Intrinsic Motivation Essay Example for Free

Intrinsic Motivation Essay Second Language Acquisition (SLA) is learning development in which people acquire a new language – more commonly known as â€Å"second language† in addition to their native tongue. The second language is often referred as â€Å"target language† or â€Å"L2†. In addition, second language denotes any new language learned after early childhood years. This means subsequently languages learned – i. e. third or fourth language is still referred to as second language. A number of personal and environmental factors may affect the decision to learn a second language. Examples of such factors include family influences, social groups or peers, teachers, school, age, and self-concept. An individual may pursue a study on acquiring a second language skill for various reasons and motivations. In a study of UK and European students, it has been stated that the reasons a student pursues a study a foreign language are the following: 1) to be able to develop a career advantage for opportunities in the future; 2) a students personal inclination to learn the language; 3) to be able to learn and appreciate to cultural differences; 4) for an enhanced comprehension of the culture where the language is used; 5) and to be able to reside in nations where the language is used. The current teacher booklet aims to help the SLA teacher increase the intrinsic motivation of SLA learners by presenting sundry topics, including attitudes and motivation in second language learning; clarifying erroneous beliefs about language learning; what the SLA teacher ought to focus on: sources of language anxiety; the learning environment as source of language anxiety; variables of self-confidence; socio-psychological issues of language anxiety and self-confidence; instructor-learner interaction and classroom procedures; and interpretation of educator beliefs on language learning. Attitudes and Motivation in Second Language Learning In the book Attitudes and motivation in second language learning, Gardner and Lambert (1972) have identified Integrative Motivation and Instrumental Motivation as the common reason for a student’s desire to study a second language. In the context of language learning, a learner may pursue the study of English such as a second language because of one’s desire to work in abroad as well as for travel purposes. The learner’s practical rationale for acquiring a second language is referred to as instrumental motivation. On the other hand, a person may pursue the study of English language in order to successfully integrate within the community where one is currently living. The learner’s purpose can be referred to as integrative motivation. Following a learner’s utilitarian purpose, the clear benefit of acquiring English as second language is to have a competitive edge in the labor market. Such skills are very valuable as businesses are increasingly becoming global. In fact, professionals who are fluent bilingual speakers have the competitive edge compared to monolingual speakers. In addition, travel and migration of people has becoming a growing trend in recent years prompting a necessity to understand and integrate within the society which one lives in. Given that there a significant number of SLA learners, it is worthwhile to examine how the teacher may be able to increase the confidence and intrinsic motivation and lessen the anxiety of the SLA learner. Clarifying Erroneous Beliefs about Language Learning Horwitz, Horwitz Cope (1986) believe that the problem of anxiety and the accompanying erroneous beliefs about language learning, as discussed in their literature focusing on classroom anxiety, represent serious impediments to the development of second language fluency as well as to performance. In their discussion of clinical experience with anxiety as a barrier to second language development, they categorize this personality factor as that of apprehension, worry and even dread and anxious language learners often have difficulty concentrating, become forgetful, sweat, and have palpitations. Further, Chang, Horwitz, and Schallert (1999) report that there are generally two types or constructs of anxiety, which are related to second language learning in both speaking and writing. The report suggests that second language classroom anxiety refers to the anxiety felt by students in interacting with native-speaking students. It is the more general type of anxiety felt by most school students. On the other hand, second language writing anxiety refers to language-skill-specific anxiety felt by students. Chang, Horwitz, and Schallert (1999) suggest that these are two separate constructs and that anxiety levels in speaking or writing may be felt differently. Nevertheless, the report asserts that level of self-esteem is an important component for both constructs. In a research on English as Second Language, Huang (2004) reports that foreign students (i. e. Chinese) studying at North American universities have faired very well in TOEFL. While Chinese students have obtained very high marks, many still have difficulties in understanding academic lectures, taking notes, writing assignments and giving presentations. Further, this report would also illustrate that the two independent constructs reported by Chang, Horwitz, and Schallert (1999). Huang (2004) reports that the students in the study have proficiency in reading ability and grammar, and that listening and the speaking were the weakest. Moreover, the study also reports low level of confidence of foreign students in participation and interaction in classes due to this difficulty; thus, limiting their overall performance. Cummins (2000) supports that even though many have excellent English language skills in terms of social