To see how well a company is doing with managing their long term assets you just need to know where to look. Some places you can find this is in the reported total assets, net income, and cash flows that are related to the investing activities of a business. An idea of how a company is utilizing long term assets can be found in their financial statements. A company that is particular good at this just happens to be one of the largest food companies and goes by the name of H.J Heinz <www.heinz.com> or that famous ketchup company. It has close to 66 percent of its total assets are classified as long term assets. The income statement comes in handy because it displays depreciation of assets over time, and Heinz has had about 299 million dollars worth of depreciated expenses. Long term assets are constantly looked at to see if some of the assets have loss some of its value which will result in what is known as asset impairment. Getting rid of long term assets could show an increase or decrease on the income statement, it just depends on the situation. So, long term assets are classified as assets that have a relatively long life, usually of at least one year. Second, they are used for the operation of a business, and third, they are not usually resold. In the pass years long term assets were usually referred as fixed assets, but this statement is not correct today because fixed usually apply to something that lasts forever. There is no really set in stone rule to classify a long term asset, but they are usually thought of to last for at least one year with repetitive use. Assets that are not normally used in the everyday operations of a business should not be included in this category, and assets that are available for resale should be called inventory. Also, assets are different from current assets because they are expected to aid a business for longer periods of time, and are used in the day to day operating cycle of an entity. A very important part of long term assets are its carrying value, or the part of the price of an asset that hasn’t expired yet. It is also known as the book value of an asset. If a long term asset just happens to lose part or all of its money producing potential before the end of its self life than the carrying value is reduced. Asset impairment occurs when the cash flow of the asset ends up being less then the carrying value. When the carrying value is reduced then it is counted as a loss. Long term assets can be further broken down into three distinct items. They are tangible assets, natural resources, and intangible assets. A tangible asset is a type of long term asset that is physical like land, buildings, and equipment. Natural resources are a type of long term assets that is exchanged for economic value and can be obtained from the land, like gas, gold, and ore. Last a intangible asset is an type of long term asset that doesn’t have any physical worth but have a value based on the rights that is granted to the owner. An example of this is copyright, patent, and trademarks. The way that tangible assets loses value is through depreciation, the way that natural resources lose value is through depletion, and the way that intangible assets loses value is through amortization. Picking long term assets are a very concrete and intricate process. Before choosing a long term asset the management must decide how they will finance an asset one they have it. Companies that generate enough profit can pay for long term assets from the cash flow of their day to day operations. It’s very similar to how an individual pays for the loan of a car or the loan on mortgage. When companies want issue a long term acquisition then they must do this through capital stock, bonds, or long term notes. A nice place to analyze a company’s long term financing is through the financing activities in the statement of cash flow. When you’re dealing with long term assets you must make sure that you’re using the matching rule appropriately. The first thing you should do is find the total expense in the current accounting period. Second, you should see how much money is retained from the on the balance sheet to see if the asset will be beneficial in the future. To solve these dilemmas there should be four important questions that you ask yourself. First, how is the value of the long term asset determined? Second, how much the depreciated value of the long term asset should be allocated against the revenues in the long run. Third, how much money on expenditures such as repairs is use? Last, how would the disposal of the long term asset is recorded in the financial records? Because long term assets are very confusing, they have many alternatives to manage them. It’s best to think of long term assets as something that will provide a particular need or operation over the years. For example, you shouldn’t think of a truck on how long it will run, but on how many miles it will drive. Another example is how much paper a photocopier machine will copy, and how many people a hotel will shelter. It’s also important to determine if a business will have the money to finance the asset in the future. Expenditure is known as the payment or a promise to make a payment in the future for an asset such as for a payment of a service or for a new laser printer you purchased for your business. There are two types of expenditures, and they are capital expenditures and revenue expenditures. A capital expenditure refers to the expenditure of a long term asset like land for example. Revenue expenditure refers to the expenditure for something related to repair or maintenance such as the repair of a bull dozer for a construction company.
