Development of Accounting Systems in China

Development of Accounting Systems in China Abstract This report put the accounting development in China into perspective. Describe the history and changes in the accounting environment of China during the recent economic reforms by using the Greys (1988) accounting value to analyzing the culture impact on accounting systems development in China, and then, illustrate the institutional and environmental factors which driven Chinas accounting system made changes, the reasons of those changes and then describes the major problem in Chinas accounting development as well as to point out whether would be changes in the future. Introduction This report is aim to describe the development of accounting system in China, including the history of Chinas accounting except Hong Kong, the one country, two systems policy allowed Hong Kong remain its market-led capitalist system. Then, it would describe the traditional use of accounting and the factors that influenced Chinas accounting development as well as what the changes it has made what the major problems that China has face in developing the accounting system. Then, it would discuss whether China would have further changes of accounting system in the future in my opinion. There has a conclusion in the end. Country profile China had more than 1.34 billion population at the end of 2010. National Bureau of Statistics (NBS) announced Chinas GDP reaching 39.79 trillion yuan (approximately 6.04 trillion US dollars) over the course of 2010. (Du Xiaodan, 2011 Paul Pennay, 2011) Brief history of  accounting in China According to Zhang Guohua (2005), Chinas economy has undergone three periods of change since 1949: 1949- 1978: a socialist, centrally controlled, planned economy. 1979- 1992: socialist commodity economy. 1992- present: socialist market economy. Chinas accounting system has changed with the economy, almost like the period of the Chinas economy. Development of accounting systems can generally be divided into the four stages: (more detailed information of Chinas accounting history can be found in Appendix 1.) 1949-1978 was the first stage which the uniform accounting system and the 1978-1992, Chinas accounting system has during the transition and the construction. Then, from 1992 to 1997, the construction of a new accounting system has issued. The fourth period is from 1997 to present. The ASC was set up in October 1998 by the Ministry of Finance to oversee the development of a complete set of Chinese GAAP. In order to join in the WTO, Chinas accounting standards made some change to closer to IFRS/IASs. The new Chinese Accounting Standards were adopted by all listed companies from 1 January 2007. Chinese Accounting Standards will continue to be updated in line with IFRS developments. (Gray et al, 1995 Wang Baozhong et al, 2009 Zhang Guohua, 2005 The Institute of Chartered Accountants of Scotland, 2010) Traditional use in China The basic function of financial accounting is to accounting and monitoring. With the founding of the PRC in 1949, all resources of production in the country came under State ownership. Accounting was primarily used for establishing information and reporting system for the implementation of national economic policies and resource allocation in the planned economy. (InterChina, 2009) The objectives of financial reporting system have been stated to serves one user primarily, the government, and then it is stated very broadly to strengthen accounting work of share enterprise, to protect the legitimate interest of investors and creditorsà ¢Ã¢â€š ¬Ã‚ ¦ (Ministry of Finance, 1992).The change in industry and ownership specific accounting system is due to the need of macroeconomic planning require a uniform system. (Tang, Qingliang, 2000) During the developing of accounting system, there are a number of users makes use of accounting in different purpose. Such as Shareholders use accounts to examine the health of business, and the dividends that they can expect to make. The bank may use the account to see how much loan they would provide for the company, and government would see the how much tax the company needs to pay. The main use for accounting is to comply with legal and other requirements, to provide information for stakeholders about financial performance and viability, to provide managers with information for decision making and to provide a structure to business activity based on the careful processing of numerical data. (The Times 100, n.d) The cultural factor that influenced its development The development of accounting was influenced by both cultural and environmental factors. They shape the accounting system in China. As Merino (cited in Carnegie and Napier, 2002) mentioned, All source material must be viewed as a reflection of the culture. The transition from a communist economy to a capitalist market economy can summarize as contributed by the factors as politic, culture, as well as the reform of social and economic or regional and international integration. Before economic reform, Chinas communist culture (See appendix 2) has strongly influence