Data collection instrument risk management and internal control
General
The data consists of two types: (a) data related to risk management and internal control; and (b) company-specific data.
代写留学生论文Information regarding risk management and internal control
Below you find the list of variables for which information needs to be collected from annual reports. The list consists of 12 variables/items. You first get some general information related to the variable. Next, there is a table presenting the name of the variable plus information on how to score the information regarding the variable. The names of the variables correspond with the names used in the spreadsheet.
1. Strategic and operational risks. Assess whether a company provides information on strategic and/or operational risks in the annual report. These risks are related to, among other things, market developments, product development, inventory management, reputation and brands, customer satisfaction, efficiency of production, price and competition policy, sector-specific factors (e.g. regulatory changes at the sectoral level)inflsectorinvloeden, environmental aspects, etc.
StopRisk
0 The annual report provides no information on strategic and/or operational risks
1 The annual report does provide information on strategic and/or operational risks
2. Financial risks. Assess whether a company provides information on financial risks in the annual report. These risks are related to, among other things, interest rates, exchange rates, cashflows, the company’s liquidity position, changes in access to external finance (e.g. due to changes of the credit rating), etc.
FinRisk
0 The annual report provides no information on financial risks
1 The annual report does provide information on financial risks
3. Financial reporting risks. Assess whether a company provides information on risks related to financial reporting in the annual report. These risks are related to, among other things, design and operation of accounting (or management) information systems, design and operation of internal control measures, specific accounting problems concerning assets and liabilities (such as oil reserves, impairment, etc.).
RepRisk
0 The annual report provides no information on the financial reporting risks
1 The annual report does provides information on financial reporting risks
4. Responsibility. Several national corporate governance codes explicitly mention that the board of directors are responsible for designing an adequate risk management and internal control system, as well as for the fact that the system functions adequately. These codes also indicate that the board should report on these responsibilities.
Respons
0 In the annual report the board does not explicitly take its responsibilities for the internal control system
1 In the annual report the board does explicitly take its responsibilities for the internal control system
5. Risk management measures. What does a company report on the measures taken with respect to risk management and internal control? There are several posibilities. First, a company may provide no information at all about the risk management and internal control systems. Second, a company may just describe the risk management and internal control system in general terms. In this case, the /company will probably only mention that there is such a risk management system. Third, the company may provide details (perhaps even for each and every risk category) about the working of the risk management and internal control system (for example by providing details on how currency contracts mitigate exchange rate fluctuations, by mentioning details about insurance contracts, discussing the testing of internal control measures and related procedures, etc.)
RiskMan
0 The annual report does not provide any information about the risk management and internal control system
1 The annual report describes in general terms the risk management measures taken
2 The annual report provides specific descriptions of the risk management measures taken
6. Framework. When setting up a risk management and internal control system companies may make use of several existing best practices. The most well-known framework in this context is the one proposed by COSO in 1992 (and revised in 2004). In the annual report, the company may refer to the framework that has been used when designing the risk management and internal control system.
Framework
0 The annual report does not mention the framework used to design the risk management and internal control system
1 The annual report refers to COSO as the framework used to design the internal control system
2 The annual report refers to another framework
7. Statement referring to the effectiveness of the internal control system. An important aspect concerning the information on risk management and internal control is the statement of the board, or the CEO/CFO in particular, that the system has worked/functioned adequately. In many countries such a statement is not yet required (in the US and the Netherlands, among other countries, it is). This means that the board does not have to report on this in the annual report. If the board/CEO/CFO choose to publish a statement, this is usually published at the end of the section in which information is provided on risk management and internal control. Please note: if the board/CEO/CFO publish a statement in which it is mentioned that the system has not worked adequately, this must be counted as a statement about the working of the internal control system.
Effectiveness
0 The annual report does not contain an explicit statement of the board/CEO/CFO regarding the effectiveness of the internal control system
1 The annual report does contain an explicit statement of the board/CEO/CFO regarding the effectiveness of the internal control system
8. Type of statement regarding the effectiveness of the internal control system. If the annual report contains a statement regarding the effectiveness of the system (i.e. the score on the previous item was a ‘1’), two possibilities arise. First, the board/CEO/CFO states that the system has worked without any restriction or qualification. Second, the board/CEO/CFO states that the system has worked effectively, except for a number of weaknesses. Third, the board/CEO/CFO states that the system has not worked effectively.