Saturday, August 15, 2015
People always fluctuate in their behavior from day to day and we all have had our times in which we acted rude to people, and had the pleasure of having the reverse happen as well. Kay Redfield Jamison an international guru of about mood disorders has had her share of mood swings during her times. For years she kept this extreme psychological disorder a secret in which she had moods that switched from being super excited known as mania, to times that she was lethargic and depressed. She actually wrote a book about these events and tells about it in more detail. By the way, the disorder was known as bipolar disorder and effects many people around the world. With determination, a strong will, and support from her family and friends she overcame her struggles and continue to teach about psychological disorders to this day. I know that you’re probably wondering what are the types of characteristics of deviant or abnormal behavior? Well, one way abnormal behavior can be diagnosed is with some common symptoms. It may surprise you that there are about 40 million Americans that are affected by some type of psychological disorder. You may think of a psychological disorder as what the main character had in the movie “A beautiful Mind.” In essence you are right but there are a lot more other characteristics involved and a psychological disorder can also be defined by having an addiction to a substance like alcohol or drugs. To fully understand psychological disorders an individual must analyze abnormal behavior. Let’s take a look at three different case studies.
§ A twenty six year old woman named Helena has a need to walk in a specific way. When she is walking on the street in the public she believes that if she steps on certain cracks she will have bad luck, but in order to reverse that bad luck she has to turn around and walk back a block. She doesn’t like to do this much so she often stay home and pay people to go and pick up her groceries and other needed items.
§ A thirty five year old woman has recently got a divorce from her husband who she has been previously married to for eleven years and has two children with. Her husband have left her for her best friend and she is going back to college to continue her education so she can earn some more money to better support her children. She has a hard time struggling with school work and has grown separate from her friends and colleagues. A lot of the time she doesn’t feel like doing much and tends to cry a lot at nigh time. She also has a more pessimistic view in life and doesn’t believe in true love anymore.
§ A thirty year old man named Don has to have things arrange in his house a certain way. Even though he is wealthy enough to afford a maid he constantly has to rearrange things in his house after she leaves. He sweeps the floor and wipes off tables even though she has done that before.
Most people would say that the behavior of all of these individuals are abnormal, but are all of them bizarre? That’s a common myth about behavior, because people will automatically assume that abnormal behavior is bizarre and it’s not necessary true. Take the women in the second case study described even though her behavior is abnormal it is not necessary bizarre. A lot of times people with abnormal behavior cannot easily be distinguished from people with normal behavior. Also, just because a person currently has a mental disorder doesn’t mean that they will always have it. The term abnormal behavior varies from different academic mediums. However, the federal courts define insanity which is more of a legal term rather than a psychological on as the inability to differentiae right from wrong. This is a very common term that comes up in terms. One infamous example is in 1996 when multimillionaire John Dupont shot and killed Olympic Gold medalist wrestler David Schultz. He also has been charged with a couple of assaults earlier. Dupont lawyers used the “insanity” definition as a lame excuse to get him off the hook and it worked because in the end because the jury declared that he had a psychological disorder and he was found guilty of third degree murder. There are three criteria’s for crossing the line between abnormal behavior and normal behavior. Abnormal behavior is usually deviant which means it abstracts from the norms of society. However, remarkable people like Martin Luther King and Bill Gates are not the average person but they are far from being abnormal. When a behavior deviate from what is expected by society than it could be called abnormal. The second criteria are that it is usually maladaptive which means that it interferes with a person’s ability to function properly in the real world. Last, abnormal behavior includes personal distress. This means that the person is deeply bothered by this and it causes them unnecessary pain and suffering. The causes for abnormal behavior can vary tremendously. We can look at several factors such as biological, psychological, and sociocultural factors to help determine this. Psychologists who favor the biological approach tend to emphasize the brain and genetic traits as the primarily cause of abnormal behavior. When using this approach the primarily form of treatment is drugs or drug therapy. The biological approach is used often in the medical model, which describes psychological disorders as diseases related to biological origins. From the medical view abnormalities are seen a mental illness. The people that are infected with the mental illness are known as patients and they have to be treated by doctors. The biological view can also be broken done into three more categories. These are known as structural views, biochemical views and genetic views. The structural view thinks that abnormalities in the brain structure are the main lead to mental disorders. The biochemical view looks at the imbalances in the brain’s chemical structure such as neurotransmitters and hormones as the cause to mental disorders. In the genetic view