed. It will also describe and assess the validity of the concerns that were stated at the various public hearings by the affected user groups. First a simple but important definition of independence and how it relates to the accounting profession will be presented. â€Å"Independence is generally understood to refer to a mental state of objectivity and lack of bias.† An auditor must perform the audit without allowing external factors to alter or effect his or her decisions. Douglas Carmichael goes on to relate independence to an auditor directly by stating â€Å"the auditor must be without bias with respect to the client since otherwise he [or she] would lack that impartiality necessary for the dependability of his [or her] findings, however excellent his [or her] technical proficiency may be.† This definition looks easy to interpret but it becomes hard to determine when an auditor is acting independently. Often, an auditor does not even realize when their own actions have been influenced by other factors. Objectivity is a state of mind and is more often than not is hard to prove. Of critical importance is the notion of independence in fact and independence in appearance. Ultimately auditors can be independent in fact but if a reasonable investor observes all relevant facts and circumstances and concludes auditors as not being independent then the whole profession suffers. An extreme consequence that could result is if investors and other financial statement users looked elsewhere for information when they are looking to invest. This would make financial reporting useless and would ultimately lead to its demise. This demonstrates the importance of auditors remaining independent of managers and reiterates the point that investors must be able to trust and rely on the financial statements. These issues directly relate to the two goals that the independence function seeks to achieve. The first goal is supply high quality audits without letting any external factors sway an auditor's judgment (objectivity). The second goal is to achieve a high level of investor confidence in the audited financial statements. The difficulty in measuring the first objective has led to more concentration and focus on the second objective. It is this decreased investor confidence that has driven the new rule requirements, because there has not been a great amount of evidence that proves there is lower quality audits being performed. Commission's Auditor Independence Requirements The release of this new rule establishes four principles to evaluate when assessing if an auditor is independent. â€Å"An auditor will not be independent when (1) has a mutual or conflicting interest with the audit client(2) audits his or her own work (3) functions as management or an employee of the audit client, or (4) acts as an advocate for the audit client.† These four principles are to be used when trying to determine if the actions of an auditor will impair the independence of an auditor and were the basis for forming the new independence requirements. They are rooted in the belief that an auditor must be independent in fact and appearance. The new rule considerably alters the number of people related to the auditor that can invest in the auditor's clients because this would violate the independence requirements released by the SEC. It also limits the number of non- auditing services that can be provided by auditors to their audit clients, but at the same time puts no restrictions on the non- auditing services that can be provided to non-audit clients. The new requirements also call for proxy disclosure in the financial statements of a company. These proxy disclosures state information on certain non-audit services performed by the auditors in the last fiscal year. â€Å"The new auditor independence rule will revise the rules for auditor independence in primarily three areas: (1) investments by auditors or their family members in audit clients; (2) employment relationships between auditors or their family members and audit clients; and (3) the scope of services provided by the audit firms to their audit clients.† ! Investments by Auditors and Family Members in Audit Clients The new rule restricts an auditor or a family member from investing in a firm's audit client. It also restricts an auditor's partner from investing in the client only if the auditor can directly influence the audit work. This new rule is left open for interpretation since if an auditor does not work on the audit he is not restricted as long as he is considered not to be influencing the audit in any way. The subjectivity is in the determining of who can or who does influence an audit. The new rule defines the auditor, family members and certain partners as â€Å"covered persons†. The new rule establishes certain situations that would find an auditor not to be independent if any covered persons participated in these situations. The rule specifically outlines that an auditor is not independent if a covered person has a direct investment in an audit client or affiliate, has a direct investment of more than five percent in an audit client, has an indirect investment in an audit client of more than five percent, and if they own more than five percent of an entity of which the audit client owns an interest. There are certain other financial relationships with an audit client that can restrict an auditor from being independent. These relationships include having loans to or from an audit client, certain savings, checking, brokerage accounts and holding certain individual insurance policies. The rule also put restrictions on certain audit clients investing in audit firms. Under the new rules an audit firm must be cautious of whom they hire and whom the client's firm hires in order to remain independent. The new rule outlines specific instances in which the auditor would be declared as not being independent. â€Å"An accountant will not be independent if a close family member of a covered person is employed by an audit client in an accounting or financial reporting role, if a partner is employed by an audit client in an accounting or financial reporting role, and if a former employee of an audit client becomes a partner of a the accounting firm.† Scope of Services Provided by the Audit Firms to Their Audit Clients This is the area of the new rule that caused the most controversy when it was first introduced. The new rule greatly reduces the number of non-audit services that an auditor can perform for audit clients. The new rule identifies certain non-audit services that cannot be provided without damaging an auditor's independence. These non-audit services are consistent with the four principles that the rule was based on. I will now highlight the certain services that an auditor cannot perform to an audit client and how these services relate to four principles that measure an auditor's independence. Services related to the audit client's accounting records or financial statements such as bookkeeping cannot be performed to an audit client. This service is restricted because it undermines the basic principle that auditors cannot audit their own work. Other non-audit services that are restricted because an auditor would end up auditing their own work are appraisal or valuation services, and actuarial services. An example of an appraisal service is when auditors are asked by their clients to value assets during the year, and then at the end of the fiscal year they are asked to perform the audit. This results in the auditors auditing their own work using their own underlying assumptions, which would directly result in bias. The same problem arises with actuarial services. When an auditor makes estimates for policy reserves and related accounts it affects the amounts that are reported on the balance sheet and will again result in auditors auditing their own work. The problem of an accountant having a mutual or conflicting interest with the audit client results in the restriction of non-audit services such as internal audit outsourcing, human resource services, broker or investment services, and financial information systems design and implementation. Internal audit outsourcing can cause managers and auditors to become a team when creating an internal control system and therefore they will both be responsible for its failure or success. If an auditor supplies a human resource service such as hiring they create a mutuality of interest because