all the means of accounting control, whether accounting plans, balance sheets, and income statements or, in a wider sense, audit techniques. (Cigdem Solas and Sinan Ayhan, 2008) all the surpluses were owned by the state. A table (See appendix 3) summarizes the information on the difference between capitalist and communist systems, and issues raised for examination regarding their reflection in accounting. The transitions of the culture and economy reform were both influence the accounting system in China. For example, the concept of profit is meaningless under communist culture due to the panned economy which the surplus goes to government. In capitalism culture, the economic entity would need to have a certain type of boundary; the profit is one of its results. Particular rules for payment of the various parties involved would also be required, and monetary assessments of economic flows registered would have to be at least partly based on market mechanisms. Its status as a measurement of a single entitys performance presumes that there is a capacity for free enterprise do not existing in communist economic structures. Greys (1988) model derived accounting values from studies of societal value dimensions by Hofstede (1984), and Greys model has been used to analyse the cultural impact on accounting development in China. Professionalism V Statutory Chinas accounting system is strongly controlled by state rather than professional. The state closely controlled all enterprises by centralized plans. The profession is also still relatively new, small and powerless and it is currently occupied with the problems involved in meeting the new audit requirements. And it is unlikely to give up this power to a professional body so far. (Roberts, Weetman and Gordon, 2008) This is mainly because the strong power distance in China. In China, power is unquestioned, no matter it is right or wrong, the accountants in China cannot rely on their professional view. Uniformity V Flexibility Due to the special circumstances, China has a dual approach which retained a uniform accounting system in the Accounting System for Business Enterprises (ASBE) while also developing accounting standards based on IFRS. Enterprises have no judgment at all on how to account for particular transactions or events according to the uniform system. (Roberts, Weetman and Gordon, 2008) It is just as the same as the statutory in China, the accountants has been regulated by the uniform accounting regulation, they have to do as the regulation told to. Conservatism V Optimism The accounting system in China is conservatism rather than optimism. The Accounting System illustrate that an enterprise should fulfill the requirements of the prudence concept. Including, an enterprise should not overstate assets or revenue, or understate liabilities or expenses. It should not provide for any hidden reserve. (Roberts, Weetman and Gordon, 2008) which means Chinas accounting system has high level of uncertainly avoidance. Chinese government likes to plan everything in advance just the five years plan, they do not want to see something happen unexpected due to the complex situation. Secrecy V Transparency Chinas accounting system has highly secrecy due to the large power distance and strong uncertain avoidance. The collectivist culture of China require the enterprise offer their information to the society but within a range of narrative disclosure which stated in ASBE 2001. (Roberts, Weetman and Gordon, 2008) only related people can see the accounting information such as the managers, shareholders and the government officers. This feature is due to Chinas prudent culture, it is different as the western country but it is totally consistent with Chinas situation. Problems for using the Greys model There have some problems by using either Hofsteade model or Greys model to analyzing Chinas situation. Those models has been stated many years ago, in addition, China is rapid development in every aspects those years, therefore, the model may not be 100% appropriate with the situation nowadays. Another problem is China is really big; there has huge gap between west area and east area no matter in economy or culture. Institutional and Environmental factors There are several environmental factors which influence accounting system in China. Economic and enterprise reforms have influence the financial reports by change of the contents, format and uses. Enterprises in China are no longer relying on fund appropriation instead of independence in their operational and financing activities. Banking and financing system has restructured, therefore, the role of the state as a source of funds has been reduced. (Tang, Qingliang, 2000) Furthermore, various forms of business combinations with joint ownership have emerged (Tang et al, 1992). The rigid, fund-orientated and industry/ownership specific financial reporting system and practices are no longer well-matched the changing business environment. As a result, a universal and user-oriented financial reporting system is necessary to meets the needs of the economic reform. Due to the economic