EffectType
0 The annual report does not contain an explicit statement of the board/CEO/CFO regarding the effectiveness of the internal control system
1 The board/CEO/CFO states that the system has worked effectively without any restrictions/qualifications
2 The board/CEO/CFO states that the system has worked adequately except for one or more weaknesses; these weaknesses are mentioned explicitly
3 The board/CEO/CFO states that the system has not worked adequately
9. Statement of the auditor. If the annual report contains a statement by the board/CEO/CFO with respect to the effectiveness of the internal control system, then an external party, in most case an external auditor, may have been asked to assess this statement. The aim of this statement by an external auditor is to increase the credibility of the statement concerning the effectiveness of the internal control system.
Opinion
0 The annual report does not contain an explicit statement of an external auditor (or another external financial expert) with respect to the statement of the board/CEO/CFO regarding the effectiveness of the internal control system
1 The annual report does contain an explicit statement of an external auditor or another external financial expert with respect to the statement of the board/CEO/CFO regarding the effectiveness of the internal control system. This statement is issued by the same auditor who has also audited the annual report
2 The annual report does contain an explicit statement of an external auditor or another external financial expert with respect to the statement of the board/CEO/CFO regarding the effectiveness of the internal control system. This statement is not issued by the same auditor who has also audited the annual report
3 The annual report does contain an explicit statement of an external auditor or another external financial expert with respect to the statement of the board/CEO/CFO regarding the effectiveness of the internal control system. This statement is issued by an external party, not being a representative of an auditing company
10. Company code. According to the International Federation of Accountants (IFAC), a company code can be defined as follows: “Principles, values, standards, or rules of behavior that guide the decisions, procedures and systems of an organization in a way that (a) contributes to the welfare of its key stakeholders, and (b) respects the rights of all constituents affected by its operations.” Company codes may be an important component of internal control systems. In the context of the research you do on internal control and corporate governance, the company codes we are looking for should be related to corporate behavior and/or corporate culture. Examples of such company codes are a whistleblower code or act, a code of good practice, etc. When searching for such a code you may use search terms such as: “code of conduct’ , “code”, “whistleblow”, “good practice”, “conduct”, “guidelines” en “principles”. Since these terms may also be used in contexts other than related to company codes, the search should only focus on the non-financial parts of the annual report, in particular on those sections dealing with corporate governance, sustainability, operations en internal control.
Codes
0 The annual report does not refer to a company code, a code of good practice/conduct or a whistleblowers act
1 The annual report does refer to a company code, a code of good practice/conduct or a whistleblowers act
11. Internal control committee. Internal control is a crucial aspect of the corporate governance system of a company. Therefore, a company may decide to establish a separate internal control committee (next to the remuneration committee, nomination committee, audit committee, etc.), which deals with the risk management and internal control of the company.
ICCom
0 The annual report does not mention the existence of a separate risk management and internal control committee.
1 The annual report does mention the existence of a separate risk management and internal control committee.
2 The annual report only mentions that the audit committee deals with issues related to risk management and internal control
12. RiskQuant. For this variable you should report the quantity of information with respect to risk management that can be found in the annual report. The quantity of information on risk management can be calculated as follows:
a. Determine the total number of pages discussing risk management and internal control. In order to count the number of pages, only take the pages before the annual accounts (i.e. only the descriptive part of the annual report). If information only covers part of a page, estimate whether it is 25, 50 or 75 per cent of the total page.
b. Determine the total number of pages (including the tables and graphs) from the table of contents until the annual accounts (i.e. the descriptive part of the annual report). If there is no table of contents, start counting from the title page (but do not include this title page).
c. The percentage to be calculated is a/b * 100%.
Company-specific information
Information on risk management and internal control systems allow for descriptive analyses of how companies deal with designing and using these systems. Moreover, the information allows for comparative analyses between companies, industries and countries. Such comparative analyses are particularly interesting. In order to be able to do this, company and country-specific information is needed. In many cases, this type of information can also be found in annual reports. Below, you find a list of company characteristics for which data needs to be collected. The data must be recorded in the same spreadsheet in which the data on risk management and internal control have been recorded. The names of the variables refer to the names of the variables in the spreadsheet. Please note: data need to be collected for 2005. In a few cases data for another year needs to be collected; this will be explicitly mentioned.