they look at distorted genes as the main contributor to mental disorders. While the biological approach focuses on inherited traits to be the main contributor to mental disorders, the psychological approach looks at the environment and the unconscious mind as the main contributor to abnormalities. This has three parts to it which includes the psychodynamic perspective, behavioral and social cognitive prospective, and the humanistic perspective. The psychodynamic perspective thinks that psychological disorders come from unconscious conflicts that can cause anxiety and a maladaptive behavior. The main contributor to deviant behavior in this approach is from early bad relationships. If an individual develops bad relationships with either offspring early on in their life than the individual will develop abnormalities. Sigmund Freud was the developer of the psychoanalytic approach in which it places more emphasis on what you can’t physically see. In the behavioral and social cognitive prospective they place an emphasis on the environment in shaping abnormal behavior. They believe that people learn behavior by observing those around them, through self control, through their beliefs in themselves, and through a variety of other cognitive factors which are the key to psychological disorders in this approach. In the humanistic perspective they place an emphasis on an individual’s freedom to do what they want and chose their own destiny and personal characteristics. They believe that psychological disorders come up when an individual fails to meet their own potential. All of the psychological perspective focuses on the individual. The next approach is the sociocultural approach. This concept places a larger emphasis on the area in which an individual lives such as their family, neighborhood, economic status, and culture. For one example, they believe that a conflict between one’s cultures will be a contributor to a mental disorder in an individual. It’s not necessary the individual that has a mental disorder but rather to an unbalanced social life. There are also some gender effects in determining mental disorders. Women are more likely to have internal mental disorders, which are disorders that affect them inside. They are more likely to be effected with anxiety attacks, and moods of depression. On the other hand, men are more likely to be effected with external disorders or disorders that are seen outward. Some examples of these disorders are substance abuse and moods of aggression. Many psychologists now believe that psychological disorders are universal which means that they are the same for people everywhere around the world regardless of geographic location or their social status. However, depending on the factors I just mentioned they do vary. There are also some disorders that strictly effect people of one culture, and here are three big ones that I’m currently aware of: Amok, Windigo, and Anorexia Nervosa. The Amok effect people of Malaysia and the Philippines and in this disorder and individual suddenly has a fierce burst of rage and anger and kill and injure as many people as possible before they are killed. This disorder is commonly found in males and the cause of this can be numerous of factors such as jealously, or losing a lot of money through gambling. Windigo is a disorder commonly found in Algonquin Indian hunters and is very similar to a horror story in which an individual is hunted and chased by a fictionist character and become bewitched such as by a bit of a vampire or werewolf. The hunter becomes worried that they will turn into a flesh eating cannibal and harm other around them. The last disorder, I think that many Americans is aware of the last disorder and that is called anorexia nervosa and effects people of mainly Western cultures with a special emphasis on the people in the United States. This is an eating disorder in which an individual tries to maintain an unhealthy low weight through starvation which can ultimately lead to death.
Sociologist Herbert Mead developed a theory known as social behaviorism, which helped explained why past social experiences help form an individuals’ personality. Mead did not believe that personality was developed by drives or biologically, but more on terms socially. He stated that the self only developed when people interact with one another. Without the interaction of other people an individual can’t develop a personality. An example of this is if a child is left in total isolation for a long period of time then they don’t mature both physically or mentally. Next, social experience is crucial, and this includes the exchange of symbols. Only people attach meanings to words and symbols. If you tell a dog to sit and it obeys then you may give it a snack. However, this doesn’t mean it knows why to sit down, but it does so to get food. You can tell a dog to sit for numerous of reasons such as wanting to impress your friends, or to calm it down because it is running all over the place. Also, Mead noted that understanding individual intentions is critical. This will help us to analyze how an individual will respond even before we act. For example, when we’re driving we all anticipate what others may do because of experience. If an individual behinds you is speeding up rather quickly, then you can assume that they are about to switch lanes, or you can assume that they are in a rush and need to get somewhere quickly. Mead refers to this as taking another individual’s role. Another important theory that is related to social behaviorism is the looking-glass self. This is basically like mirroring what we think others think of us. If we think others view you as being “good looking,” then you will see yourself as being good looking, or if you think people think that you are fat then you will have that image of yourself. People take the roles of other people during development. Infants have very little knowledge so they tend to mimic others. Children often have creative minds and take on roles of