factors, the Objectives of Financial Reporting has made some change as well as the Industry and Ownership Specific Accounting System. Furthermore, foreign investment started to influence Chinas accounting system since the open-doors policy. The increasing of foreign direct investment and international business transaction driven China change its accounting system close to international accounting and report standard. (Tang, Qingliang, 2000) The legal factors have been influenced by other factors. The government system is one of the legal factors. The new accounting regulation system (See Appendix 3) is being developed towards a legal one. The National Peoples Congress issued the first tier accounting law in 1985 and revised in 1993 and 1999. It is the basic law of accounting in China as well as the basis of Chinas accounting work and other related accounting regulations. The State Council and Ministry of Finance formulated second tier- the executive regulations which form conceptual framework and general principles of accounting. The third tier authorized by the PRC Accounting Law and formulated by the Ministry of Finance. (Zhang Guohua, 2005) The legal framework for Chinas accounting system and reporting standards have changed step by step to fulfill the need of economy development. Another driving force for the accounting change is the development of capital market. In 1990 and 1991, the Shanghai Stock Exchange and Shenzhen Stock Exchange were established. The development of capital market has influenced Chinese accounting change toward to a capital market-oriented system. Therefore, the structure, content, format, and disclosure of financial information have been significantly influenced by the needs of the capital market. (Tang, Qingliang, 2000) Problems occurred in development There also appeared some problem during the Chinas accounting systems development and transition into international accounting standard. First is that Chinese accounting system and IAS requiring different practices; for example, inventory must be valued at historical costs under Chinese GAAP, but at the lower of cost and market (LOCAM) under IAS. Another example is accounting for long-term investment. Chinese GAAP offers companies a free choice between cost and equity methods if their investments in shares do not exceed 50 percent. But in other words, differences between Chinas accounting system and IAS can be reduced by changing accounting standards. (Charles J. P Chen, Ferdinand A. Gui and Xijia Su, 1999) Second, to implementation of IAS requires professional judgment from management as well as auditors. Professional independence and implement of standards have been identified as the two critical issues in international auditing. (Stamp and Moonitz, 1982) The severe shortage of qua lified accountants and auditors in China delay the development of professional auditing (Winkle et al. 1994; Graham 1996) Further changes The development of Chinas accounting system needs to fit Chinas special circumstance. It is impossible to expect independent/professional auditing to be achievable in China in the future. This implies that the proposed accounting standards will have to operate without independent/professional auditing. It is likely that the flexibility in the detailed accounting standards will provide opportunities for managers to engage in aggressive earnings management, reducing, even eliminating the probability of showing a true and fair view. Therefore, the lack of independent/professional auditing can neutralize the objective of prudence and turn the flexibility into a land of opportunities for earnings exploitation. (Bing Xiang, 1998) In my opinion, there has a trend, which the Chinas accounting system would slightly change towards to the international accounting system in the future, but would never be exactly the same with the international accounting system because of Chinas special circumst ance like one-party policy, different situation in different area, huge power distance and not so easy to managing the big land of China. Conclusion In conclusion, China has undergone profound changes in recent years, not only the economic system but also the accounting standards. China has moved from a system of public ownership of all enterprises to a mixed system with increasing private ownership of both small and large companies. There have many factors such as cultural and institutional factors which led to those changes as well as some problem which hold the change back, but Chinas accounting system would still change towards to the IAS due to the requirement of economic development. References Bing, X., (1998) Institutional Factors Influencing Chinas Accounting Reforms and Standards. Accounting Horizons. 12(2) pp: 105-119. Carnegie, G.D. and Napier, C.J., (2002) Exploring Comparative International Accounting History, Accounting, Auditing Accountability Journal, 15(5). pp 689-718. Chen, J. P., Gui, A.F., and Su, X., (1999) A Comparison of Reported Earnings Under Chinese GAAP vs. IAS: Evidence from the Shanghai Stock Exchange. Accounting Horizons. 