proficiency, many are still struggling with the type of cognitive academic language necessary for the success in the mainstream classroom. The Learner’s Willingness to Communicate Skehan (1989) further suggests that a learners willingness to communicate has also been related to anxiety. His research points toward some language learners attempting to avoid communicating in a second language due to fear of embarrassment over their current skill level in speaking the second language. Perhaps this is part of the reason why many second language learners, who study overseas, tend to remain connected to other foreign second language learners and avoid prolonged social contact with native-speaking peers. Though the reasoning behind each individuals level of willingness to communicate will likely vary based on the number of people present, the topic of conversation and the formality of the circumstances, avoiding discussion using the second language is a common anxiety among language learners. While many studies have shown the level of anxiety of second language learners increases because of erroneous personal beliefs of the students, most of studies assert that self-confidence is an important component in overcoming of both in classroom and writing anxieties. What the SLA Teacher Ought to Focus On: Sources of Language Anxiety Furthermore, Young (1991) provides a list of potential sources of language anxiety. In her review of the literature on language anxiety, Young asserts that language anxiety can have a variety of sources – that is, anxiety can be associated with the learner’s perceptions, teacher’s beliefs, as well as the instructional practice to second language learning. She argues that language can come from the following: a. personal and interpersonal anxieties, learner beliefs about language learning, instructor beliefs about language teaching, instructor-learner actions, and language testing. Personal perceptions and beliefs can have a great effect on the progress of language learning. These perceptions have been well-documented in the studies related to age and language learning. Hyltenstam (1992) asserts that age in relation to language learning is an important factor in achieving native-like fluency for second language learners. That is, younger students tend to learn the second language faster than their mature counterparts. On the other, self-perception of more mature learners tends to hinder in the development of second language skills, which can more appropriately termed as trait anxiety. For example, adults, who are pursuing study of a second language, may have a clear mission why they are pursuing such course and far more determination to persevere than their younger counterparts. However, a number of mature students, who enter a foreign language class, were victimized by various prejudices about second language learning. â€Å"I’m too old to learn† or â€Å"I’m linguistically challenged† are common erroneous beliefs that adult learners often succumb to. Ehrman et al (2003) suggest that the feelings of uneasiness, such as late start or a belief that one needs a special predisposition for learning learning, can be attributed to the barriers created by the student’s ego as one matures. Adult learners may perceive their performance in a foreign language classroom as unnatural or ridiculous in comparison to their experience in the first language acquisition process. Therefore, these factors often contribute to the apprehension and tension felt by adult learners in the context of second language learning, more specifically in the aspect of speaking, writing, and learning. In short, adult learners suffer language anxiety more as compared to their younger counterparts. Certainly, not all adult learners become paralyzed by negative emotions the moment they step into a foreign language classroom. However, it is a common perception of educators, who have lectured to a group of adults, that some non-native speaking students may be reluctant to participate, more especially when they realize or assume that other students are more fluent. Nonetheless, it is important to emphasize that this emotion is not alien to younger learners, but in the studies it have been well-documented that with age the tension and anxiety associated with learning a new language is stronger and more difficult to overcome. The Learning Environment as Source of Language Anxiety Furthermore, the learning environment can also be a source of language anxiety. MacIntyre and Gardner (1994) would denote this as situational anxiety. Hadfield (1992) has introduced the concept of classroom dynamics to describe everything that happens in and between the participants, both the teacher and the students. Heron further elaborates on the existential anxiety of students in a classroom setting. Moreover, Heron also lists three aspects of existential anxiety in relation to classroom dynamics: 1) acceptance anxiety, 2) orientation anxiety, and 3) performance anxiety. Acceptance anxiety would relate to apprehension of being judged in a foreign class. Often times, students as well as teachers may show approval and disapproval behaviors to others. Fellow students may show impatience or mock another as a sign of their approval or disapproval to their fellow students. This often manifest as a sign of competition for teacher’s approval among students in the classroom. Teachers may also exhibit judgmental attitude in their criticisms as well as their bodily movements to their students. The teachers may open criticize or mock a student in a class. A more subtle criticism can be observed when a teacher would correct an error of a student. Whether the teacher corrects the error explicitly, by providing the correction, or implicitly, by indicating the kind of error and giving the student