In class.

PUBLIC AND PRIVATE ACCOUNTANTS

The accounting profession in market economy consists …. (1) public and private accountants. Public accountants are independent professionals who provide services …. (2) a fee. Accountants who are employed …. (3) business firms are known as private accountants.

Some public accountants practise alone. Many have formed partnerships …. (4) other accountants, and a few have formed professional corpo­rations. Partnerships are the main form …. (5) business organization in the accounting profession. Public accountants try to avoid limited liability because they believe that professionals should take full responsibility …. (6) their judgements. The title certified public accountant refers to the holder of a license to practise public accounting. The license is granted …. (7) a state government. It should be stressed that the licence is granted to people who meet educational and experience requirements and pass an examination. All American certified public accountants are expected to keep their knowledge up …. (8) date and to maintain the highest standards of integrity, professional independence and confidentiality.

The main service of public accountants is auditing. Besides, public accounting firms offer consulting services, some accountants are also active …. (9) tax planning and preparation of tax returns.

And what about your private accountants? Accountants who work ….(10) US business firms have wide responsibilities. Their duties include cost accounting, capital budgeting, budgeting for current operations, tax planning, they must know how to design financial information systems, and do many other things.

Words you may need:

public accountant – частнопрактикующий бухгалтер

private accountant – бухгалтер, действующий в пределах одной фирмы

judgement – мнение, суждение

holder of a license – владелец \ держатель лицензии

to grant a license – предоставлять лицензию

state government – (зд.) правительство штата

to keep knowledge up to date – поддерживать знания на современном уровне

integrity – (зд.)высокая профессиональная репутация; честность

confidentiality – конфиденциальность

auditing – аудит

tax planning – планирование налогообложения

cost accounting – производственный учет

capital budgeting – составление смет капитальных расходов

budgeting for current operations – составление смет текущих расходов

financial information system – финансовая информационная система

Assignment 8. a) Fill each gap with a suitable word from the box.

b) Sum up the text in 5-7 sentences and present your

summary in class.

c) Name the most important events in the development of accountancy profession in the world.

accountants back number principles profession role organized creation organizations members throughout functions

ACCOUNTANCY PROFESSION

The organization of the accountancy profession dates _________(1) to January 1853 when eight accountants in Edinburgh, Scotland met for the purpose of seeking recognition of their __________(2) as a separate and distinct profession. Their discussion of their professional situation resulted in the ____________ (3) of the Institute of Chartered Accountants of Edinburgh. Since that time numerous professional accountancy organizations have been established ___________ (4) the world. The process is going on.

In 1977 the International Federation of Accountants (IFAC) was established. Its initial membership was 63 organizations representing 49 countries, but within a decade, the ____________ (5) grew to 105 organizations from 79 countries. The establishment of the IFAC recognized the need for international coordination of the objectives of professional accountancy organizations and means of achieving those objectives. Accountancy is an international profession. Under the conditions of global interdependence of countries through trade, finance, and crossborder investments, the _____________ (6) of the IFAC is becoming more important.

The size and principles of accountancy ___________ (7) vary. Some organizations comprise accountants working in commerce, industry, and government organizations, as well as in public practice (auditing), others consist solely of members in public practice.

The main ___________ (8) of the accountancy profession may be summarized as follows:

• to protect the public by ensuring the observance by its members of the highest _____________ (9) of professional and ethical conduct;

• to promote and increase the knowledge, skills, and proficiency of members of the organization and students;

• to preserve the professional independence of ____________ (10) in whatever capacities they may be serving;

• to maintain the legitimate rights of its _____________ (11).

IFAC was ____________ (12) in recognition of the growing changes

towards internationalization of the world economy, business and trade.