they have to accept some responsibility for ensuring the success of the employee. Supplying broker or investment services creates an interest for the auditor in increasing the value of the securities. Helping design information systems creates a mutual interest between the client and the auditor based on the success of the information system. Management functions performed by the auditor for their audit client are also restricted in the new rule. This allows the auditors to perform a management function for their clients and will inherently decrease objectivity in the audit and increases bias in the audit since the auditors are part of the firm that they are auditing. The last non-audit service that is restricted to audit clients is expert services. These include legal, administrative, or regulatory filing procedure advice. These are restricted because they give the appearance that when auditors provide these services to audit clients they are acting as an advocate for the audit client. Decisions to restrict these services were decided on using the four main principles presented earlier that evaluate an auditor's independence. The creation of these principles was due to increasing concern that auditors were not remaining totally independent when performing the audit. Circumstances Leading to the Concern for an Auditor's Independence There are a number of events in the accounting profession that led to the need for rules to obtain independent auditors. Accountants are in a profession that is seeing dramatic changes in the way firms are structured, the services they are providing, as well as increased competition. These events are creating situations that may seriously hinder the independence of auditors by giving them opportunities to act in the interests of their clients. There has been increased competition for auditing business among accounting firms. This tough competition has led to competitive pricing which in turn has led to decreased profits on audits. This tough competition has also led to auditors relying on audit clients for business more and could possibly lead to auditors acting in the best interests of management to keep their audit work instead of in the best interest of the public. Decreased profit margins are forcing accounting firms to cut costs, and some believe that the quality of audits are decreasing because of accountants are using less resources on their audits. There has also been an increasing array of services being performed by every accounting firm. Since auditing profits are decreasing many firms are looking to more profitable consulting services to help increase profits. â€Å"This has been a true metamorphosis for accounting firms, and particularly for the big firms, which some estimate now get 30 to 40% of their revenues from consulting and under 40% from accounting and auditing. Some of these firms have come to offer virtual one-stop shopping for all a client's business consulting needs.† This has caused concerns that the audit function is becoming a loss leader and is being used to pursue additional business opportunities. This causes beliefs that the quality of the audit is being harmed and that investors are seeing a lower level of confidence in this new relationship. Richard Walker, a director of the SEC's enforcement division, stated these beliefs are based not just on speculation, but on what we're seeing in our invest igations and other contacts with the profession. Walker went on to give researched examples of when an auditor has been persuaded by clients to act in the interest of the clients firm. One example he showed was a situation where the auditor was pressured to falsely improve the financial performance of the clients firm in order to receive additional consulting contracts. This should cause great concern because it is a great restraint placed on auditors to remain independent. There has also been increased pressure on managers to meet earnings expectations, and many professionals say this pressure has intensified, especially for certain types of firms. If firms miss their earnings expectations even by a slim margin the result is an immediate decrease in stock prices. This puts increased pressure on managers to do anything they can to artificially increase earnings. This puts increased pressure on the auditors to help management meet these expected earnings. The new emerging structure of accounting firms is also causing independence concerns. Over the last decade accounting firms have become bigger in size due to increased mergers, and there has also been an increase in the number of national and multi-national firms emerging. Many firms have prided themselves on being â€Å"one stop† shops for their clients. This gives the accounting firms control over many aspects and decisions of their clients firms. The problem with this is achieving independent decisions when trying to perform the audit. This causes all the problems discussed in the four principles of evaluating the independence of an auditor. There have been many circumstances emerging that have been causing independence concerns, and hopefully the new rules will be able to prevent these potential problems. However there were many people that strongly opposed many aspects of the new rule. This report will now discuss some of the concerns against the implementation of the rule as well as some strong opinions for implementing the rule immediately. Concerns Addressed at The Public Hearings Public hearings were held in New York City for all concerned parties to voice their opinions on the proposed new independence rules. Different parties that were represented were Chartered Public Accountants (CPA's), professors, officers of major non-accountant companies, and regulators. Not all their comments will be examined, only their main concerns will be highlighted and evaluated. The first comment that will be examined is from Michael Daggett, who is a director at large of the National Association of State Boards of Accountancy and a CPA. Daggett expressed the common concern that independence is critical in appearance and fact in order to retain the integrity of the accounting profession. However he had two main problems with the rule. His first recommendation was that the SEC should take a more cautious view and try not to overreact to the situation at hand. He goes on to explain that often regulatory agencies are too quick to regulate in the time of crisis and controversy. He believes that the SEC has become too focused on trying to change the â€Å"nuts and bolts† of the auditor's behavior, and has thus not been able to appropriately deal with the expansion and changing times of the profession. The SEC was faced with a potential crisis and even Daggett alluded to that idea in his testimony. The main crisis is maintaining quality audits, and to achieve this there must be independence on the auditor's part. While the SEC is trying to control an auditor's behavior in certain circumstances it is at the same time trying to deal with the changing profession and the expansion of services that are emerging. The SEC is not rushing to regulate because they see a potential crisis emerging and are simply dealing with it in advance. This is crucial and is a better solution than waiting for a number of huge audit failures to occur, and then trying to deal with it appropriately. Daggett's second problem was with the restriction put on auditors to perform human resource services of an audit client. He stated, â€Å"It's important to remember that auditor's already have an interest in its clients success. He suggests that such services would create relatively little risk and an unyielding prohibition would seem to be excessive.