1. Currency: Specify the currency (Euro, UK pounds, U.S. dollars, etc.) in which the company reports its accounts in the annual report. Later on all quantitative data will be transformed into Euros (by me).
2. Date: Specify the accounting date, i.e. the date on which the consolidated balance sheet and/or the income statement are settled. This information is needed in order to be able to transform data to Euros.
3. Size: Total assets of 2005 in local currency. Please note: some companies report in thousands, millions or billions (and leave out 3, 6, or 9 zeros). Make clear whether the numbers you report refer to thousands, millions or billions.
4. Leverage: Total debt divided by total assets of 2005.
5. Receivables: Total receivables divided by total assets.
6. Sales 05: Sales in 2005 in local currency. Please note: some companies report in thousands, millions or billions (and leave out 3, 6, or 9 zeros). Make clear whether the numbers you report refer to thousands, millions or billions.
7. Sales 04: Sales in 2004 in local currency. Please note: some companies report in thousands, millions or billions (and leave out 3, 6, or 9 zeros). Make clear whether the numbers you report refer to thousands, millions or billions.
8. NetInc 05: Net income 2005 in local currency. Report a minus in case of a loss. Please note: some companies report in thousands, millions or billions (and leave out 3, 6, or 9 zeros). Make clear whether the numbers you report refer to thousands, millions or billions.
9. NetInc 04: Net income 2004 in local currency. Report a minus in case of a loss. Please note: some companies report in thousands, millions or billions (and leave out 3, 6, or 9 zeros). Make clear whether the numbers you report refer to thousands, millions or billions.
10. Foreign: Dummy variable taking the value one (1) if the annual report mentions foreign currency translation differences. One quick way to search for this is to use <foreign currency> as a search term in Acrobat Reader. If there are no foreign currency translation differences, this variable takes the value zero (0).
11. Big 4: Dummy variable taking the value one (1) if the statement of the auditor is signed by an auditor of Ernst & Young, Deloitte, KPMG or PricewaterhouseCoopers. In all other cases this variable takes the value zero (0).
12. IntAudit: Dummy variable taking the value one (1) if in the annual report it is indicated that the company has an internal audit function. This can be found by using the search term <internal audit> in Acrobat Reader. If report does not indicate there is an internal audit function, this variable takes the value zero (0).
13. U.S.-list: Dummy variable taking the value one (1) if the company is listed on a US stock exchange (i.e. NYSE or NASDAQ). In all other cases this variable takes the value zero (0). In most cases this information can be found in sections such as “Shareholders’ information”, “Information on the company’s shares”, etc.
14. U.K.-list: Dummy variable taking the value one (1) if the company is listed on a UK stock exchange (i.e. London Stock Exchange). In all other cases this variable takes the value zero (0). In most cases this information can be found in sections such as “Shareholders’ information”, “Information on the company’s shares”, etc.
15. Board size: Total number of directors (executives) and supervisors (non-executives). If the company has two separate boards (two-tier system), then numbers of both boards should be taken together.
16. AC size: Total number of members of the audit committee. If there is no audit committee, report the value zero (0).
17. FinExp: Dummy variable taking the value one (1) if at least one of the members of the audit committee is a financial expert. In all other cases this variable takes the value zero (0). A member is supposed to be a financial expert if he/she has a background in accountancy or if he/she has been financial officer in the past.
18. Stock: This variable may take the following values:
Stock
0 There is no shareholder owning 5 per cent or more of total shares of the company
1 There is at least one shareholder owning between 5 and 10 per cent of total shares of the company
2 There is at least one shareholder owning more than 10 per cent of total shares of the company
Usually, this information can be found in sections such as “Information for shareholders”, or “Information on the company’s stock”. Another possibility is to look for the section(s) discussing the company’s equity or the section(s) discussing so-called related party transactions.
19. Industry: This variable may take the following values:
Industry
0 The company belongs to other sectors
1 The company belongs to the manufacturing/production sectors. Companies in these sectors produce real goods. Examples of these sectors are the car industry, electronics, metal and industry, chemical and petro-chemical industry, food industry, etc.
2 The company belongs to the trade sectors. Companies in these sectors are mainly involved in trading finished goods. Examples of these sectors are the retail sector and the wholesale sector. Please note that companies in the financial services should be left out of the sample (see page 1 of this document).