other significant others or people such as parents that have a special importance in their social development. For example, children will play house in which someone will take the role of a mother while another take that of a father. As they age children will learn to take various roles and adjust to their surroundings. As we continue to age we will continue to see changes in our social life. There are a lot of critics of Mead’s theories and some claim that he focus too much on the society in developing an individual’s behavior. Another sociologist Erik H. Erikson stated that unlike Freud who believed that personality was pretty much set in stone in the first couple of years of an individual’s life, that personality changes in stages and occurs all the way up to death. His theory is not all that accurate as well, because people experience changes in different orders and time. Through all of the disagreements, sociologists generally agree on this main idea, and that is that the family has the greatest impact on an individual’s socialization abilities. When an individual is an infant they have no control and usually rely on their parents and family members to help nurture them. Through family they learn several of communication techniques such as trust, culture, and beliefs. Don’t get me wrong, not all learning comes solely from family; they can come from the environment as well because in a lot of cultures they use the environment to help raise a child. I guess the saying is true in which it takes a “village to raise a child.” It may not be surprising to you that different social classes tend to raise their children differently. An interesting survey that happened in the United States compared what a lower class family would want in a child compared to that of an upper class family. A lower class family would usually favor obedience and conformity while an upper class family would tend to favor creativity and good judgment (NORS, 2003). Have you ever wondered why? Well the reason is lower class workers tend to have jobs that they must be very obedient in and are highly supervised. Subconsciously they are gearing their children towards that route and will even use physical punishment to achieve it. In upper class workers they tend to have jobs that inspire individuality and creativity which is very similar to the traits they would like to have in their children. School also has a large effect on an individual’s personalities. If you think about it you spend a huge chunk of time each day at school. It’s also interesting to note that children tend to play with people as the same race and gender, and that boys are more physical and aggressive while girls are more well behaved. Boys also tend to find abstract activities more interesting like video games and girls tend to be more artistic. The same thing follows when they get to college because boys tend to major in physical sciences, and computing while girls usually major in humanities and arts. In school is where children discover peer groups or individual that has similar interest as themselves. People tend o indemnify more with their peer groups and can have conversations about things they understand like clothes, music, and style. Peer groups are a way for individuals to escape adult supervision, and people are usually more out spoken in peer groups. During the adolescent years people tend to identify more with their peer groups because they identify themselves as an adult and that is also a time in which parents are concerned about who their children hang around because they know that who they hang around influence their behavior deeply. During these years the mass media heavily affects individuals as well. Studies have showed that television have made people more passive and lessoned their creativity. In the United States we spend he most time watching television and own the most T.V sets per household.
A company’s financial position indicates the amount of resources that they have, and also the claims against those precious resources at any time. Claims can also be referred as equities. So, a company can be known as a combination of economic resources and equities. Economic Resource=Equities. No mater what type of business your in, every type of company has two different types of equities. They are creditor’s equity and owner’s equity. In another way Economic Resources= Creditors Equities +Owners Equity. When using accounting language, the economic resources a company has at a particular time is called their assets? On the other hand the amount of creditor’s equity a company has is known as their liabilities. So here is the standard equation of accounting or better known as the accounting equation: Assets=Liabilities + Owner’s Equity. Similar to an algebraic equation, both sides of the equation has to be equal. This equation comes in handy when analyzing the financial effects of your everyday business activities. Let’s talk about a very important concept of any business. Assets are known as the economic resources that a business has that are expected to generate money for them in the future. Some examples are real estate and any other property that a business own so that they can rent out to people. If a business is owed money than it goes into what is known as accounts receivable which are monetary items. However, there are some assets that are not physical. Some examples are copyrights, trademarks, and patents, but they are still extremely valuable to a business. Next, liabilities are the obligations that a business has such as paying cash, provide future services to individuals, or transferring assets to another entity. These are known as the debt of a business or the money that they have to owe in the near future. All of these are recorded in the accounts payable. As I’m sure you know, having a lot of debt is not fun and liabilities/debt are claims that are seen by the law. The law gives creditor (People that money is owed to) the right to push the sale of a company’s assets