† Employee performance is not likely to impair an auditor's mindset and would not result in any bias. If an auditor helps choose human resource policies such as recruiting Evaluate this comment further Another CPA, Kalman Barson, gave comment on the proposed rule. He is a strong opponent to the new rule and he made sure his feelings were heard. He believes that the new rules are contrary to the best interests of the accounting profession, is counterproductive to the best interests of audit clients, and would not accomplish the goal of the reason for this rule being proposed. He believes that the new rule should be totally withdrawn because it will result in the opposite of what the SEC is trying to accomplish. He backs up his case by saying that there has not been one instance of impairment in audit quality as a result of an accounting firm also providing a consulting and auditing role simultaneously. He believes that the SEC is trying to fix something that is not broken. There are a couple of points that need to be addressed in his statements. The first is that audit quality is about more than just avoiding major audit failures or fraud cases. It must be addressed at a lower level before it becomes a major problem. This is the level that the SEC is trying to address presently. An audit failure is often a combination of several factors not just an independence issue. Trying to address the separate issues that can cause an audit failure is the first step. â€Å"To demand, as a predicate for commission action, evidence that each loss of independence produces an audit failure is a bit like demanding proof that every violation of a fire safety code results in a catastrophic fire.† Also there has been at least one instance where a firm has broken independence issues. â€Å"Price-Waterhouse Coopers was censured for improper professional conduct and violating auditor independence rules early this year (2000).† One other point that must be addressed is that with all the concerns of auditor independence that were raised while the economy is doing relatively well, what will happen when an economic hardships exist? Imagine the concerns and the pressure on auditors that will be raised when the majority of firms fall short of their earnings. This pressure could be huge and unbearable; this is why it must be dealt with now. The second major point that Barson addressed is that consulting for an audit client helps produce a higher quality audit. Understanding the clients operations and procedures more thoroughly helps the auditor to obtain a better understanding of the company and therefore the auditor is able to perform a better service for the client. This he argues is in the best interests of the client and society as a whole. He argues that inefficiencies would result by splitting up the consulting and auditing functions between firms, and would end up costing the client more in the long run. Inefficiencies would result because one firm would perform the audit and the other firm would have to perform all the consulting. This would result in the splitting of knowledge of the firm and would result in lower quality audits. The SEC does not believe that the quality of the audit will be lost and officers of Ernst and Young also carry this view. They believe that this argument is flawed in many areas. The first flaw is the inherent assumption that all knowledge obtained from non-audit services is relevant to an audit. It also assumes that the auditor receives all information received from non-audit services. Often a consulting division is reluctant to transfer information over to the auditors. Other times the consulting professionals will have little or no interaction with auditors especially in large firms. Ernst and Young recently sold their consulting business and therefore separated their auditing practice from the consulting area. Ernst and Young officials were stated as saying that as the result of the sale they see no reason why the quality of the audit would suffer in any way. They believe that the skills necessary to carry out an audit are inherently different than the skills you need to carry out consulting services. The SEC also made the point that only 25% of accounting firms audited by the big five firms also receives advisory services. This proves that 75% of the audits performed now are of considerably high quality. If it is not possible to perform audits without consulting for the firm at the same time we would have seen a huge amount of low quality audits or perhaps audit failures. A more neutral view will now be presented from the academic side of the debate. Douglas Carmichael is a professor at Baruch College and is a strong advocate for the new rule and his comments are based on research over the past thirty years. His first comment backs up the four principles that are used by the SEC to measure auditor independence. He believes that the basic principles are comprehensive and appropriate. The principle of conflicting and mutual interest is essential because without it the auditor could be too easily persuaded by clients to act in the client's interest and therefore would reduce the reliability of the financial statements. His research has also showed that there has been evidence that consulting has resulted in impaired independence. His conclusions were based on thorough investigation of the actual underlying evidence. He also argues that the quality of the audit is not improved by consulting services. † He found that in many cases of auditor malpractice, the auditors have not made use of the knowledge of consultants providing services to the clients.† His last point is that the proposed restrictions are practical and they appropriately relate to the basic four principles. He believes the new rules appropriately relate to those principles, which is key since most of the professionals can relatively agree on the principles. Since there is agreement on the principles the controversy is mostly based on the restrictions, and Carmichael believes that these restrictions already adequately relate to the principles and need to be implemented immediately. A Canadian perspective will be presented next, from the point of view of the Chair of the Ontario Securities Commission (OSC). He underlines the importance of the auditor being independent in fact and appearance. He also mainly agrees with the new rules and their restrictions on non-audit services to audit clients. His main concern relating to auditor independence in Canada is the growing concern that the audit is becoming a loss leader to achieve more profitable consulting revenues. He believes that it would be natural for shareholders and other investors to perceive the auditor as losing confidence in the quality of the audit. He also expresses his concern that firms are placing more importance on the consulting side of the business compared to the audit side. He believes that this will cause firms to make strategic decisions based on this concern and will cause employees to strive towards being consultants because the firm places more value on the consulting side. While this could result in more talented professionals leaning towards the consulting side, especially if salaries are higher there are many other concerns that affect the recruitment of professionals. Other concerns that could affect recruiting are the attractiveness of the work to the individual, as well as the number of graduates to choose from. Brown had concerns that were related to the implementation of the new rules as a whole. He expressed concern that the regulation of the new rule cannot be sufficient by itself. The audit committee will have to play an important role in the process. It is key that the audit committee identifies independence violations, because they are on the front line and are closest to the action. The SEC is only one organization and will need a critical amount of help in finding violators. He also recommends that the SEC becomes an active participant in recommending or implementing similar rules in other countries. He stresses this importance because the United States constantly interacts with all other countries and the new rules will significantly affect interactions. This is important, but it will they will have to convince the SEC to spend time on this task. It would be much easier for the SEC to recommend other countries to adopt the same requirements as the U.S. Brown goes onto illustrate this point by showing that in Canada we are looking at the SEC's proposal closely and extensively and † will formulate our regulatory response partly on your experience.† The concerns of the Institute of Internal Auditors (IIA) will now be addressed. They totally agree with the four basic principles that were outlined by the SEC. The IIA also generally agrees with the underlying objectives of the SEC in releasing these requirements (improving quality and improving investor confidence). Their main concerns have to do with the technical aspects of the rules. Their main concern is that the SEC has restricted services in the wrong manner. They believe that â€Å"not all non-audit services need to be restricted unless their fees are sufficient enough to trigger independence concerns and as long as there are no management or operating considerations that hinder independence.