13(2) pp: 91-111. Chiapello, E., and Ding,Y., (2005) Searching for The Accounting Features of Capitalism: An Illustration with Economic Transition Process in China, SASE, Budapest. Chow, L.M., Chau, G.K. and Gray, S.J. (1995) Accounting reforms in China: cultural constraints on implementation and development, Accounting and Business Research, 26(1): 29-49. Du, X., (2011) China has 1.34 billion populations by 2010. [WWW] Xinhua NEWS. Available from: http://english.cntv.cn/20110228/109748.shtml [Assessed 1/3/2011] Graham, L., (1996). Setting a research agenda for auditing issues in the Peoples Republic of China. The International Journal of Accounting. 31(1). pp: 19-37. InterChina, (2009) Accounting in China. InterChina Consulting. The Institute of Chartered Accountants of Scotland, (2010) Chinese accounting reform: Towards a principles-based global regime. ISBN: 978-1-904574-62-0. Edinburgh: Technical Policy Board of the Institute of Chartered Accountants of Scotland (ICAS). Ministry of Finance, Chinese Government, (1992). Accounting system for foreign investment enterprises. Pennay, P., (2011) Chinas GDP Increased by 10.3% in 2010. [WWW] the Economic Observer online. Available from: http://www.eeo.com.cn/ens/homepage/briefs/2011/01/20/191877.shtml [Assessed 1/3/2011] Roberts, C., Weetman, P., and Gordon, P., (2008) International Corporate Reporting: A Comparative Approach. 4th ed. FT Prentice Hall. Stamp, E., and Moonitz, M., (1982). International Auditing Standards: Part I. CPA Journal. pp 24-32. Solas, S., and Ayhan, S., (2008) The Historical Evolution of Accounting in China (Novissima Sinica): Effects of Culture (2nd Part). Spanish Journal of Accounting History. No.8 pp: 138-163. Tang, Q.L., (2000) Accounting Reforms in China: A Transition from State Plan and Control-Oriented System to Capital Market-Oriented System. Managerial Finance. 26(5) pp: 80-99. Tang, Y., Chow, L., and Cooper, B., (1992). Accounting and Finance in China: A review of current practice. Hong Kong: Longman. The Times 100, (n.d.) Accounting Functions. [WWW] The Times 100. Available from: http://www.thetimes100.co.uk/theory/theoryaccounting-functions111.php [Assessed 2/3/2011] Wang, B.Z., Huang, J.Y., Wang, B.Q., (2009) Change of Accounting System Review. Communication of Finance and Accounting à ¢Ã¢â€š ¬Ã‚ ¢Ãƒ ¢Ã¢â€š ¬Ã‚ ¢ NG. Issue6. Winkle, G., Huss, H., and Chen, X., (1994). Accounting standards in the Peoples Republic of China: Responding to economic reforms. Accounting Horizons. Issue: 8. pp: 48-57. Zhang, G., (2005) Environmental factors in Chinas financial accounting since 1949. Netherland: Erasmus University Rotterdam. Appendix 1 History of accounting systems development in China Chinas accounting history can be traced back 2000 years ago. The word accounting first appeared in Western Zhou Dynasty à ¯Ã‚ ¼Ã‹â€ 11th century BC to 770 BCà ¯Ã‚ ¼Ã¢â‚¬ °. During the Tang Dynasty (AD 618-907), Account book appeared for recording the annual fiscal revenues. The basic traditional Chinese accounting theory such as the scientific bookkeeping method and the four pillars accounts was created in Song Dynasty (AD 960-1279). A new method called Long Men Zhang which is similar to the double-entry bookkeeping method has created in Ming Dynasty (AD1369-1644). Single-entry bookkeeping has been used in prior to 1911. (Zhang Guohua, 2005) Since 1949, Development of accounting systems can generally be divided into the four stages: First stage is from 1949 to 1978: 1949-1952 a unified accounting system of affiliated enterprises was developed by the central government. 1958-1959, the accounting system has been severely damaged by the scholasticism thinking, some people claimed to simplify the accounting system. 1960 to 1966, due to economic development, people realized the importance of accounting. Critical theorists illustrated the error approach of simplify the accounting system, then, the accounting system design work has received attention. Furthermore, the industry-specific regulation has been issued. (Gray et al, 1995 Wang Baozhong et al, 2009 Zhang Guohua, 2005) Second stage is from 1978 to 1992: Chinas accounting has undergone drastic changes due to the opening-up and beginning of reform. 1979-1922, Enterprises started to issue equity shares in 1984. The number of Sino-foreign joint venture has increased; Ministry of Finance has issued the Laws on Sino- foreign Joint Venture to solve the problem of difficult of foreign staff in accounting and use the accounting information. These included a joint venture income tax law and laws on contracts and foreign exchange. Accounting Regulations for Sino-Foreign Joint Ventures and Charts of Account and Accounting Statements for Industrial Sino-Foreign Joint Ventures has issued in 1985 which is the first accounting system reference to international conventions to satisfy the new accounting system in China. (Gray et al, 1995 Wang Baozhong et al, 2009 Zhang Guohua, 2005) Third stage is from 1992 to 1997: Ministry of Finance and the National Committee of Economic Structure Reform jointly promulgated Accounting Regulations for Share Enterprises in 1992. Furthermore, Accounting