if they don’t pay their debt on time. Creditors have a ton of rights over owners and they have to be paid in full even before the owners receive anything. It is very possible for a debt to consume up all a company’s resources. Next, owner’s equity refers to the claim that owners of a business make in regards to the assets they have. It is the residual interest or the remaining assets of a company after deducting the amount of entity liabilities. Here is the equation for owner’s equity. Owner equity=Assets-Liabilities. The owner’s equity within a particular corporation is referred as stockholders equity, so the equation then looks like this. Assets=Liabilities +Stockholder’s Equity. The stockholders equity has two distinct parts which are the contributed capital and retained earnings. Stockholder’s Equity=Contributed Capital + Retained Earnings. The amount than an individual stockholder puts into a business is known as the contributed capital. Contributed capital is usually divided into two separate parts known as par value and “par value” and “additional paid in capital.” The retained earnings are the amount of equity that is earned by stockholders from the income generating activities of a business that are kept for future uses by a business. Retained earnings are affected by three types of transactions which are revenues, expenses, and dividends. The increase and decrease in a stock are known as revenues and expenses respectively and these come from operating a business whether online or offline. If you’re online than an operating expense that you will have if you have your own website is your domain name and hosting service. Another example is if a customer agrees to pay you in the near future for a service that the company will perform. The money is recorded in the accounts receivable (asset account) which increase the asset value but decrease the stock holder’s equity amount which is an example of revenue. However, if a company promises to provide a service in the future than this is known as an expense. When this happens the assets decrease (accounts receivable) and the liabilities (accounts payable) is increased, which makes pretty good sense right? When the revenues exceed the expenses this is known as the net income which is good, and on the other hand when expenses are greater than revenues than this is known as net loss which means that you’re losing business or your business costs more to operate than what you make. Dividends are the distribution of assets to stockholders which refer to the past earnings. Do not confuse expenses with dividends, because they both are reducing the retained earnings amount. Retained earnings are the collected net income or revenues minus expenses. The financial statements are the main way for communicating information about a business to those who have some type of interest in it. What helps me is to think of these statements as a type of model for business because they show how a business is doing in financial terms. However, like a variety of methods and models, financial statements are not perfect and have their flaws. There are four main financial statements, and they are income statement, the statement of retained earnings, the balance sheet, and the statement of cash flows. What the income statement does is summarize the revenues earned or the money made, and the expenses or the money that is deducted from a business. Many accountants consider it the most important financial report because it makes it clear whether a business has met its profitability goal. The next one is the statement of retained earnings, and it displays the retained earnings over a period of time. The time that the retained earnings will be zero is when a company first started out in their accounting period. A lot of companies use the statement of stockholder equity as a substitute of retained earnings. This is a more detailed statement because it displays not only the aspects of retained earnings but it also shows the changes in the stockholders equity accounts. Next, the financial situation of a business on a particular date, usually on the end of the month or the year is the balance sheet. The balance sheet displays the value of a business according to their assets and the claims against those assets which are the liabilities and the stockholders equity. Last, the statement of cash flows is geared towards a company’s liquidity measures. They are basically the flow and outflow of cash in a company. The net cash flow is the subtraction between the inflow and outflow of money. The statement of cash flows also display the money generated by simply operating a business, and it also displays the investing and financing transactions that occurs during a particular accounting period.
To make sure that financial statements are easy to understand, there is a set of rules and practices that is established, which is known as the generally accepted accounting principles (GAAP). This has been developed to provide a basic guideline for the rules of accounting because I think it’s fair to say that it can get confusing at times. There are a lot of variations to the meaning so here is the best answer. It’s the generally accepted accounting rules and procedures that are necessary to define accounting practice. Basically it’s a set of theories that accountants come to accept, and there are always controversies with some methods between accountants like any other field of study. Accounting is a discipline that is always growing and changing so it’s a good idea to keep up to date with all of the trends that are going on. Since the management prepares the financial statements of a company it is possible that a financial statement can be altered to give a company a particular boost. So, that’s why the companies that sell their ownership to the public needs to get their financial statements audited by a public certified accountant. A certified public accountant (CPA) are licensed through the sate for the same exact reason lawyers