Data collection instrument risk management and internal control
General
The data consists of two types: (a) data related to risk management and internal control; and (b) company-specific data.
Information regarding risk management and internal control
Below you find the list of variables for which information needs to be collected from annual reports. The list consists of 12 variables/items. You first get some general information related to the variable. Next, there is a table presenting the name of the variable plus information on how to score the information regarding the variable. The names of the variables correspond with the names used in the spreadsheet.
1. Strategic and operational risks. Assess whether a company provides information on strategic and/or operational risks in the annual report. These risks are related to, among other things, market developments, product development, inventory management, reputation and brands, customer satisfaction, efficiency of production, price and competition policy, sector-specific factors (e.g. regulatory changes at the sectoral level)inflsectorinvloeden, environmental aspects, etc.
StopRisk
0 The annual report provides no information on strategic and/or operational risks
1 The annual report does provide information on strategic and/or operational risks
2. Financial risks. Assess whether a company provides information on financial risks in the annual report. These risks are related to, among other things, interest rates, exchange rates, cashflows, the company’s liquidity position, changes in access to external finance (e.g. due to changes of the credit rating), etc.
FinRisk
0 The annual report provides no information on financial risks
1 The annual report does provide information on financial risks
3. Financial reporting risks. Assess whether a company provides information on risks related to financial reporting in the annual report. These risks are related to, among other things, design and operation of accounting (or management) information systems, design and operation of internal control measures, specific accounting problems concerning assets and liabilities (such as oil reserves, impairment, etc.).
RepRisk
0 The annual report provides no information on the financial reporting risks
1 The annual report does provides information on financial reporting risks
4. Responsibility. Several national corporate governance codes explicitly mention that the board of directors are responsible for designing an adequate risk management and internal control system, as well as for the fact that the system functions adequately. These codes also indicate that the board should report on these responsibilities.
Respons
0 In the annual report the board does not explicitly take its responsibilities for the internal control system
1 In the annual report the board does explicitly take its responsibilities for the internal control system
5. Risk management measures. What does a company report on the measures taken with respect to risk management and internal control? There are several posibilities. First, a company may provide no information at all about the risk management and internal control systems. Second, a company may just describe the risk management and internal control system in general terms. In this case, the company will probably only mention that there is such a risk management system. Third, the company may provide details (perhaps even for each and every risk category) about the working of the risk management and internal control system (for example by providing details on how currency contracts mitigate exchange rate fluctuations, by mentioning details about insurance contracts, discussing the testing of internal control measures and related procedures, etc.)
RiskMan
0 The annual report does not provide any information about the risk management and internal control system
1 The annual report describes in general terms the risk management measures taken
2 The annual report provides specific descriptions of the risk management measures taken
6. Framework. When setting up a risk management and internal control system companies may make use of several existing best practices. The most well-known framework in this context is the one proposed by COSO in 1992 (and revised in 2004). In the annual report, the company may refer to the framework that has been used when designing the risk management and internal control system.
Framework
0 The annual report does not mention the framework used to design the risk management and internal control system
1 The annual report refers to COSO as the framework used to design the internal control system
2 The annual report refers to another framework
7. Statement referring to the effectiveness of the internal control system. An important aspect concerning the information on risk management and internal control is the statement of the board, or the CEO/CFO in particular, that the system has worked/functioned adequately. In many countries such a statement is not yet required (in the US and the Netherlands, among other countries, it is). This means that the board does not have to report on this in the annual report. If the board/CEO/CFO choose to publish a statement, this is usually published at the end of the section in which information is provided on risk management and internal control. Please note: if the board/CEO/CFO publish a statement in which it is mentioned that the system has not worked adequately, this must be counted as a statement about the working of the internal control system.
Effectiveness
0 The annual report does not contain an explicit statement of the board/CEO/CFO regarding the effectiveness of the internal control system
1 The annual report does contain an explicit statement of the board/CEO/CFO regarding the effectiveness of the internal control system
8. Type of statement regarding the effectiveness of the internal control system. If the annual report contains a statement regarding the effectiveness of the system (i.e. the score on the previous item was a ‘1’), two possibilities arise. First, the board/CEO/CFO states that the system has worked without any restriction or qualification. Second, the board/CEO/CFO states that the system has worked effectively, except for a number of weaknesses. Third, the board/CEO/CFO states that the system has not worked effectively.