System for Business Enterprises (ASBE) issued in November 1992. The ASBE was a major attempt both to unify the accounting systems used by different industries and to move financial accounting towards international accounting practices. Because of the development of foreign exchange markets, these regulations which made in 1985 were replaced by Accounting Regulations for Enterprises with Foreign Investments and Charts of Accounts and Accounting Statements for Industrial Enterprises with Foreign Investments in 1993. (Gray et al, 1995 Wang Baozhong et al, 2009 Zhang Guohua, 2005) The fourth stage is start from 1997 to present: the Accounting Standard Committee issued to establishing a complete set of accounting standard. The Accounting Law of the PRC which revised in 2000 is the highest level of authority which replaced the pervious law of 1992. (Gray et al, 1995 Wang Baozhong et al, 2009 Zhang Guohua, 2005)

Indian Price Rises

Rising Price in India wrote by : MILAN CHATERJEE ,india from : http://www. publishyourarticles. org/eng/articles/rising-price-in-india. html Today, India is facing many problems – the problem of corruption, the problem of unemployment, the problem of illiteracy, the problem of population, so on and so forth. The problem of rising prices is one of the most important problems that Indian is facing now. This problem is two-fold to check the rising prices and, if possible, to bring the prices down. The economists are of opinion that growing economy of the country has given rise to the rising prices. Such economy causes inflation.In inflation purchasing power runs ahead of purchasable goods. In other words, in a growing country, the supply of money increase at once but the supply of goods takes time to increase. Again the population has increased. This has further increased inflation. Because of growing population the current corruption is increasing. There is another cause of risi ng prices. The production of consumption goods has been very slowly rising. Our plants are also responsible for the present food situation. High targets were set to be achieved in defense and development. Levels of outlay on the development were suggested.No consideration was given to the existing state of economy. The pressure on real resources has been increasing. The gap between the return and investment also has its effect upon the present price situation. Thirdly, the kind of system of Government is liable to inflation. Restraint cannot be exercised in spending. Often it happens that claims have to be met mainly allocating funds. In the period of rising prices, the rich got richer and poor, poorer. The rich own the means of production. They pay the laborers handsomely. But they take of the left hand what they gave with right hand.The cost of goods swells up. The prices naturally go up. What his master gives him, the market takes. Rising prices encourage hoarding, profiteering, black –marketing and corruption. They discourage export. They cause devaluation of currency. Lastly, they seriously disrupt equitable distribution of wealth. The problem is very dangerous. It needs measures – short and long term, to be adopted. These measures include as appeal mixed up with threat to the sellers, raids on go downs and other hoards of grain, the seizing of black, the cut of Rs 400 crores in central expenditure, the ncrease in bank rates to 5 %, the opining of fair price shops, the rationing of provisions, the imports of food-grains from some foreign counties, the curbing of unproductive expenditure by the Government, the readjustment in the scale of pay and the emphasis on small plants. The short term measure will help the government to hold the price-line. The long term measures will help the government to withdraw the huge amount of money pumped into circulation during the last year. Corruption has also given rise to rising prices. Analyze the news In dia has been having this economic cycle for centuries.But the issue of price of goods has been rising in India had been considered just a while ago. In the past, this economic cycle started with the problem of its population. The inequality distribution of wealth makes the poor suffer from starving as they do not have money to buy food or clothes. On the other hand, the rich just kept taking advantage of whomever underneath them. Nowadays, India has been intervened by other countries that want to help to improve the quality of life of the poor in India. Due to the better quality living of the people, they seem to have more purchasing power than before.The growing population in India, is also the result of improving quality of life, is creating a shortage of consumption goods. Because the demand increase rapidly more than the supply of goods. The increasing of population also creates more corruptions between the government and the investors, because rising price guides them the ways of making more benefits. These all situations have just creating further problems continuously from the past. It seems like these problem would never end because if they cannot fix one spot on the cycle, the other spot would never be solved.