the opportunity for self-correction, can make a difference in the student’s self-confidence. Orientation anxiety would relate to the personal understanding of the situational contexts of the discussion or what is going on. Teacher’s role in facilitating learning is undermined by the failure to manage classroom discourse. This leads for students to at times feel of being deprived of control. In a discussion, when turn stealing overrules turn taking, such feelings can occur. The student may feel the lack of control over his role in classroom interaction when he is late to answer a general question or the question is directed to another person. More often, students would find the teacher’s unclear or unsatisfactory explanation as frustrating and leaving a feeling of no control over the language as a system. Finally, the anxiety is further instilled with domineering and controlling teachers, who leaves students feeling they have no influence over what is going on in the classroom. Lastly, performance anxiety would relate to the apprehension or feeling of isolation in a class. The feeling of isolation may also express itself as a feeling of disregarded. The feeling of being alone among one’s peers is not uncommon in highly territorial classrooms in which students never want to change their seats or switch conversation partners. Moreover, this would relate to student’s anxiety to talk using the target language with fellow students in fear of being appearing stupid and judge as well. Hence, research reports would suggest that foreign students will tend to group with fellow non-native speakers and exhibit behavioral avoidance when studying in the mainstream English classes. Variables of Self-Confidence Self-confidence is a positive image yet realistic view of one-self and the situation. A confident person is someone who trust his own abilities, have a general sense of control in their lives, and believe that, within reason, they will be able to do what they wish, plan, and expect. According to Skehan (1989), available research does not show a single clearly-defined relationship between personality traits (such as self-confidence) and second language. He further points out that a major difficulty in investigating personality variables is that of identification and measurement, pointing toward a relatively new area of potential research needing attention. However, existing literature suggests that language anxiety can be correlated with students’ negative concepts of themselves as language learners, and negative expectations for language learning. With this in consideration, self-confidence levels can be viewed not only as a personality trait with complex factors affecting high or low confidence, but also as an outcome of high anxiety levels. This assumption is of considerable interest as anxiety tends to create negative self-perceptions about language performance and can then be tied directly to an increase in negative attitudes towards second language learning and a decrease in risk-taking and sociability. In different respect, overly high levels of confidence in language learning can have similar negative effects on language learning, hindering advancement in language proficiency as over-confidence, due to self-perceptions of high degrees of performance in oral/written communication or in positive socialization, can lead a language learner to believe that he or she has learned all there is to know about a language and lose sight of mastering higher complex linguistic skill in the SL. For example, an individual who sees that his or her skill level in the second language is superior to other SL learners who struggle with the SL, he or she might make substantial mistakes in grammar or comprehension, but remain completely unaware of their errors and thus not improve in the acquisition of the second language. Horwitz (1986) brings up an interesting concept regarding self-confidence by citing that language learning is a profoundly unsettling psychological proposition because it directly threatens an individuals self-concept and worldview. A bold statement, but it does indicate that language learning, as a whole, can be a major contributor to variable self-confidence levels based on how each individual interprets their learning in terms of culture, grammar, or any other related language learning aspect. Variable self-confidence levels in second language learners are profoundly impacted by a complex set of individualised variables that it would be difficult to label each and every possible contributor to self-confidence levels. Simply recognising self-confidence levels in SL learners as a result of language learning and of anxiety opens a variety of potential research methods to begin measuring cause and effect of variable self-confidence. Instructor-Learner Interaction and Classroom Procedures Young (1991) asserts that a learner’s beliefs about language learning can contribute to the psychological anxiety in students. Skills such as proper pronunciation, depth of vocabulary, and fluency may vary in importance for learners in relation to second language learning. Similarly, Horwitz also studied the effect of various learners’ perceptions to language learning. In fact, Horwitz reports that a number of foreign language students in his study may have unachievable personal goals and misconceptions about language learning. For example, a few respondents expressed their optimism in achieving native-like fluency in the second language in two years of study, while others expressed their belief that language learning is tantamount to learning how to translate. Clearly, these idealistic beliefs contribute to language anxiety, more evidently when their beliefs and reality clash. A very good example would be the overly optimistic goal of