Words you may need:

Institute of Chartered Accountants – Институт дипломированных бухгалтеров

observance – соблюдение

conduct – поведение

proficiency – (зд.) опыт

preserve – сохранять

DISCUSSION

1. What is the role of accountancy in a free-market economy?

2. Who needs the information provided in financial statements?

3. How are accountants classified?

4. What services do public accountants offer to their clients?

5. What is done in our country to create a strong and respected professional body of accountants?

6. In what way does cash basis accounting differ from accounting on an accrual basis ?

UNIT 12. AUDITING

Assignment 1. Remember the meaning of the following words and word-combinations :

auditing auditor examine accounting records financial statements offer an opinion accuracy reliability audit build up account(s) audit auditor’s opinion credibility supervisory board government agency indepth audit report audit procedures manifold testing stage preliminary analytical review assumption complete figures proper period legal position misstatement (un)intentional seek evidence ultimate objective substantive test(ing) tests in totals materiality audit risk

аудит аудитор проверять, проводить ревизию документы учета финансовая отчетность сделать заключение (по результатам аудиторской проверки) точность достоверность, надежность n, аудит, ревизия ,аудиторская проверка; v, проводить аудиторскую проверку наращивать, накапливать аудит счетов, ревизия счетов аудиторское заключение достоверность наблюдательный совет ведомство, правительственная организация детальный аудиторский отчет методика проведения ревизии разнообразный, многосторонний стадия (этап) проверки предварительный анализ финансово-хозяйственной деятельности предположение, допущение, предпосылка полные данные надлежащий период юридический статус сообщение неверных сведений, искажение сведений (не)преднамеренный искать доказательства конечная цель независимая проверка проверка итоговых чисел “существенность” (искажения) риск некачественного контроля

critical magnitude omission	(зд.) решающий величина, размер пропуск
inherent risk detection risk approval of the financial statements deviation unqualified opinion qualify the opinion integrity certify the related statement of income	присущий (виду деятельности) риск риск (не) обнаружения подтверждение финансовой отчетности отклонение безусловное мнение (оценка, заключение) дать аудиторское заключение с оговорками профессиональная честность выдавать свидетельство соответствующий отчет о прибылях и убытках
comply with regulations in agreement with in compliance with relevant	соответствовать требованиям, правилам в соответствии с в соответствии с уместный, относящийся к делу

Assignment 2. Practice the pronunciation of the following words:

accountant-auditor, accuracy, environmental audits, significant amount of expertise, supervisory board, employee representative, audit procedure, audit process, final judgement, analysis of figures, reliability of financial information, although, materiality, misstatement, inappropriate opinion, qualify the opinion, deviation, sufficiently educated, adequately trained.

Assignment 3. Read and translate the text using a dictionary.

PERFORMING AN AUDIT

Auditing is a process in which an independent accountant-auditor examines a firm's accounting records and financial statements and offers an opinion on their accuracy and reliability.

There are different types of audits, for example, financial statements audits, income tax audits, "value for money" audits, environmental audits, administrative audits, financial management audits, etc.

The accountancy profession has built up a significant amount of expertise in performing financial statements audits.

Accounts audits were established as an instrument to protect third parties, the users of accounts, since the auditor's opinion helps establish credibility of financial statements.

Special bodies of users, such as supervisory boards, employee representatives, government agencies may sometimes need an indepth audit report, which is usually confidential.

It should be stressed that auditors do not monitor, they offer an opinion, and the audit process and audit procedures are complicated and manifold. The auditor's opinion is gradually being built up from a mass of detailed work to the final judgement through the planning and testing stages. The auditor normally starts with a study of the business environment the audited company is working in and performs a preliminary analytical review.

Then he should direct his attention to the financial statements. Interestingly enough, however, the auditor's attention is not directed towards the financial statements' elements as such, but towards the correctness of various assumptions made by the management for their preparation. For instance, the auditor needs to know if figures are complete and accurate and reflect what they should reflect, if income and expenses are recorded in the proper periods and if the legal position is reflected adequately.

The auditor should focus on any misstatement whether it is intentional or unintentional. The management is responsible for the reliability of financial information. If the management is not prepared to take the responsibility it may be hard to complete the audit. In such situations the auditor should seek his own evidence by means of independent audit procedures.

Although the financial statements are the ultimate objectives of an audit, normally such audits cannot be completed without a proper study and evaluation of the accounting system and assessment of the internal accounting controls.