Analysis Of `` My Last Duchess And Carol Ann Duffy s ...

Several poems in the anthology explore the intensity of human emotion. Explore this theme, referring to these three poems in detail and by referencing at least three other poems from your wider reading.’ The potent emotion of jealous love permeates throughout both Robert Browning’s ‘My Last Duchess’ and Carol Ann Duffy’s ‘Medusa.’ Jealous love forms a central concern of the poets, with each one focusing on different aspects, which the reader may come to identify the poems as exploring the intensity of human emotion. The themes of both poems show the complete mental consumption of the voice’s. Their pre-dominative behaviour appears to emerge from perverted good values. The paranoid voice of a woman, angered with her supposed cheating husband runs throughout the duration of ‘Medusa,’ seeming to grow in anger as it meets every line. In addition, Carol Ann Duffy creates an extended metaphor of this women’s transformation into the monstrous character ‘Medusa,’ using members present in Greek mythology, in order to paint a metaphorical juxtaposition of a once beautiful woman, now a hideous ‘gorgon’ due to the impact of detrimental human emotion. Detrimental emotion being, as shown by the phrase: ‘My brides breath soured, stank,’ with the use of sensory imagery demonstrating how a slight ‘suspicion’ has taken hold of the voice. Moreover, this build-up and outpour of the slight ‘suspicion’ and emotion over the po em suggests that the voice has succumbed to and has allowed herself

An author of the Declaration of Independence - Free Essay Example

Sample details Pages: 7 Words: 2058 Downloads: 6 Date added: 2019/10/31 Category People Essay Level High school Tags: Thomas Jefferson Essay Did you like this example? On our third presidents gravestone, Thomas Jefferson is proclaimed as both an author of the Declaration of Independence and the father of the University of Virginia, yet there is nothing mentioned about his time as the highest political rank in American history. This is primarily due to the fact that Jeffersons presidential run was extremely underwhelming. Jefferson, known as one of the most profound figures in American history, was marked with one of the worst eras in American history during his presidency. Don’t waste time! Our writers will create an original "An author of the Declaration of Independence" essay for you Create order By the end of his second term, Jefferson was criticized heavily about how he lead the country and the future turmoil that was caused due to his actions as president. Jefferson had various issues during his time as president, but nearly all of them can be linked to three distinct problems present throughout his time as president. Although he faced many problems during his eight years as president, Thomas Jeffersons presidency ultimately failed because of his struggle to keep peace with foreign countries, his hindrance in the progression of the American economy, and his overly-high development of liberalism. One of Thomas Jeffersons most significant issues during his presidency were his issues with foreign relations. Modeling after George Washington during his farewell address, Jefferson believed in staying as neutral as possible in foreign affairs. However, this came to be more difficult than initially expected, as Britain continuously sought to impress American ships and sailors. In taking action, Jefferson believed in the Monroe-Pinkney treaty,1 in which he sent James Monroe and William Pinkney in order to resolve this issue. No treaty was signed, and the British impressment of American ships remained a prominent problem. In this matter, Jeffersons view on foreign relations proved to be unsuccessful as the British found no need to stop impressment as there was no opposing American threat present. Thomas Jefferson was in refusal to propose any significant threat to an opposing country. As seen in the Monroe-Pinkney Treaty, this caused us to become continuously disrespected by countries - England and France especially- and no legitimate response from our government. As stated by Dumas Malone in his book Jefferson The President: Second Term, Jefferson was far too optimistic when looking for resolution with France and England and thus was unsuccessful in the majority of his attempts to maintain the peace.2 In stating this, Malone implies that Jefferson was too absorbed in the ideology that restraining from foreign affairs was ideal, and thus caused more issues than before due to the belligerence of both Britain and France. Although he tried to adapt to these issues during his presidency, Jeffersons adaptation was poor at best. In 1807, Jefferson passed the Embargo Act,3 which prohibited American ships from trading in all ports. This proved to be Jeffersons biggest embarrassment and was disastrous, as it put the American colonies in a deep economic depression. Jeffersons belief was that in cutting