† They also believe the Independence Standards Board in the U.S. should be responsible for determining and updating the list of services that would impair independence. The objective list allows for easier regulation by allowing for the subjectivity to be removed. The certain restricted services were chosen because they related back to the four basic principles. This ensures that the SEC remains consistent by following a dependable framework for making decisions regarding auditor independence. One last comment to look at is from CPA, Norman Manley. He submitted comments on behalf of all forty employees of Dellinger & Deese, PLLC. They are totally opposed against the new ruling and voiced many of the same concerns that were seen from other CPA's. Their concerns can be summarized by their opening comment, â€Å"We firmly believe the proposal is unwarranted and not supported by facts, or requested by the financial and business community we both serve. Non-audit services offered by audit firms simply have not compromised auditor independence or audit failure. Focus will be on their additional concerns that were voiced at the public hearings. One concern they voiced was that the broad restriction on the non-audit services will place too much reliance on audit fees for accounting firms and this will not serve the public interest. The public interest is always an important consideration to keep in mind, but in this instance the public interest will still be served by providing high quality audits backed with investor confidence. There will still be plenty of opportunities to perform audits and the new rulings will not decrease the number of firms that require audits. They are also concerned with the quality of talent that will be recruited and retained by accounting firms. They believe that accounting professionals will have 25-40% of their market blocked by the restrictions. They further believe that this will cause professionals to choose a career where their market is wide open. They also had some economic issues that they were concerned about. The first being the inability for accounting firms to combine and obtain the economic benefits of mergers and joint ventures. Their ability to merge will be due to concerns about violating independence requirements. A firm could merge with another firm and would then become an affiliate of the accounting firm. They also believe that the SEC has interfered with the work of the Independence Standards Board (ISB) in the USA. The believed the SEC originally assigned the issue to the ISB and then jumped in and regulated prematurely. However, the SEC worked more in conjunction with the ISB by taking their research and many of their recommendations. They also agreed more with recent disclosure and audit committee requirements that were adopted by the ISB, SEC, New York Stock Exchange (NYSE), and the American Stock Exchange (ASE). They believe that these requirements would have of solved the independence problem if given time to mature and work. To conclude their concerns with the new rule one more point will be issued. They know and thoroughly understand the problems associated with a lack of independence, and they stated that they always put independence rules at the top of their priorities. They do not see a problem with non-audit services impairing this independence because auditors have the ability to remain independent using their own professional judgment. This report will conclude by drawing on comments given by chairman of the SEC, Arthur Levitt. He believes â€Å"in this environment of conflicting interests, the investing public relies on the accountant to stay true to his or her fiduciary duty, to never lose sight of the precious franchise that is theirs to guard so vigilantly.† He is aware that the perceived value of the audit is being put at risk and for this and other reasons he is strongly committed to keeping the public's interest first, and will not let new circumstances interfere with his task. He also realizes that the SEC cannot do it alone and is willing to work with the profession to continuously improve the situation. He is dedicated to continuous improvement of financial statements to better serve investors, the market, and the public. He stresses that he will leave the communication lines open between the SEC and CPA's in order to retain a strong respect and teamwork between the two parties. The majority of opposition seems to be coming from a main source. The CPA's seem to be the only interest group that is opposed, and this strengthens the validity of the new rulings. If there was strong opposition stemming from other interest groups it would be easier to challenge the new ruling. The point to remember is that being an accounting professional entails looking out for the best interests of the public, and this is what the new requirements are striving to achieve. The new requirements will not be able o achieve this alone, but they are an important aspect in the battle for independence. The main concern from the opposition of the rule has to deal with the scope of services that are restricted. Limiting non-audit services to audit clients still leaves plenty of opportunity open to perform audits and still makes it attainable to perform high quality audits while at the same time retaining investor confidence. We must remember, â€Å"It's not enough that audit quality is maintained and that the numbers are right. It's also necessary that public investors-the users of financial reports-perceive that the numbers are right.†

Integrated Circuit Design

Integrated circuit design, or IC design, is a subset of electrical engineering and computer engineering, encompassing the particular logic and circuit design techniques required to design integrated circuits, or ICs. ICs consist of miniaturized electronic components built into an electrical network on a monolithic semiconductor substrate by photolithography. IC design can be divided into the broad categories of digital and analog IC design. Digital IC design is to produce components such as microprocessors, FPGAs, memories (RAM, ROM, and flash) and digital ASICs. Digital design focuses on logical correctness, maximizing circuit density, and placing circuits so that clock and timing signals are routed efficiently. Analog IC design also has specializations in power IC design and RF IC design. Analog IC design is used in the design of op-amps, linear regulators, phase locked loops, oscillators and active filters. Analog design is more concerned with the physics of the semiconductor devices such as gain, matching, power dissipation, and resistance. Fidelity of analog signal amplification and filtering is usually critical and as a result, analog ICs use larger area active devices than digital designs and are usually less dense in circuitry. Modern ICs are enormously complicated. A large chip, as of 2009 has close to 1 billion transistors. The rules for what can and cannot be manufactured are also extremely complex. An IC process as of 2006 may well have more than 600 rules. Furthermore, since the manufacturing process itself is not completely predictable, designers must account for its statistical nature. The complexity of modern IC design, as well as market pressure to produce designs rapidly, has led to the extensive use of automated design tools in the IC design process. In short, the design of an IC using EDA software is the design, test, and verification of the instructions that the IC is to carry out FundamentalsIntegrated circuit design involves the creation of electronic components, such as transistors, resistors, capacitors and the metallic interconnect of these components onto a piece of semiconductor, typically silicon. A method to isolate the individual components formed in the substrate is necessary since the substrate silicon is conductive and often forms an active region of the individual components. The two common methods are p-n junction isolation and dielectric isolation. Attention must be given to power dissipation of transistors and interconnect resistances and current density of the interconnect, contacts and vias since ICs contain very tiny devices compared to discrete components, where such concerns are less of an issue. Electromigration in metallic interconnect and ESD damage to the tiny components are also of concern. Finally, the