and doctors are, so they and protect the public by providing the highest quality of professional service possible. The reason why CPAs are used is because they have no connection with the company and are independent. They have zero financing ties with the company. Some firms that employ a lot of certified public accountants include Deloitte & Touch http://www.deloitte.com. An accountant with no strings attached or is independent commonly performs an audit, which is evaluating a companies financial statements, product, accounting systems, and records. The main purpose of an audit is to make sure that the financial statements have been properly prepared according to the excepted accounting rules. Keep in mind; since accounting is not a precise science it has room for interpretation according to the GAPP. However, that doesn’t mean that the accountants report should contain substantial errors in the financial report, but more like that for the most report it is reliable for creditors to take a look at. An accountant can make a decision only when the financial statements conform to the guidelines of GAAP. In the past creditors, banks, and investors tend to favor an auditor when they are deciding to invest in a company or give loans, because of their independence. The individualistic audit is an extremely crucial factor in the growth of financial markets internationally. Also, many organizations can directly or indirectly influence a GAAP. The Financial Accounting Standards Board (FASB) http://www.fasb.org/ is the most critical body for the development and issuing of rules on accounting practice. The website I previously listed is extremely critical and you can attend seminars online for no cost, and also stay up to date with the rules. This independent body issues the Statements of Financial Accounting Standards. It’s the largest CPA organization that exists in America and heavily influence accounting practices through its senior committees. The Securities and Exchange Commission is the agency of the federal government that legally has the power to set and execute accounting practices for companies that sell security to the public, and it has a large impact on accounting practice. Next, the governmental accounting standard (GASB) http://www.gasb.org/ is critical for accounting because its main job is to issue the standards for accounting to the local and state governments in the United States. However, a lot of these organizations are focused on the rules in regulations in the United States. There are a lot of businesses and accountants internationally so that’s why the International Accounting Standard Board http://www.iasb.org/ (IASB) was formed. It was approved by more then 25 international agencies. The U.S laws that analyze the revenues for the cost of operating a business can also affect accounting practice. It’s no question that the major provider for income for the government comes from income tax. The income tax rules are heavily applies by the Internal Revenue Service (IRS) http://www.irs.gov/. Sometimes these rules actually cause a conflict with the accepted rules of accounting. A lot of businesses use accounting practices because it’s a requirement by tax law. Also, companies can use the rules of tax law to their advantage financially. Accounting also has laws of conduct for profession, and one extremely important one is ethics.
§ A nice website dealing with the issues of ethics is http://www.ethics.org/.
It touches bases on questions that help determine if something is either right or wrong, and is based on moral decisions. Most people are faced with several ethical issues each day and, and some ethical activities could be on the range of illegal. If a business decides to use false or misleading advertising, or to bribe customers into giving them testimonials for a specific product, then they could be acting in an unethical manner. The ethics of a company could also be a result of the employees so that’s why it’s always a good idea to run a background check of who you are hiring, whether it’s online or offline. Professional ethics is the guidelines that apply to the conduct of individuals of a certain profession. Similar to the ethical actions of a company, the ethical actions of an individual is a decision. As being a member of an organization, accountants have to take the responsibility not only to their customers and employers, but also to the general public to act in the greatest ethical way possible. Accountants are very good at following professional ethics because they are the second professional group as having the largest ethical standards, with clergy being the highest, no surprises about that one. It is important for individuals who decide to become an accountant to have the highest levels of professionalism as possible. To enforce that its prestigious members are following the rules, the AICPA along with each state have adopted some codes of professional conduct that certified public accountants have to follow. Some simple rules are being responsible to the people that depend on the trust of accountants, such as creditors and investors. When working with people the accountant must act with integrity which means that they are honest, and the individuals gain from the visit with the accountant. The accountant must display objectivity which means that they are intellectually honest, and they must remain independent which means that they must avoid any relationship with the business or individual because it will damage the accountant’s principles.