off trading with British and French ports, their reliance on America would be emphasized and they would resolve their issues in order to maintain the flow of traded goods. However, this plan backfired, and evidently led to Britain and France finding other trade markets and causing Americans to take the toll for the act. Jeffersons outlook to avoid foreign affairs as much as possible eventually diminished the country and thus caused his presidency to be a significant disappointment. As mentioned by Malone, Jefferson had conducted his government from the beginning on the theory of peaceable coercion.4In saying this, Malone implies that Jefferson always had the vision of avoiding war, and thus would primarily tolerat e the pesterance of foreign countries through subtle threats that would maintain a form of peace. This was Jeffersons most ineffective approach to a problem, and caused severe damage to the progression of the country. Malone says that During Jeffersons presidency his attitude toward Great Britain and France varied directly with his hopes and fears, especially his fears, for the security and well-being of his own country.5Jefferson was confined to what the satisfaction of foreign countries in order to stay neutral in foreign relations and maintain the protection of his country, and therefore Although he attempted to reduce problems in foreign affairs through remaining neutral in all issues and avoiding war with foreign relations, Jeffersons way of handling those foreign issues was evidently extremely ineffective and increased the issues with foreign countries rather than finding any type of resolution. In Jeffersons struggle to facilitate peace with outside nations, America took a brutal toll and rather than feeling the safety which Jefferson sought, they ended up feeling both vulnerable and dependent on other nations. Although Jeffersons Embargo Act lead to be a profound economic problem for the country, it was his agrarian outlook on the country which caused the most significant economic problem. As stated in Jefferson and the Ordeal of Liberty, Jefferson believed that the plow was the most useful of the instruments known to man.6 In saying this, Jefferson stressed his sole belief that the agrarian society needed to be the principle basis of the economy. He believed in the fundamental rights of every man, and this was most widely expressed through his outlook on internal taxes. Jefferson believed in the elimination of internal taxes. However, this would just accumulate the problems prevalent in the country. As described by Joseph J Ellis in the American Sphinx, the elimination of internal taxes further reduced the public visibility of the federal government in the most sensitive area of public opinion, tax collection.10In saying this, Ellis depicts that in Jeffersons attempt to eliminate these t axes for the common people, he was causing a distortion for the people and deliberately masked the publics issue with the collection of taxes. Though his actions expressed support within the nation and were widely agreed upon as being beneficial to the country at the time, Jeffersons outlook for the countrys agrarian culture would be contemporary and would limit the countrys ability to thrive. Jeffersons outlook on the functionality of the countrys economy was extremely over optimistic and he became ignorant over the reality of Americas progression. As it was mentioned by Richard K. Matthews in The Radical Politics of Thomas Jefferson, he says, Jefferson perceives direct relationships between individual freedom, economic autonomy, and democratic community.7In stating this, Matthews implies how Jefferson implemented his beliefs of equality for the common man into his belief in the American economic system. Jefferson constantly subsidized the liberties of all men, yet was too reliant on his beliefs and consequently damaged the economy of the nation. In revolving his ideology of a successful economy around the belief in valuing the rights of all men, he shortchanged the progression in industrialist societies like the North. Though both important factors to represent as the president, there is little to no correlation between liberty and economy. Although it is essential to re present both as president, Jefferson did it in an ineffective manner and hurt the economic balance within the system of the nation. Additionally, one of Jeffersons greatest achievement during his presidency came in 1803, when he bought the Louisiana Purchase from Napoleon for $15 million, which is considered one of the greatest bargains in history. However, Ellis of the American Sphinx expresses that this was one of the most consequential actions in all of American history.7Although Jeffersons purchase of the mass of land was extremely exciting for the country and its future, it couldnt have come at a worst time. The country was already in a significant amount of debt, and Jeffersons Embargo Act would put them in one of their greatest economic depressions. Additionally, Napoleon had no motivation to settle his empire in the New World. Therefore it was a means of desperation on Napoleons part to use the money paid by America to supply more troops. After buying the Louisiana Purchase, Jefferson did nothing to enforce a push for westward expansion. To seize an empire, Ellis expressed, required an imperial president. 