physical layout of certain circuit subblocks is typically critical, in order to achieve the desired speed of operation, to segregate noisy portions of an IC from quiet portions, to balance the effects of heat generation across the IC, or to facilitate the placement of connections to circuitry outside the IC. Design stepsA typical IC design cycle involves several steps: 1. Feasibility study and die size estimate 2. Functional verification 3. Circuit/RTL design 4. Circuit/RTL simulation Logic simulation 5. Floorplanning 6. Design review 7. Layout 8. Layout verification 9. Static timing analysis 10. Layout review 11. Design For Test and Automatic test pattern generation 12. Design for manufacturability (IC) 13. Mask data preparation 14. Wafer fabrication 15. Die test 16. Packaging 17. Post silicon validation 18. Device characterization 19. Tweak (if necessary) 20. Datasheet generation Portable Document Format 21. Ramp up 22. Production 23. Yield Analysis / Warranty Analysis Reliability (semiconductor) 24. Failure analysis on any returns 25. Plan for next generation chip using production information if possible Digital designRoughly speaking, digital IC design can be divided into three parts ESL design: This step creates the user functional specification. The user may use a variety of languages and tools to create this description. Examples include a C/C++ model, SystemC, SystemVerilog Transaction Level Models, Simulink and MATLAB. RTL design: This step converts the user specification (what the user wants the chip to do) into a register transfer level (RTL) description. The RTL describes the exact behavior of the digital circuits on the chip, as well as the interconnections to inputs and outputs. Physical design: This step takes the RTL, and a library of available logic gates, and creates a chip design. This involves figuring out which gates to use, defining places for them, and wiring them together. Note that the second step, RTL design, is responsible for the chip doing the right thing. The third step, physical design, does not affect the functionality at all (if done correctly) but determines how fast the chip operates and how much it costs. RTL designThis is the hardest part, and the domain of functional verification. The spec may have some terse description, such as encodes in the MP3 format or implements IEEE floating-point arithmetic. Each of these innocent looking statements expands to hundreds of pages of text, and thousands of lines of computer code. It is extremely difficult to verify that the RTL will do the right thing in all the possible cases that the user may throw at it. Many techniques are used, none of them perfect but all of them useful – extensive logic simulation, formal methods, hardware emulation, lint-like code checking, and so on. A tiny error here can make the whole chip useless, or worse. The famous Pentium FDIV bug caused the results of a division to be wrong by at most 61 parts per million, in cases that occurred very infrequently. No one even noticed it until the chip had been in production for months. Yet Intel was forced to offer to replace, for free, every chip sold until they could fix the bug, at a cost of $475 million (US). Physical design It has been suggested that this article or section be merged with Physical design (electronics). (Discuss) Here are the main steps of physical design. In practice there is not a straightforward progression – considerable iteration is required to ensure all objectives are met simultaneously. This is a difficult problem in its own right, called design closure. Floorplanning: The RTL of the chip is assigned to gross regions of the chip, input/output (I/O) pins are assigned and large objects (arrays, cores, etc. ) are placed. Logic synthesis: The RTL is mapped into a gate-level netlist in the target technology of the chip. Placement: The gates in the netlist are assigned to nonoverlapping locations on the die area. Logic/placement refinement: Iterative logical and placement transformations to close performance and power constraints. Clock insertion: Clock signal wiring is (commonly, clock trees) introduced into the design. Routing: The wires that connect the gates in the netlist are added. Postwiring optimization: Performance (timing closure), noise (signal integrity), and yield (Design for manufacturability) violations are removed. Design for manufacturability: The design is modified, where possible, to make it as easy and efficient as possible to produce. This is achieved by adding extra vias or adding dummy metal/diffusion/poly layers wherever possible while complying to the design rules set by the foundry. Final checking: Since errors are expensive, time consuming and hard to spot, extensive error checking is the rule, making sure the mapping to logic was done correctly, and checking that the manufacturing rules were followed faithfully. Tapeout and mask generation: the design data is turned into photomasks in mask data preparation. Process cornersProcess corners provide digital designers the ability to simulate the circuit while accounting for variations in the technology process. Analog designBefore the advent of the microprocessor and software based design tools, analog ICs were designed using hand calculations. These ICs were basic circuits, op-amps are one example, usually involving no more than ten transistors and few connections. An iterative trial-and-error process and â€Å"overengineering† of device size was often necessary to achieve a manufacturable IC. Reuse of proven designs allowed progressively more complicated ICs to be built upon prior knowledge. When inexpensive computer processing became available in the 1970s, computer programs were written to simulate circuit designs with greater accuracy than practical by hand calculation. The first circuit simulator for analog ICs was called SPICE (Simulation Program with Integrated Circuits Emphasis). Computerized circuit simulation tools enable greater IC design complexity than hand calculations can achieve, making the design of analog ASICs practical. The computerized circuit simulators also enable mistakes to be found early in the design cycle before a physical device is fabricated. Additionally, a computerized circuit simulator can implement more sophisticated device models and circuit analysis too tedious for hand calculations, permitting Monte Carlo analysis and process sensitivity analysis to be practical. The effects of parameters such as temperature variation, doping concentration variation and statistical process variations can be simulated easily to determine if an IC design is manufacturable. Overall, computerized circuit simulation enables a higher degree of confidence that the circuit will work as expected upon manufacture. Coping with variabilityA challenge most critical to analog IC design involves the variability of the individual devices built on the semiconductor chip. Unlike board-level circuit design which permits the designer to select devices that have each been tested and binned according to value, the device values on an IC can vary widely which are uncontrollable by the designer. For example, some IC resistors can vary  ±20% and ? of an integrated BJT can vary from 20 to 100. To add to the design challenge, device properties often vary between each processed semiconductor wafer. Device properties can even vary significantly across each individual IC due to doping gradients. The underlying cause of this variability is that many semiconductor devices are highly sensitive to uncontrollable random variances in the process. Slight changes to the amount of diffusion time, uneven doping levels, etc. can have large effects on device properties. Some design techniques used to reduce the effects of the device variation are: Using the ratios of resistors, which do match closely, rather than absolute resistor value. Using devices with matched geometrical shapes so they have matched variations. Making devices large so that statistical variations becomes an insignificant fraction of the overall device property. Segmenting large devices, such as resistors, into parts and interweaving them to cancel variations. Using common centroid device layout to cancel variations in devices which must match closely (such as the transistor differential pair of an op amp). VendorsThe four largest companies[citation needed] selling electronic design automation tools are Synopsys, Cadence, Mentor Graphics, and Magma.