It’s important to take the precautions to protect you and your products from information theft these days, because it’s getting easier and easier for people to share digital products. Information theft is a type of computer security risk and it’s defined as stealing an individual’s personal or confidential information. When this is stolen this can cause as much damage, or possibly more then hardware or software theft. Business or home users are both at risk of information theft. One example is a malicious individual stealing credit cards so they can make unauthorized purchases on another person’s account. If information is transmitted over a network then it has a very high chance for malicious users to intercept the information. Every computer in the path of your data can see what you send, and they can also see what you send. A lot of companies try to stop information from being stolen by applying some user identification and authentication controls. These constraints are best for protecting computers along a company’s premise. However, to protect information on the Internet and on networks, companies use a handful of encryption methods. Encryption refers to the process of converting data into an unreadable form. One type of encryption software is Obfuscated code which is a programming language that is extremely hard to read. Encrypted data is like any other data because you can send it through a lot of options, but to read it you must decrypt or decipher it into a more readable form. Throughout the encryption process, the unencrypted data or input is known as plaintext and the encrypted data, or output is known as ciphertext. To encrypt information, the programmer converts the plaintext into
ciphertext using some type of encryption key. An encryption key is the programmed formula that the person who receives the data uses to decrypt the ciphertext. There are a variety of encryption or algorithm methods. However, with an encryption key formula, you will be using more then one of these techniques. Some business use available software, while others develop their own. When an individual send information online such as through an email for example, they will never know who might intercept it, or to whom it could possibly be forwarded to. That’s why it’s not such a good idea to send confidential information online. However, an individual can help protect themselves by encrypting the information, or signing it digitally. Some very popular email encryption software is known as Pretty Good Piracy (PGP) and Centurion Soft Secure Protection. Pretty Good Piracy is known as freeware, which means that individuals can use it for their personal needs but not for commercial purposes. You can download this for no cost. A digital signature is a type of encrypted code that a individual, website, or company pastes to an electronic document to make sure that the individual is who they claim to be. The code will most likely consist of the user name and a hash of usually part of the message. A hash is a type of mathematical formula that generates content from a specific message, so it is different from a message. The recipient will have to generate a new hash from the received message and compares it from the one with the digital signature to make sure that they match appropriately. The main purpose behind using digital signatures is to make sure that it’s not a deceiver participating in the transaction. So, digital signatures help narrow down e-mail scams. A digital signature can also make sure that contents of a message have not been changed. A lot of web browsers use encryption that is regarded as 40 bit encryption, and this is a very low level. A variety of browsers also offer 128 bit encryption which has a higher level of protection because the encryption key is longer. Some important places that require extremely hire security like banks, and online retailers needs at least 128-bit encryption. A website that successfully uses encryption methods to secure information is known as a secure site. A secure site uses digital certificate with security protocol. The two most popular security protocols are secure sockets layer, and secure HTTP. A digital certificate is a notice that verifies that a user or a website is for real or not a scam. A lot of ecommerce websites will usually have digital certificates. A certificate authority (CA) is an authorized company or individual for that matter that has the ability to issue and verify digital certificates. There are several of websites that offer a digital certificate. Some popular ones are Verisign http://www.verisign.com/, Godaddy www.godaddy.com, Digicert http://www.digicert.com/, and Thawte http://www.thawte.com/.The digital certificate will usually contain information such as the username and the serial number of the certificate. By the way, the information in the digital certificate is also encrypted. Next, the Secure Sockets Layer (SSL) provides encryption of every detail that passes between a server and a client. SSL also requires the client to have a digital certificate, so the web browser can communicate securely with the client. The web pages that use SSL will usually begin with https as opposed to http. SSL is available in 40 and 128-bit encryption. Secured HTTP (S-HTTP) allows individuals to choose encryption for data that pass through a client and a server. When using S-HTTP, the client and the server must have a digital certificate. This makes S-HTTP more difficult to use then SSL, but on the other hand, it is more secured. Companies that have to use verify a client such as online banking companies use S-HTTP. Also, mobile users can also access computer networks through a virtual private network. When mobile users successfully logon to a main office using some type of standard Internet connection, a virtual private network (VPN) allows the mobile user to secure the connection. VPNs encrypt data as it passes from a notebook computer or any other mobile device so it won’t be intercepted. Regardless of your security method, I will highly recommend using the most powerfulness safeguard which is a backup. It prevents data loss from several of sources such as system failure for one. A backup is simply a backup of a file, program, or desk that can be used in place of the original if its loss, destroyed, or corrupted. If the files are destroyed, then you can replace them by restoring it, which copies the backed up files into their original position in the computer.