beginners to achieve native-like fluency in the target language in two years. Over time, the students would naturally tend to get frustrated to find the reality of their imperfect pronunciation even after a lot of practice. On the other hand, an instructor’s beliefs about language teaching can also be a source of anxiety among second language learners. The manifestations of instructor’s belief can more clearly be seen in the methodology or approach in which an instructor conducts the second language class. For example, most instructors, who employ the Grammar Translation Method to teach English, will undoubtedly argue that the most fundamental reason for learning the language is to give learners access to English literature, develop their minds through second language learning, and to build in students the kinds of grammar, reading, vocabulary, and translation skills requisite to pass any one of the variety of compulsory tests necessitated in educational institutions. These instructors often emphasize on the strict rules of grammar syntax and proper form in sentence construction. While the teacher believes that his role in class is to constantly test and correct student’s errors, some of the students might develop anxiety over their class performance. On the other hand, some instructors may choose to employ a different methodology in language teaching. Some instructors may choose to use Total Physical Response method for learners to enjoy the sessions and create a less stressful environment for the students. Practitioners argue that recreating the natural process for children first learning their native language will facilitate the learning of the second language in the same way. More importantly, it asserts that language learning method involves a substantial amount of listening and comprehension with a mixture of various physical response such as smiling, reaching, and grabbing. Thus, the aim was to lower the affective filter in order to accelerate language learning among students. Taking into account the beliefs of both learners and instructors as well as the sources of language anxieties felt by students in a classroom setting, it is also important to look into the dynamics of the learning environment. Hadfield (1992) has identified seven traits of a good classroom dynamics as shown in Table 1. Table 1: Traits of Good Classroom Dynamics 1. Student groups are cohesive and have a positive, supportive atmosphere. Group members are interested in each other and feel they have something in common. 2. The members of the group are able to compromise. They have a sense of direction as a group and are able to define their goals in group as well as individual terms. 3. Group members are not cliquey or territorial but interact happily with all members of the group. Members of the group listen to each other and take turns. 4. Individuals in the group are not competitive and do not seek individual attention at the expense of others. Members cooperate in completing tasks and are able to work together productively. 5. Group members are able to empathize with each other and understand each other’s points of view even if they do not share them. The members of the group trust each other. 6. The group has a sense of fun. 7. Group members have a positive attitude to themselves as learners, to the language and culture being studied, and to the learning experience. Interpretation of Educator Beliefs on Language Learning Many paradigms and principles in mentioned in existing literature in teacher cognition are generally by nature unobservable and researchers have defined such principles differently. Freeman defines the categories in teacher education as â€Å"knowledge, beliefs and perceptions that shape what the teachers know, and therefore what they do in their teaching. † The keywords in Freeman’s categorization would be knowledge, beliefs and perceptions. These keywords would therefore define the scope of the teacher’s competency in relation to language teaching. Ellis (2006) would further refine the three words to discuss the teacher’s biographical experience and how it contributes to their professional knowledge. Ellis (2006) proposes â€Å"knowledge, beliefs, and insights† as refinement of the Freeman’s categorization. Knowledge (cited after Woods by Ellis) would be related to facts and the â€Å"things we know†. Beliefs refers to the instructor’s â€Å"acceptance of a proposition †¦ for which there is an accepted disagreement. † Ellis further elaborates on this irony as â€Å"ESL students need explicit focus on grammar as well as communicative practice. † Lastly, insight would relate to the instructor’s â€Å"personal practical knowledge: knowledge which is experiential, embodied, and reconstructed out of the narratives of a teacher’s life†. Ellis (2006) further elaborates insight as â€Å"an understanding gained from personal experience that allows us to see how previously understood realities could be different. It illuminates something previously unseen, makes sense of something previously incomprehensible, or lends a new perspective on something taken for granted. † Conclusion Different language experiences will result to rich and diverse insights, which can be very useful to second language teachers. However, there is yet to be a methodical study of a knowledge database of the learning experiences of English second language teachers. Formal education would require and ensure teachers are equip with the knowledge about phonology, grammar syntax, bilingualism, and motivation and methodology, etc. In addition, beliefs about the theories within language learning are also formed in the process as teachers develop a technique or approach in second language teaching. More importantly, teachers gain insights from the personal experiences, particularly