Business Environment

Purposes: mission; vision; aims; objectives; goals; values; profits; market share; growth; return on capital employed (ROCE); sales; service level; customer satisfaction; corporate responsibility; ethical issues Stakeholders: owners; customers; suppliers; employees; debtors; creditors; financial institutions (banks, mortgage lenders, credit factors); environmental groups; government agencies (central government, local authorities); trade unions Responsibilities of organizations: stakeholder interests; conflict of expectations; power- influence matrix; satisfying stakeholder objectives; legal responsibilities e. g. consumer legislation, employee legislation, equal opportunities and anti-discriminatory legislation, environmental legislation, health and safety legislation; ethical issues egg environment, fair trade, global warming, charter compliance e. g. Banking Code 2 Understand the nature of the national environment in which businesses operate Economic systems: the allocation of scarce resources; effective use of resources; type of economic system eg command, free enterprise, mixed, transitional The UK economy: size (gross domestic product, gross national product); structure; population; labour force; growth; inflation; balance of payments; balance of trade; exchange rates; trading partners; public finances (revenues, expenditure); taxation; government borrowing; business behaviour eg investment, objectives, risk awareness; cost of capital; consumer behaviour; propensity to save; propensity to spend; tastes and preferences Government policy: economic goals; fiscal policy: control of aggregate demand; central and local government spending; Public Sector Net Borrowing (PSNB) and Public Sector Net Cash Requirement (PSNCR); euro convergence criteria, monetary policy; interest rates; quantitative easing; private finance initiative (PFI); competition policy (up-to-date legislation including Competition Act 1998, Enterprise Act 2002); Competition Commission, Office of Fair Trading; Directorate General for Competition); European Commission); sector regulators eg Ofgem, Ofwat, Civil Aviation Authority; Companies Acts; regional policy; industrial policy; enterprise strategy; training and skills policy 3 Understand the behaviour of organisations in their market environment Market types: perfect competition, monopoly, monopolistic competition, oligopoly, duopoly; competitive advantage, strategies adopted by firms; regulation of competition Market forces and organisational responses: supply and demand, elasticity of demand; elasticity of supply; customer perceptions and actions, pricing decisions; cost and output decisions; economies of scale, the short run; the long run, multi-national and transnational corporations; joint ventures, outsourcing; core markets; labour market trends; employee skills, technology; innovation; research and development; core competencies; business environment (political, economic, social, technical, legal, environmental); cultural environment 4 Be able to assess the significance of the global factors that shape national business activities Global factors: international trade and the UK economy; market opportunities; global growth; protectionism; World Trade Organisation (WTO); emerging markets (BRIC economies – Brazil, Russia, India, China); EU membership; EU business regulations and their incorporation in to UK law; EU policies eg agriculture (CAP), business, competition, growth, employment, education, economics and finance, employment, environment, science and technology, regional); labour movement; workforce skills; exchange rates; trading blocs (eg monetary unions, common markets; customs unions, free trade areas); labour costs; trade duties; levies; tariffs; customs dues; taxation regimes; international competitiveness; international business environment (political, economic, social, technical, legal, environmental); investment incentives; cost of capital; commodity prices; intellectual property; climate change eg Kyoto Protocol, Rio Earth Summit; third world poverty; the group of 20 (G-20); global financia l stability Learning outcomes and assessment criteria Learning outcomesOn successful completion of this unit a learner will:| Assessment criteria for passThe learner can:| LO1 Understand the organizational purposes of businesses| 1. 1 identify the purposes of different types of organisation1. 2 describe the extent to which an organisation meets the objectives of different stakeholders1. explain the responsibilities of an organisation and strategies employed to meet them| LO2 Understand the nature of the national environment in which businesses operate| 2. 1 explain how economic systems attempt to allocate resources effectively2. 2 assess the impact of fiscal and monetary policy on business organizations and their activities2. 3 evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organisation| LO3 Understand the behaviour of organizations in their market environment| 3. 1 explain how market structures determine the pricing and output decisions of businesses3. 2 illustrate the way in which market forces shape organizational responses using a range of examples3. judge how the business and cultural environments shape the behaviour of a selected organisation| LO4 Be able to assess the significance of the global factors that shape national business activities| 4. 1 discuss the significance of international trade to UK Business organisation4. 2 analyse the impact of global factors on UK business organizations4. 3 evaluate the impact of policies of the European Union on UK business organizations. | GRADE DESCRIPTORS Learners would be graded as ‘PASS, MERIT or DISTINCTION. The indicative characteristics for each grade are mentioned below: Pass grade:A pass grade is achieved by meeting all the requirements defined in the assessment criteria for pass for each unit. Merit grade: Merit descriptors| Indicative characteristics| In order to achieve a merit the learner must:| The learner’s evidence shows for example:| IdentifyandapplyStrategiestofind appropriate solutions| ? Effective judgments have been made? Complex problems with more than one variable have been explored? An effective approach to study and research has been applied| Select/design and apply appropriateMethods/techniques| ? Relevant theories and techniques have been applied? A range of methods and techniques have been applied? A range of sources of information has been used? The selection of methods and techniques/sources has been justified? The design of methods/techniques has been justified? Complex information/data has been synthesized and processed? Appropriate learning methods/techniques have been applied| Present and communicateappropriate findings| ? The appropriate structure and approach has been used? Coherent, logical development of principles/concepts for the intended audience? A range of methods of presentation have been used and technical language has been accurately used? Communication has taken place in familiar and unfamiliar contexts? The communication is appropriate for familiar and unfamiliar audiences and appropriate media have been used| Distinction grade: Distinction descriptors| Indicative characteristics| Inordertoachieveadistinctionthelearner must:| The learner’s evidence shows for example:| Use critical reflection to evaluate own work and justify valid conclusions| ? Conclusions have been arrived at through synthesis of ideas and have been justified? The