Today, many people rely on computers to do homework, work, and create or store useful information. Therefore, it is important for the information on the computer to be stored and kept properly. It is also extremely important for people on computers to protect their computer from data loss, misuse, and abuse. For example, it is crucial for businesses to keep information they have secure so that hackers can’t access the information. Home users also need to take means to make sure that their credit card numbers are secure when they are participating in online transactions. A computer security risk is any action that could cause lost of information, software, data, processing incompatibilities, or cause damage to computer hardware, a lot of these are planned to do damage. An intentional breach in computer security is known as a computer crime which is slightly different from a cypercrime. A cybercrime is known as illegal acts based on the internet and is one of the FBI’s top priorities. There are several distinct categories for people that cause cybercrimes, and they are refereed as hacker, cracker, cyberterrorist, cyberextortionist, unethical employee, script kiddie and corporate spy. The term hacker was actually known as a good word but now it has a very negative view. A hacker is defined as someone who accesses a computer or computer network unlawfully. They often claim that they do this to find leaks in the security of a network. The term cracker has never been associated with something positive this refers to someone how intentionally access a computer or computer network for evil reasons. It’s basically an evil hacker. They access it with the intent of destroying, or stealing information. Both crackers and hackers are very advanced with network skills. A cyberterrorist is someone who uses a computer network or the internet to destroy computers for political reasons. It’s just like a regular terrorist attack because it requires highly skilled individuals, millions of dollars to implement, and years of planning. The term cyperextortionist is someone who uses emails as an offensive force. They would usually send a company a very threatening email stating that they will release some confidential information, exploit a security leak, or launch an attack that will harm a company’s network. They will request a paid amount to not proceed sort of like black mailing in a since. An unethical employee is an employee that illegally accesses their company’s network for numerous reasons. One could be the money they can get from selling top secret information, or some may be bitter and want revenge. A script kiddie is someone who is like a cracker because they may have the intentions of doing harm, but they usually lack the technical skills. They are usually silly teenagers that use prewritten hacking and cracking programs. A corporate spy has extremely high computer and network skills and is hired to break into a specific computer or computer network to steal or delete data and information. Shady companies hire these type people in a practice known as corporate espionage. They do this to gain an advantage over their competition an illegal practice. Business and home users must do their best to protect or safeguard their computers from security risks. The next part of this article will give some pointers to help protect your computer. However, one must remember that there is no one hundred percent guarantee way to protect your computer so becoming more knowledgeable about them is a must during these days. When you transfer information over a network it has a high security risk compared to information transmitted in a business network because the administrators usually take some extreme measures to help protect against security risks. Over the internet there is no powerful administrator which makes the risk a lot higher. If your not sure if your computer is vulnerable to a computer risk than you can always use some-type of online security service which is a website that checks your computer for email and Internet vulnerabilities. The company will then give some pointers on how to correct these vulnerabilities. The Computer Emergency Response Team Coordination Center is a place that can do this. The typical network attacks that puts computers at risk includes viruses, worms, spoofing, Trojan horses, and denial of service attacks. Every unprotected computer is vulnerable to a computer virus which is a potentially harming computer program that infects a computer negatively and altering the way the computer operates without the user’s consent. Once the virus is in the computer it can spread throughout infecting other files and potentially damaging the operating system itself. It’s similar to a bacteria virus that infects humans because it gets into the body through small openings and can spread to other parts of the body and can cause some damage. The similarity is, the best way to avoid is preparation. A computer worm is a program that repeatedly copies itself and is very similar to a computer virus. However the difference is that a virus needs o attach itself to an executable file and become a part of it. A computer worm doesn’t need to do that I seems copies to itself and to other networks and eats up a lot of bandwidth. A Trojan Horse named after the famous Greek myth and is used to describe a program that secretly hides and actually looks like a legitimate program but is a fake. A certain action usually triggers the Trojan horse, and unlike viruses and worms they don’t replicate itself. Computer viruses, worms, and Trojan horses are all classifies as malicious-logic programs which are just programs that deliberately harms a computer. Although these are the common three there are many more variations and it would be almost impossible to list them. You know when a computer is infected by a virus, worm, or Trojan horse if one or more of these acts happen:
Screen shots of weird messages or pictures appear.
You have less available memory then you expected
Music or sounds plays randomly.
Files get corrupted
Programs are files don’t work properly
Unknown files or programs randomly appear
System properties fluctuate
Computer viruses, worms, and Trojan horses deliver their payload or instructions through four common ways. One, when an individual runs an infected program so if you download a lot of things you should always scan the files before executing, especially executable files. Second, is when an individual runs an infected program. Third, is when an individual bots a computer with an infected drive, so that’s why it’s important to not leave media files in your computer when you shut it down. Fourth is when it connects an unprotected computer to a network. Today, a very common way that people get a computer virus, worm, or Trojan horse is when they open up an infected file through an email attachment. There are literally thousands of computer malicious logic programs and new one comes out by the numbers so that’s why it’s important to keep up to date with new ones that come out each day. Many websites keep track of this. There is no known method for completely protecting a computer or computer network from computer viruses, worms, and Trojan horses, but people can take several precautions to significantly reduce their chances of being infected by one of those malicious programs. Whenever you start a computer you should have no removable media in he drives. This goes for CD, DVD, and floppy disks. When the computer starts up it tries to execute a bot sector on the drives and even if it’s unsuccessful any given various on the bot sector can infect the computer’s hard disk. If you must start the computer for a particular reason, such as the hard disk fails and you are trying to reformat the drive make sure that the disk is not infected.