in teaching second language. These insights are gained from reflection and recognition the complex, interwoven, rich, and diverse nature of what teachers â€Å"know†. The contents of this teacher booklet all aim to give the SLA teacher some insight into the areas in which he exerts significant impact. If taken to heart, he will indeed be able to make a dent in language learning by lessening the anxiety of his students and increasing their self-confidence. References Chang, Y. S. , Horwitz, E. K. and Schallert, D. L. (1999). Language Anxiety: Differentiating Writing and Speaking Components. Language Learning, 49 (3), 417-446. Cummins, J. (2000). Immersion education for the millennium: What we have learned from 30 years of research on second language immersion. Retrieved on October 23, 2007 from www. iteachilearn. com/cummins/immersion2000. html Ehrman, M. E. , Leaver, B. L. Oxford, R. L. (2003). A brief overview of individual differences in second language learning. System, 31 (3), 313-330. Ellis, E. M. (2006). Language learning experience as a contributor to ESOL teacher cognition. Teaching English as Second Language or Foreign Language, 10 (1). Gardner, R. C. Lambert, W. E. (1972). Attitudes and motivation in second language learning. Rowley, Mass: Newbury House. Hadfield, J. (1992). Classroom dynamics. Oxford: Oxford University Press. Horwitz, E. K. (1986). Student effective reactions and the teaching and learning of foreign languages. College of Education: The University of Texas at Austin, Texas. Horwitz, E. K. , Horwitz, M. B. Cope, J. (1986). Foreign language classroom anxiety. The Modern Language Journal, 70 (2). Huang, J. (2004). Voices from Chinese students: Professor’s use of English affects academic listening. College Student Journal, 38(2), 212-223. Hyltenstam, K. (1992). Non-native features of near-native speakers: on the ultimate attainment of childhood L2 learners. In R. J. Harris (ed. ) Cognitive processing in bilinguals, 351 367. Amsterdam: North-Holland. MacIntyre, P. D. Gardner, D. (1994). How does anxiety affect second language learning? A reply to Sparks and Ganschow. The Modern Language Journal, 79 (1). Skehan, P. (1989). Individual differences in second-language learning. London: Edward Arnold Young, D. J. (1991). Creating a low-anxiety classroom environment: What does language anxiety research suggest? The Modern Language Journal, 75 (4).

The Existential Progression of King Lear Essay -- King Lear Essays

The Existential Progression of King Lear The human condition is the scrutiny of art, Prince Hamlet notes the purpose of art is to hold the mirror against nature. King Lear is a masterful inquiry into the human condition. King Lear is confronted with existence in its barest sense and is forced to adapt to that existence. His adaptation to the absurd provides an invaluable insight for all into the universal problem of existence. Lear is forced into an existential progression that will be traced with the phenomenon of consciousness; the result of this progression is seen ironically in that Lear finds satisfaction in despair. The point of departure of Lear into the unknown of existence is seen when he plunges himself into the harshness and relentlessness of nature. While immersed in the storm, Lear has been reduced to the bare essentials of man, he has lost those that he perceived as loving, and despite being accompanied by the Fool and Kent, Lear is more alone than he has ever been. The daughters he thought who loved him abandoned him and have taken his kingdom. The daughter who truly loved him was banished by his irrationality; Lear is alone. The presence of the Fool and Edgar should not necessarily be looked upon as that of a companion, but rather as catalyst for Lear’s progression. As for Kent, his presence is barely felt by Lear. Lear’s isolation is critical for his progression. Similar to Sartre’s Roquentin in Nausea, isolation and loneliness are the foundations for becoming existentially aware. â€Å"The tempest in my mind/ Doth from my senses take all feeling else†(III, iv 13-14)[1] Lear is completely alone in the universe, abandoned by love and cloistered from all outside emotion; he is now prepared to perceive the realit... ...a masterful work of art is that it conveys this universal truth, and at the same time conveys the sharp emotional anxiety that is concurrent with the universal truth. Lear constructs the universal human condition. Works Cited 1-William Shakespeare. King Lear edited by Russle Fraser.(New York: Penguin Putnam Inc., 1982). All future references will come from this text. 2-G. Wilson Knight. The Wheel of Fire. (London: Mehuen & Co., 1949), pg 193 3-Northrop Frye. On Shakespeare. (New Haven: Yale University Press, 1986), pg 113 4-Harold Bloom. Shakespeare: The Invention of the Human. (New York: Riverhead Books, 1998), pg 503 5-Bloom, pg. 503 6-Bloom, pg. 504 7-Bloom, pg. 505 8-Descartes. Meditations. Dr. Nighan's British Literature and AP page: http://stjohns-chs.org/english/Seventeenth/Sev-bk.html 9-Knight, pg. 196 10-Frye, pg. 119

Life Is a Continuous Journey Essay