8What he means by this is that with the expansion of the Louisiana Territory, it was necessary to have a president who would utilize that expansion to fulfill the economic needs of the country. However, Jefferson did a minimal amount of execution and hurt the economy through his lack of action. Jefferson had the right ideologies in his actions during his presidency, but failed to execute his actions in a profound way that Although the Louisiana Purchase seemed like a good investment, Jeffersons utilization of the land made it a waste of money in a time where money was scarce. The third and final issue with the Jeffersonian belief in the future of the country was the overvalued ordeal of liberty. Richard K Matthews states that his unwavering faith in democracy and the ability of humanity to govern itself places him in the radical progressive tradition.9In saying this, Matthews implies that Jefferson takes the fundamental values of the liberties of the common man and applies that to his means of governing. However, he is inefficient in doing so and becomes too reliant on the people rather than a structured system of government. This can be expressed during his Inaugural Address, in which he said the infamous saying, We are all democrats. We are all Federalists.10Jefferson optimizes his belief in that the people can be self-governed, yet it came back to haunt him. He continuously failed in multiple attempts to express democracy for all and implement a self-governed nation into what it was during that era. Though his optimism in the countrys people and their ability to govern themselves gave a greater outlook on the country and its future, it ultimately had a negative effect on the country and was proven to be ineffective in the course of his presidency.Malone expresses in Jefferson and the Ordeal of Liberty that Jefferson held too high a belief in liberalism which evidently caused problems, one of the primary problem being the lack of security on the western border.11There were continuous complaints about Indian attacks and the lack of security for the people, but due to Jeffersons belief in a weak federal system, there was no availability to protect these people being attacked.12Although Jefferson was portrayed as representing the common man, his belief in distribution throughout the states proved to contradict himself as he was not able to provide basic needs through limited federal power. Additionally, his liberalist views are most significantly expressed through Jeffersons most famous document, the Declaration of Independence. Though not during his presidency, the Declaration of Independence modeled the same views and ideas expressed throughout Thomas Jeffersons presidency in order to sustain representation for all during his presidency. Though they are the founding documents of the country and were essential to the growth of the country, the potential of something occurring from the time the document was signed to the time of Jeffersons presidency could change significantly, and it is up to Thomas Jefferson and all other high officials to represent the law relative to the present time. However, Jeffersons modeling of liberty through the Declaration of Independence was an antecedent towards the development of the country. Lastly, Matthews says that Jefferson rejects the design of allowing a social structure and limiting human nature to provide stability .13In saying this, Matthews expresses how Jefferson constrained the rights of men in order to stabilize the country as a whole. This is another faulty belief of Jefferson as it expresses how his values of equity to all men are both hypocritical and unjust. Jefferson rejects the ideology of stabilization as he believes there is too much loss in that form of governing. However, people will not be able to exercise their rights and privileges without the stability and development of the nation as a whole. Therefore it is a negligent outlook to believe in something greater than the stability of the country. Jeffersons outlook and reliance on the belief of liberty proves to be problematic and overly weighted on the ideology of the rights for others. In summary, Jeffersons failure during his presidency election was primarily dependent on these three virtues. In no means are Jeffersons political viewpoints wrong, as both the Federalists and Democrats had an argumentative platform which many thought were accurate. However, the means in which Jefferson handled his presidency was the primary cause of issues during his eight years.