Management is responsible for the preparation and fair presentation of the consolidated financial statement of JP Morgan Chase Bank N.A. in accordance of GAAP. The main purpose is to recognize any reasonable assurance to test the consolidated financial statements of any material misstatements. The audit of JP Morgan Chase Bank N.A. present fairly, in material respects, the financial positioning of the firm. The FASB issued revenue recognition guidance with the intent of creating greater consistency with respect to revenue from customers, by how and when contracts will be represented on the income lines. Guidance states that revenue from contracts with customers must be recognized upon delivery of a good or service based on the amount …show more content…
of consideration expected to be received. It must also include extra disclosures about revenue. Banks obtains fees from interest on loans, credit cards, etc. The AICPA has specific rules and instructions for banks and savings institutions. Interest income, is sourced from GAAP accrual basis. Because of the fees from various commercial banks the FASB and the AICPA have issued the most recently used document for guidance. EITF Issue No. 97-3, Accounting for Fees and Costs Associated with Loan Syndications and Loan Participations after the Issuance of FASB Statement 125; FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities — a replacement of FASB Statement No. 125; AICPA Practice Bulletin No. 5, Income Recognition on Loans to Financially Troubled Countries; AICPA Practice Bulletin No. 6, Amortization of Discounts on Certain Acquired Loans. According to the 10-K form, the company’s total revenue is generated by the following business lines: Considering the average total revenue for three years is $17.8B, the materially significant line of business should meet a threshold of 5% -- therefore the only variable which does not meet such criterion is All Other Income in accordance with the table provided above. Based on the JPMorgan Chase Bank 2015 10-kform, the firm is exposed to the following risks: Regulatory Risk • JPMorgan Chase operates within a highly regulated industry, and the Firm’s businesses and results are significantly affected by the laws and regulations to which the Firm is subject. • Expanded regulatory and governmental oversight of JPMorgan Chase’s businesses may continue to increase the Firm’s costs and risks. • Requirements for the orderly resolution of the Firm could require JPMorgan Chase to restructure or reorganize its businesses, and holders of JPMorgan Chase’s debt and equity securities would be at risk of absorbing losses if the Firm were to enter into a resolution. Market Risk • JPMorgan Chase’s results of operations have been, and may continue to be, adversely affected by U.S. and global financial market and economic conditions. Credit Risk • The financial condition of JPMorgan Chase’s customers, clients and counterparties, particularly other financial institutions, could adversely affect the Firm. • Concentration of credit and market risk could increase the potential for significant losses. Liquidity Risk • If JPMorgan Chase does not effectively manage its liquidity, its business could suffer. • Proposed banking regulations relating to liquidity, including U.S. rules relating to total loss-absorbing capacity, could require JPMorgan Chase to issue a substantial amount of new debt, and thereby significantly increase its funding costs. • Reductions in JPMorgan Chase’s credit ratings may adversely affect its liquidity and cost of funding, as well as the value of debt obligations issued by the Firm. Legal Risk • JPMorgan Chase faces significant legal risks, both from regulatory investigations and proceedings and from private actions brought against the Firm.
Other Business Risks • JPMorgan Chase’s operations are subject to risk of loss from unfavorable economic, monetary and political developments in the U.S. and around the world. • JPMorgan Chase’s operations in emerging markets may be hindered by local political, social and economic factors, and may be subject to additional compliance costs and risks. • JPMorgan Chase relies on the effectiveness and integrity of its processes, operating systems and employees, and those of third parties, and certain failures of such processes or systems or misconduct by such employees could materially and adversely affect the Firm’s …show more content…
operations. • A breach in the security of JPMorgan Chase’s systems, or those of other market participants, could disrupt the Firm’s businesses, result in the disclosure of confidential information, damage its reputation and create significant financial and legal exposure for the Firm.
Risk Management • JPMorgan Chase’s framework for managing risks and its risk management procedures and practices may not be effective in identifying and mitigating every risk to the Firm, thereby resulting in losses. Other Risks • The financial services industry is highly competitive, and JPMorgan Chase’s inability to compete successfully may adversely affect its results of operations. • JPMorgan Chase’s ability to attract and retain qualified employees is critical to its success. • JPMorgan Chase’s financial statements are based in part on estimates and judgments which, if incorrect, could result in unexpected losses in the future. • Lapses in disclosure controls and procedures or internal control over financial reporting could materially and adversely affect the Firm’s operations, profitability or reputation. • Damage to JPMorgan Chase’s reputation could damage its
businesses.
Introduction This paper will analyze the mission and vision statements of JPMorgan Chase & Co against the performance of the organization. An evaluation of how well the company lives out its mission and vision statement will be provided. The organization’s strategic goals linked to the company’s mission and vision will be assessed. An analysis of the company’s financial performance to determine the link between the company’s strategic goals, strategy, and its financial performance. A competitive and marketing analysis of JPMorgan Chase & Co will be conducted to determine its strengths and opportunities.
One of the most debatable topics in the accounting industry today is the extent in which we should make the financial statements understandable to the general population. The FASB currently gears its reporting standards toward...