Life is a continuous journey. Some journeys are short and some long. Some journeys are sweet and pleasant while some are sour. Some journeys are too memorable to be erased by the sands of time. I had one such experience. The memory of this journey continues to flicker, on and on, in my mind even after several years. We reached on 9th Dec., as our train reservation was for the following day by North- East Express. We reached the station early in the morning, the next day and boarded the train. The train started off at 6.00 a.m. I sat by the window and enjoyed the passing scenery. The sights of numerous rivers, bridges, countryside, evergreen paddy fields, lush green tea gardens, vast plains, etc. enchanted me a lot. In the late afternoon we reached Rajshahi station, which is the gateway to khulna. Some of us got out of the train to have a look at the station. The hustle and bustle of people moving about, the coming and going of trains and the enticing sights of the various stalls of t he station attracted our attention and we too moved about the platform enjoying these sights. We didn’t realise how quickly the time had passed. Suddenly we saw our train moving. We were at the far end of the platform and ran with all speed and might to catch the train. I was the last to notice the movement of the train and so the last to run. I too ran after my friends to catch the train. But the train was moving fast. Within moments my friends managed to get in. As I was about to reach the train, I slipped and fell on the platform. I saw my train speeding away before my sight. I shivered with fear. My friends were shouting at the top of their voice asking me to run faster. Just then a coolie lifted me and ran with me to the door, where my friends pulled me in. I just looked back and waved my hands at the good Samaritan, who had helped me-1 got only a glimpse of his face. But that face continues to remain afresh in my mind. The incident deeply scared me and I dared not to move an inch from my seat thereafter. It took some time for me to recover from the shock. The wonderful sights of New Delhi and Agra failed to bring back my lost enthusiasm and interest. I don’t even remember what I saw and how the rest of the excursion ended. The incident at the N.J. P Railway Station was too great to be forgotten by a few passing bliss. I can never forget this memorable journey. The reminiscences of this journey often flicker in my mind every now and then. Whenever this happens, I say a short prayer for the kind and unknown Samaritan, who helped me on that fateful day to get into the train. It was, by far, the most unforgettable journey of my life- a journey that has left its deep scars on the canvas of my life.

Repo Transactions Securities - Free Essay Example

Sample details Pages: 5 Words: 1410 Downloads: 1 Date added: 2017/06/26 Category Business Essay Type Narrative essay Did you like this example? Makeup Case ESM-17 Q. During the ESM congressional hearings, the auditors of ESMs major customers were questioned regarding the confirmation procedures they used for their clients transactions with ESM. What would be the key objective or objectives of an auditors confirmation procedures when a client has engaged in (a) repo transactions with a government securities broker and (b) reverse repo transactions with a government securities broker? What types of procedures would be used in auditing repo and reverse repo transactions? A. As an introduction, I would first like to define the term â€Å"repo transaction†. A repurchase agreement, or repo, can be described as a contract between a financial institution and an investor in which securities are sold and promised to be repurchased on a later specified date for a specified price. The transaction may be for either investing or financing depending on which side of the transaction is participated in. A rep urchase agreement is made when a financial institution (the seller-borrower) that sells the securities to an investor (the buyer-lender) and subsequently agrees to repurchase the securities back at the later specified date at the specified price. A reverse repurchase agreement is exactly the same thing, except from the opposite point of view. A reverse repo would from the buyers viewpoint instead of the sellers. In the preceding example, the investor would be considered to have made a reverse repo agreement, agreeing to purchase and subsequently sell the securities back at the later specified date at the specified price. Most repo agreements involve federal government securities such as Treasury bills and bonds, but may also be corporate or municipal obligations as well. Repo agreements are similar in arrangement to secured loans in that the buyer receives the securities as collateral to protect the buyer from default by the seller. The difference between the selling price and th e repurchase price represents the financial institutions interest for the use of investors capital. Although legal title passes from the seller to the buyer, coupon payments are paid directly to the seller even though the ownership of the securities rests with the buyer. Most repo agreements are between other depository institutions, brokers/dealers of securities, governments and retail customers. Maturities of repo agreements range from one day (overnight), short-term (up to 270 days), long-term (two years) or can be open-ended (no maturity date). The securities involved in the repo agreement can be physically delivered, placed with a third-party custodian, or retained (held) by the seller. When planning an audit of a client involved in repo agreements, the auditor should obtain reasonable assurance that focuses on balance-related audit objectives. When the client enters into a repo agreement, selling the securities and promising to repurchase them, at a later date this creat es a liability. The dominant balance-related audit objective in this case would be to check for completeness. Completeness involves checking that all of the amounts that should be included have in fact been included. The point here is to be sure that the client has recorded (included) all the appropriate amounts for the liability. The incentive for the client is to leave the liability off of the books. If the client enters into a reverse repo agreement, purchasing the securities and agreeing to resell them at a later date, an asset is created. The dominant balance-related audit objective in this case would be to check for existence. Existence involves