EffectType
0 The annual report does not contain an explicit statement of the board/CEO/CFO regarding the effectiveness of the internal control system
1 The board/CEO/CFO states that the system has worked effectively without any restrictions/qualifications
2 The board/CEO/CFO states that the system has worked adequately except for one or more weaknesses; these weaknesses are mentioned explicitly
3 The board/CEO/CFO states that the system has not worked adequately
9. Statement of the auditor. If the annual report contains a statement by the board/CEO/CFO with respect to the effectiveness of the internal control system, then an external party, in most case an external auditor, may have been asked to assess this statement. The aim of this statement by an external auditor is to increase the credibility of the statement concerning the effectiveness of the internal control system.
Opinion
0 The annual report does not contain an explicit statement of an external auditor (or another external financial expert) with respect to the statement of the board/CEO/CFO regarding the effectiveness of the internal control system
1 The annual report does contain an explicit statement of an external auditor or another external financial expert with respect to the statement of the board/CEO/CFO regarding the effectiveness of the internal control system. This statement is issued by the same auditor who has also audited the annual report
2 The annual report does contain an explicit statement of an external auditor or another external financial expert with respect to the statement of the board/CEO/CFO regarding the effectiveness of the internal control system. This statement is not issued by the same auditor who has also audited the annual report
3 The annual report does contain an explicit statement of an external auditor or another external financial expert with respect to the statement of the board/CEO/CFO regarding the effectiveness of the internal control system. This statement is issued by an external party, not being a representative of an auditing company
10. Company code. According to the International Federation of Accountants (IFAC), a company code can be defined as follows: “Principles, values, standards, or rules of behavior that guide the decisions, procedures and systems of an organization in a way that (a) contributes to the welfare of its key stakeholders, and (b) respects the rights of all constituents affected by its operations.” Company codes may be an important component of internal control systems. In the context of the research you do on internal control and corporate governance, the company codes we are looking for should be related to corporate behavior and/or corporate culture. Examples of such company codes are a whistleblower code or act, a code of good practice, etc. When searching for such a code you may use search terms such as: “code of conduct’ , “code”, “whistleblow”, “good practice”, “conduct”, “guidelines” en “principles”. Since these terms may also be used in contexts other than related to company codes, the search should only focus on the non-financial parts of the annual report, in particular on those sections dealing with corporate governance, sustainability, operations en internal control.
Codes
0 The annual report does not refer to a company code, a code of good practice/conduct or a whistleblowers act
1 The annual report does refer to a company code, a code of good practice/conduct or a whistleblowers act
11. Internal control committee. Internal control is a crucial aspect of the corporate governance system of a company. Therefore, a company may decide to establish a separate internal control committee (next to the remuneration committee, nomination committee, audit committee, etc.), which deals with the risk management and internal control of the company.
ICCom
0 The annual report does not mention the existence of a separate risk management and internal control committee.
1 The annual report does mention the existence of a separate risk management and internal control committee.
2 The annual report only mentions that the audit committee deals with issues related to risk management and internal control
12. RiskQuant. For this variable you should report the quantity of information with respect to risk management that can be found in the annual report. The quantity of information on risk management can be calculated as follows:
a. Determine the total number of pages discussing risk management and internal control. In order to count the number of pages, only take the pages before the annual accounts (i.e. only the descriptive part of the annual report). If information only covers part of a page, estimate whether it is 25, 50 or 75 per cent of the total page.
b. Determine the total number of pages (including the tables and graphs) from the table of contents until the annual accounts (i.e. the descriptive part of the annual report). If there is no table of contents, start counting from the title page (but do not include this title page).
c. The percentage to be calculated is a/b * 100%.
Company-specific information
Information on risk management and internal control systems allow for descriptive analyses of how companies deal with designing and using these systems. Moreover, the information allows for comparative analyses between companies, industries and countries. Such comparative analyses are particularly interesting. In order to be able to do this, company and country-specific information is needed. In many cases, this type of information can also be found in annual reports. Below, you find a list of company characteristics for which data needs to be collected. The data must be recorded in the same spreadsheet in which the data on risk management and internal control have been recorded. The names of the variables refer to the names of the variables in the spreadsheet. Please note: data need to be collected for 2005. In a few cases data for another year needs to be collected; this will be explicitly mentioned.