validity of results has been evaluated using defined criteria? Self-criticism of approach has taken place? Realistic improvements have been proposed against defined characteristics for success| Take responsibility for managing and organizing activities| ? Autonomy/independence has been demonstrated? Substantial activities, projects or investigations have been planned, anaged and organized? Activities have been managed? The unforeseen has been accommodated? Theimportanceofinterdependencehasbeen recognized and achieved| DemonstrateConvergent/lateral/creative thinking| ? Ideas have been generated and decisions taken? Self-evaluation has taken place? Convergent and lateral thin king have been applied? Problems have been solved? Innovation and creative thought have been applied? Receptiveness to new ideas is evident? Effective thinking has taken place in unfamiliar contexts| Assignment Unit 1 McCain McCain is the worlds largest producer of chips. Its range includes other potato products like hash browns and waffles. It buys 12% of the UK potato crop. It is also one of the biggest suppliers of frozen light meals. External factors Businesses set themselves aims. These help them to be efficient. For instance, they may aim to increase sales or make more profit. It then plans to reach these aims. To do this it must look at its own strengths. These are called internal factors. It must also look at outside influences. These are called external factors. McCain looks at changes in these. This helps it to plan how to respond. SLEPT SLEPT is one tool that can be used to look at external factors. It can be used to measure their effect. The letters in SLEPT stand for five factors. These are * Social Legal * Environmental * Technological and * Political. McCain dealt with these factors as follows: Social and Legal factors Social A number of campaigns have told people to eat in a more healthy way. This led to falling sales for some McCain products. McCain responded by reducing the salt and oil in its potato pr oducts. It also sent out the message that its chips were not unhealthy. Legal Governments pass laws, and set standards. McCain has to obey the law or set its own, higher, standards. The Food Standards Agency has developed a system of traffic light labels. These are designed to help consumers see which products may be less healthy. The food industry uses a system based on Guideline Daily Amounts. These GDAs are what an average person should eat to stay healthy. McCain uses both of these. All of its potato products can display the green traffic light (low levels) for saturated fat. None of its products displays a red traffic light (for high levels) in any category. Economic, Political and Technological Factors Economics 100 Edition 12 This refers to changes in buying habits. Income is rising, but people have less time to spend it. This is called being cash-rich but time-poor. This leads to more demand for convenience foods. To meet this challenge McCain provides a range of products to suit different tastes. Political There is government pressure for suppliers to come up with healthier foods. McCain supports the government. It believes that the foods it provides are healthy when prepared properly. Technological The technology used to prepare food is fast moving. McCains food technologists have made its potato products more healthy. They have reduced levels of fat and salt but still maintained flavour. This was achieved through a switch to sunflower oils. This reduced saturated fats by 70%. Conclusion Businesses must take account of changes in external factors. Change comes from a number of sources. Each presents a challenge. McCain is a business focused on the market. It knows that it is vital to keep customers happy. It has listened to what customers want and made changes in response. It aims to give them the best value chips and other healthy food products. Task 1 1. 1 Using working example or the case the study indentify the purposes of different types of organisation. (Outcome 1. 1) 1. 2 Using an example of your choice illustrate how an organisation meets the objectives of different stakeholders. (Outcome 1. 2) 1. 3 Using the case study, explain the responsibilities of an organisation and the strategies employed to meet them. (Outcome 1. 3) Task 2 2. 1 Illustrate how economic systems attempt to allocate resources effectively. Use the case study to illustrate your answer. (Outcome 2. 1) 2. Fiscal and monetary policy affects business organisations and their activities, disucuss this with a working example of your choice. (Outcome 2. 2) 2. 3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of an organisation of your choice or that or the case study. (Out come 2. 3) Task 3 3. 1 Pricing and output decisions of an organisation are determined by market structures. In your opinion is this true. (Outcome 3. 1) 3. 2 Using a working example of your choice show how market forces shape organisational responses. (Outcome 3. 2) 3. 3 Using an example of your choice discuss how the business and cultural environment shape the organisations behaviour. (Outcome 3. 3) Task 4 4. What is the significance of international trade to the UK business organisation? (Outcome 4. 1) 4. 2 The impact of global factors on UK business organisations is quite variable, discuss. (Outcome 4. 2) 4. 3 Discuss the impact of policies of the European Union on the UK business organisations. (Outcome 4. 3) To achieve a Pass/Distinction or Merit student must address all the above criteria by producing a word processed report of 2500- 3500 words. Reports must be supported by appropriate referencing. The report must be submitted by the required formal submission date by 5pm at r eception where a receipt will be given. The Times 100 Edition 12

Why ships sink Essay Example | Topics and Well Written Essays - 750 words

Why ships sink - Essay Example One of the main reason due to which the most beautiful and expensive ships have sank is that the ship experienced a crash with another hard object. Due to this collision the ships ended up being wrecked completely. Ships have experienced a crash with another oncoming ship or a boat and ships have even crashed with icebergs and have been completely destroyed. For example: one of the major incidents of ship sinking caused due to a collision or a crash was experienced by Titanic during the period of 1912 and there are several reasons that may have caused this incident. One of the reasons that are believed to be reason of this crash was that Titanic crashed into an iceberg (McCollum 9). A second reason due to which several ships have sunk over the history is that these ships failed to withstand rough sea weathers. Those who are responsible for piloting a ship are at time faced with moving the ship within heavy storms. Sometimes these storms become so strong that they do not only cause da mage to the ship, they even tear the entire ship into different pieces. For example the ship wreck of the ship called MV Derbyshire that took place during the period of 1980 was caused because it was badly beaten up by a typhoon and the end result was that the ship sank (McCollum 13). Ships even sink due to technical issues such as problems with significant machines that are responsible for the smooth movement of the ships. For example, in the case of Estonia that sunk during the period of 1994, it was reported that the ship sank because water entered inside the ship as one of the doors of the ship was not properly sealed and the doors of the ships is one of the most important equipment which is essential for the safety of the ship (Kinzer 1). The outcomes of ship sinking are extremely disastrous as some of the outcomes include loss of the life of huge number of people. There are various individuals who travel in one particular ship at