Recognized as one of the largest and oldest financial institutions in the world, JP Morgan Chase & Co is the world’s fourth largest bank by total assets. Dating back as far as 1799 where its earliest predecessor was established in New York, JPMorgan Chase & Co was founded in 2000 during a merger between Chase Manhattan Corporation and JP Morgan & Co. Today it has developed into one of the world’s top multinational banking and financial services holding company. Built from the foundation of more than 1200 former institutions, comes the JP Morgan Chase and Co brand that leads in the finances and advancement of the United States and the economy.
It is easy to see how it affects the corporation, a misguidance on their balance sheet will eventually catch up to them. If prices of their goods began to fall, they cannot keep changing their inventory system. The company will eventually have to show the higher priced goods as sold. Beyond the corporation it will affect the bank that gives the company the loan. The bank is being misled to believe that the company is grossing a higher net profit, thus the bank is expecting to be repaid the debt, even though the company may not be able to afford it. The stock holders of the corporation would be greatly affected if these numbers were to be published. From an investor standpoint, the company would look like a rapidly growing entity. They would have a decent gross profit, ultimately misleading any investors. The workers at Golf Challenge Corporation are affected. Their jobs and livelihoods are at stake. In the financial statements released while using FIFO the company looks like they can pay their employees, but this may not be the case. Furthermore, the owner is directly affected. It is the owner’s company that is in stake, but beyond that it is the owner who directly sent the financial statements to the bank. The ethical issue in this case lies on his
Obviously, financial establishments can endure breathtaking misfortunes notwithstanding when their risk management is top notch. They are, all things considered, in the matter of going out on a limb. At the point when risk management fails, be that as it may, it is in one of the many fundamental ways, almost every one of them exemplified in the present emergency. In some cases, the issue lies with the information or measures that risk directors depend on. At times it identifies with how they recognize and impart the risks an organization is presented to. Financial risk management is difficult to get right in the best of times.
It is important for a company to control fraud risks in any departments whether it is internal fraud or stock fraud. It’s important to put controls in place to protect company reputation and assets.
In preparing this introduction to commercial bank accounting, we researched a number of sources, including an actual bank controller¡¦s manual. Our extensive research of this manual, a banking textbook, and a number of journal articles and websites uncovered many differences between the accounting methods for commercial banks versus those for other institutions. We have compiled our findings into two main sections. First, Section 1 discusses the financial statements of the commercial bank. We have analyzed each section of the balance sheet to discover where the differences lie between the bank and the traditional company. Then, we discuss the income statement in order to find out what transactions cause a bank to earn income or incur an expense. We also briefly touch on the other two financial statements, the statement of cash flows and the statement of stockholder¡¦s equity. Second, in Section 2, we discuss the regulatory agencies and reporting requirements that apply to accounting for commercial banks. We uncover the ...
Residual fraud risks could be included in the report. Because high cost and time consuming, some controls may be not using. Fraud risks can be addressed by accepting the risk of a fraud based on the perceived level of likelihood and significance, increasing the controls over the area to mitigate the risk, or designing internal audit procedures to address specific fraud risks. Management needs to implement the right level of controls based on the risk tolerance it has established for the
This report contains information that is calculated under accrual accounting principle. Because all transactions are recorded at the time when they are made rather than when actual money has been made or received, there is a likelihood that transactions are shown on one accounting period but actual change has not be made it, and it may deliver biased information about the company’s true financial position.
Owners and managers require financial statements to make important business decisions that affect its continued operations. Financial analysis is then performed on these statements to provide management with a more detailed understanding of the figures. These statements are also used as part of management's annual report to the stockholders.
Country's policies potentially affect a country’s vulnerability to debt-serving problems, particularly if the external economic environment becomes unfavorable.
( )( )( ) “A financial statement represents a formal report, showing records of financial activities of an entity at the end of an accounting period, in order to review the financial strength and performance of the entity. Where it summarizes the accounting process and reflects the financial effects of a business’s transactions, and the financial position of a business during a particular period of time. Furthermore it serves as the main method of communicating financial information about decisions that have been made by a business entity to inside and outside parties.” ( ) “People who might be interested in an entity’s financial statements need information on that entity for a variety of purposes. Lenders for example need information about the ability of the entity to pay back the loan on time and with interest, employees are a second example as they are interested in information on their employer’s stability and profitability. Potential investors need to know the risk inherited after investing in an entity thus they use financial statements to help them” ( ) “A financial statement is made up of
Saunders, A., & Cornett, M. M. (2011). Financial institutions management: A risk management approach (7th ed.). New York, NY: McGraw-Hill/Irwin.
The ability of the management to fulfill financial reporting roles depends on the design and effectiveness of the process as well as the security that is put in place over financial and accounting reporting. Without this controls, it will be difficult for businesses to prepare reliable and timely financial reports for lenders, investors, management and other users. While there is no guarantee that financial reports will miss errors, effective internal control systems over financial reporting are able to substantially minimize such inaccuracies or errors in financial statements of the company.
6. Members disclose to affected parties known or potential conflicts of interest or other circumstances which might influence - or appear to influence - judgement or impair the fairness or quality of their performance.