1. Currency: Specify the currency (Euro, UK pounds, U.S. dollars, etc.) in which the company reports its accounts in the annual report. Later on all quantitative data will be transformed into Euros (by me).
2. Date: Specify the accounting date, i.e. the date on which the consolidated balance sheet and/or the income statement are settled. This information is needed in order to be able to transform data to Euros.
3. Size: Total assets of 2005 in local currency. Please note: some companies report in thousands, millions or billions (and leave out 3, 6, or 9 zeros). Make clear whether the numbers you report refer to thousands, millions or billions.
4. Leverage: Total debt divided by total assets of 2005.
5. Receivables: Total receivables divided by total assets.
6. Sales 05: Sales in 2005 in local currency. Please note: some companies report in thousands, millions or billions (and leave out 3, 6, or 9 zeros). Make clear whether the numbers you report refer to thousands, millions or billions.
7. Sales 04: Sales in 2004 in local currency. Please note: some companies report in thousands, millions or billions (and leave out 3, 6, or 9 zeros). Make clear whether the numbers you report refer to thousands, millions or billions.
8. NetInc 05: Net income 2005 in local currency. Report a minus in case of a loss. Please note: some companies report in thousands, millions or billions (and leave out 3, 6, or 9 zeros). Make clear whether the numbers you report refer to thousands, millions or billions.
9. NetInc 04: Net income 2004 in local currency. Report a minus in case of a loss. Please note: some companies report in thousands, millions or billions (and leave out 3, 6, or 9 zeros). Make clear whether the numbers you report refer to thousands, millions or billions.
10. Foreign: Dummy variable taking the value one (1) if the annual report mentions foreign currency translation differences. One quick way to search for this is to use <foreign currency> as a search term in Acrobat Reader. If there are no foreign currency translation differences, this variable takes the value zero (0).
11. Big 4: Dummy variable taking the value one (1) if the statement of the auditor is signed by an auditor of Ernst & Young, Deloitte, KPMG or PricewaterhouseCoopers. In all other cases this variable takes /the value zero (0).
12. IntAudit: Dummy variable taking the value one (1) if in the annual report it is indicated that the company has an internal audit function. This can be found by using the search term <internal audit> in Acrobat Reader. If report does not indicate there is an internal audit function, this variable takes the value zero (0).
13. U.S.-list: Dummy variable taking the value one (1) if the company is listed on a US stock exchange (i.e. NYSE or NASDAQ). In all other cases this variable takes the value zero (0). In most cases this information can be found in sections such as “Shareholders’ information”, “Information on the company’s shares”, etc.
14. U.K.-list: Dummy variable taking the value one (1) if the company is listed on a UK stock exchange (i.e. London Stock Exchange). In all other cases this variable takes the value zero (0). In most cases this information can be found in sections such as “Shareholders’ information”, “Information on the company’s shares”, etc.
15. Board size: Total number of directors (executives) and supervisors (non-executives). If the company has two separate boards (two-tier system), then numbers of both boards should be taken together.
16. AC size: Total number of members of the audit committee. If there is no audit committee, report the value zero (0).
17. FinExp: Dummy variable taking the value one (1) if at least one of the members of the audit committee is a financial expert. In all other cases this variable takes the value zero (0). A member is supposed to be a financial expert if he/she has a background in accountancy or if he/she has been financial officer in the past.
18. Stock: This variable may take the following values:
Stock
0 There is no shareholder owning 5 per cent or more of total shares of the company
1 There is at least one shareholder owning between 5 and 10 per cent of total shares of the company
2 There is at least one shareholder owning more than 10 per cent of total shares of the company
Usually, this information can be found in sections such as “Information for shareholders”, or “Information on the company’s stock”. Another possibility is to look for the section(s) discussing the company’s equity or the section(s) discussing so-called related party transactions.
19. Industry: This variable may take the following values:
Industry
0 The company belongs to other sectors
1 The company belongs to the manufacturing/production sectors. Companies in these sectors produce real goods. Examples of these sectors are the car industry, electronics, metal and industry, chemical 代写留学生论文and petro-chemical industry, food industry, etc.
2 The company belongs to the trade sectors. Companies in these sectors are mainly involved in trading finished goods. Examples of these sectors are the retail sector and the wholesale sector. Please note that companies in the financial services should be left out of the sample (see page 1 of this document).