checking to see if the amounts should actually be included. Key to this objective would be to be sure the client actually possesses the securities to be resold in their inventory. The incentive of the client is to create an asset that does not exist. An example of completeness and existence related to repo agreements is to obtain reaso nable assurance that the repos and reverse repos are properly identified, described, and disclosed; include all agreements; and are stated at appropriate amounts. Another example of existence is the securities purchased under reverse repos exist and are either on hand or are held in custody for the institution. Accuracy should also be considered by the auditor. Accuracy involves making sure that all included amounts are arithmetically correct. An example involving repo agreements would be to obtain reasonable assurance that interest expense or income and related balance sheet accounts are properly measured and recorded. Another example of accuracy would be the values at which the securities are reported are appropriate. Another balance-related audit objective that the auditor must consider is classification. Classification involves determining whether the accounts contain the correct items so that they can be appropriately presented and disclosed. An example related to repo ag reements would be to obtain reasonable assurance that repos accounted for as secured borrowings meet the criteria for secured borrowings, including the condition that the assets to be repurchased are the same as sold. Rights and obligations should be considered by the auditor. Rights involve making sure that the assets are legally owned before they can be included. Obligations deal with liabilities and must belong to the institution. An example related to repo agreements would be to obtain reasonable assurance that the institution has legal title or other rights to ownership for all recorded securities. In addition to balance-related audit objectives, the auditor should also consider presentation and disclosure-related audit objectives. Occurrence and rights and obligations involves whether disclosed events have occurred and are the rights and obligations of the institution. Whether all required disclosures have been included deals with completeness. Accuracy and valuation ref ers to whether the financial information is fairly presented and at appropriate amounts. Whether the financial statements and footnotes contain amounts that are appropriately classified, and whether the balance descriptions and related disclosures are understandable involves classification and understandability. Examples of these presentation and disclosure-related audit objectives are that repo agreements have been executed and are obligations of the institution, assets pledged as collateral for repo agreements are properly disclosed in the financial statements, recorded amounts include assets owned by the institution and the financial statements include all transactions for the period, and securities involved in repo agreements are properly described and related footnote disclosures are accurate. In determining the auditing procedures to be used in auditing repo agreements, the auditor should accumulate the appropriate audit evidence. The auditor should examine any repo agreeme nt documentation. Documents should be reviewed and the respective recording of the liability should be agreed to. The securities put up as collateral should be tested to determine if they are adequately identified and properly disclosed, and the descriptions and amounts match those in the subsidiary ledger. The auditor should seek confirmations regarding the amount and terms of all repo agreements with the respective securities dealers, investors, and institutions. The confirmations serve to provide evidence on their occurrence, terms, and the treatment of the securities, whether delivered to the buyer, held by a custodian, or retained by the seller. It should be noted that it is often impractical to determine the existence or location of securities that are delivered to the buyer. This does not indicate that the buyer will not be able to complete the transaction and should not concern the auditor. The auditor should however consider using addition procedures to assess the abilit y of the buyer to complete the transaction by reviewing the audited financial statements of the buyer, considering any regulatory requirements, and obtaining a report from the independent accountant of the buyer. The auditor should also review related party transactions. The review should review transactions recorded as sales transactions to determine potential unrecorded transactions. The review may find that a transaction involving a sale and a repurchase was in fact a repo and should be accounted for as financing. The auditor should be aware of transactions that are improperly recorded. The auditor should assess collateral risk. The reputation, financial condition and market presence of the buyer should be considered. The current market value of the collateral should be reviewed to determine if the collateral is sufficient in relation to the agreement. The auditor should also assess whether the repo agreement fits the criteria for a financing or sales transaction. The au ditor should also test fair value disclosures. Quoted market prices or prevailing interest rates of the same or similar securities should be considered to evaluate if the estimates are reasonable. Some additional procedures an auditor could use are a review of the board of directors minutes, testing whether approved securities dealers were used, and recomputation of gains or losses on reverse repo agreements. Don’t waste time! Our writers will create an original "Repo Transactions Securities" essay for you Create order