I want you to choose the appropriate topic Essay

I want you to choose the appropriate topic - Essay Example The government leaders of Centralia did not act on the side of the public’s interest. The public included the miners who died due to the government leaders’ faulty public administration acts. In the article â€Å"The Blast in Centralia No. 5†, there was an important need for a strong and effective public system in the Centralia, Illinois community. The article shows that 111 miners died from the mine blast. The blast occurred in Centralia, Illinois more than generations ago (Stillman, 2009). The issues that arose from the mine blast focused on the selfish interests of some government officials and the mine owners. The mine owner, Centralia Coal Company, was more interested in generating profits from the mine diggings, not the miners’ safety. The mine owners refused to implement the safety recommendations issued by the safety professionals. Likewise, the Centralia government leaders must answer for the mine blast casualties. The blast report sent to the gov ernment agency, Illinois Department of Mines and Minerals, proved some Centralia administrators were not prioritizing the public’s interest (Stillman, 2009). Further, to be more effective and efficient, the government’s political setup should focus on generating favorable outputs that benefit the community. The 28th U.S. President, Woodrow Wilson emphasized that government leaders must balance the issues of constitutional democracy and â€Å"inherent concerns for popular control and participation with the theories of efficient, professional administration, and their stress on systematic rules and internal procedures as distinct from democratic oversight and influence.† (Stillman, 2009). Wilson insists that the people MUST elect professionals that include doctors, engineer, lawyers, and others who have the political will to serve the public’s interest, during their stint as political bosses of the community. Political bosses include mayors and senators. An effective

An Unlicensed Engineer for Constructing Engineers Case Study

An Unlicensed Engineer for Constructing Engineers - Case Study Example It is evidently clear from the discussion that Charles Landers, unlicensed engineer for constructing engineers forged his partner Henry Wilson’s signature and used his professional seal on at least 40 documents. The falsified documents certified to the Anchorage City Health Department that local septic systems met all city wastewater disposal regulations. No violations of standards except for the forgery and misuse of the seal were reported. The circuit judge Michael Wolverton in his judgment banned Landers for one year from practicing as an engineer’s assistant. Furthermore, he sentenced him to 20 days in jail, 160 hours of community service, $4000 in fines and a year of probation. The judge cited that Landers’ actions constituted a breach of public trust as the public relies on the word of professional engineers to ensure the safety of systems. The first important element is that of forgery of signatures and unauthorized use of an engineer’s seal. This i s not only wrong in engineering but also in other professions where specialized professionals are required to provide their expertise on an issue. This can lead to a destruction of property, loss of lives and reputational damage to the profession among others. The second element is the aspect of canvassing and behaving like a competent engineer while in the real sense one is not. This amounts to deceiving the public for purposes of individual gains, which is unethical as this could still have far-reaching consequences because a violation of standards may be experienced. The third element concerns relationship with fellow engineers such that they are supposed to respect one another in the provision of their services. The relationship is important for personal and also for professional growth.

Diversity paper Essay Example | Topics and Well Written Essays - 1250 words

Diversity paper - Essay Example " The emergence of diversity in the workplace has been brought about by the rapid changes and development in the domestic and global market. This current workforce strategy is seen as business organization's response in coming with the demands of the new business environment. Diversity hiring is the new trend in choosing the employees to work for an organization. As more and more companies are embracing this new system, more reports and empirical evidences are also reported which support direct hiring. This is their way of aligning their resources to take advantage of the present opportunities, generate revenues, increase market share, and squeeze more profits from their sales. Diversity in the workforce had also increased retention, recruitment, and promotion of employees as well as decreased litigation and complaints. This paper further look at how a business organization benefits from utilizing a diversified workforce. The rationale in favoring a human resource with different origins, backgrounds, interests, and status is fairly simple: diversity will is able to pool together various talents, ideas, skills, and knowledge which serves the highly diversified market served by a business institutions. The task then of an organization is to efficiently manage the different behavior of employees in a diversified workforce. ... Since childhood, we are taught that some things like colors, gestures, dress, and expressions are only attributable for a girl or for a boy. For example, pink is the color which is associated to a baby girl while blue is for a boy. The existence of double sexual standard in the community is also another huge factor shaping the behavior of both genders. It should be noted that double standards clearly delineate and dictate the actions which can be done by both genders. One of the most famous sexual double standard is the stud-slut dichotomy. Thus, the society has a definite expectation of how different members of both sexes. This, together with the environment of individual differentiates the behavior of male and female. Societies dictate that men are supposed to be more rational than women. Aggressive and dominant behavior is also strongly linked to being a man. Due to their physical structure, men are regarded for their strength and flexibility. These conceptions have largely influenced the behavior of men in our society. In business organizations, some jobs which require physical strength are only made available for men. Most executive level managerial positions are also being occupied by the male specie as women are regarded to have inferior ability. It had also become insulting for men to have women in high level management because they are more irrational. While men always behave as the stronger and more aggressive sex, women's behavior are more refined and nurturing. Women are expected to be nice-"never fights or argues, making negotiation and conflict-resolution (Vermuelen 2006)." Accordingly, these characteristics are still entrenched in the modern women. Females are less dominant, less aggressive, more assertive, and more in touch with their