Defining the audit strategy the auditor has to decide whether to rely on internal controls or to resort to substantive testing applying analytical review procedures, such as tests in totals, comparison with budgets or even statistical analysis of figures.

In the planning stage as well as during the performance of audit procedures and, finally, in forming conclusions, "materiality" and "audit risk" are critical elements in the auditor's judgement. "Materiality" refers to the magnitude or nature of a misstatement (including an omission) of financial information.

"Audit risk" (including three different components - inherent risk, control risk, detection risk) is the risk that an auditor may give an inappropriate opinion on financial information that is materially misstated.

The natural finalization of the audit process is the auditor's report, reflecting the auditor's opinion on the financial statements. Unfortunately, audits do not always end up in an approval of the financial statements. Any deviation from the unqualified opinion should be explained in the auditor's report, including the uncertainty or the disagreement that caused the auditor to qualify his opinion.

In order to protect the public interests and the profession's integrity an individual must be sufficiently educated and adequately trained before being certified to act as an auditor.

Below you will find a sample of an auditor's opinion:

To the Shareholders of ... Ltd.: We have audited the accompanying balance sheet of … Ltd. as of 31 December ... and the related statement of income for the year then ended. Our audit was conducted in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances to establish whether the balance sheet and related statement complied with Russian regulations and were in agreement with the underlying accounting records. In our opinion, the balance sheet and related statement of income of ... Ltd. referred to above have been prepared in compliance with the relevant Russian regulations and are in agreement with the underlying accounting records. Moscow, 24 March ...

Assignment 4. Find English equivalents to the following phrases in the text:

ревизия правильности начисления подоходного налога; аудит оптимального использования денежных средств; аудит счетов является инструментом защиты интересов пользователей финансовой отчетности; аудиторы не контролируют, они дают заключение; деловая среда, в которой работает проверяемая компания; аудиторы обращают свое внимание на правильность предположений руководства; преднамеренное или непреднамеренное искажение фактов; брать на себя ответственность за ; завершить аудиторскую проверку; прилагаемый балансовый отчет; проводилась в соответствии с общепринятыми стандартами аудита; соответственно; при данных обстоятельствах.

Assignment 5. Fill in the gaps with words and expressions from the text:

1) The process in which an independent accountant-auditor examines a firm’s

accounting records and offers an opinion on their accuracy is called _________ .

2) There are _________ _________ ________ such as financial statements audits,

income tax audits, administrative audits, financial management audits, etc.

3) In order to perform financial statements audit you should have a significant

amount of __________ in accountancy.

4) Auditors do not monitor, they _________ _________ , and the audit process and

procedures are complicated and manifold.

5) The auditor normally starts with a study of __________ ___________ in which

the audited company is working.

6) In financial statements audit the auditor needs to know if the figures are _______

__________ and if __________ _________ are recorded in the proper periods.

7) The management of the audited company is responsible for ____________ of

financial information.

8) __________ ___________ is the risk that an auditor may give an inappropriate

opinion on financial information that is materially misstated.

9) The final stage of the audit process is the auditor’s report, reflecting the auditor’s

opinion on ___________ ___________ .

10) Unfortunately, audits do not always end up in ____________ ___________

_________ .

11) An individual must be sufficiently educated and __________ ____________

before being certified to act as an auditor.

Assignment 6. Using the text match the verbs from A with the nouns from B and use them in your own sentences:

A B

1) to examine a) a preliminary analytical review

2) to offer b) one’s own evidence

3) to start with c) auditor’s opinion

4) to perform d) an opinion

5) to focus on e) internal control

6) to seek f) a firm’s accounting records

7) to study and evaluate g) any misstatement

8) to rely on h) the study of business environment

9) to reflect i) the public interests

10) to protect j) the accounting system

Assignment 7. Answer the questions on the text:

1. What is auditing?

2. What audits are practised nowadays?

3. What does the auditor’s opinion help establish?

4. How is an audit planned?

5. What do auditors normally start with?

6. What do auditors direct their attention to when they analyze financial statements?

7. What responsibilities do managers (directors) undertake with regard to the audit?

8. What are the responsibilities of auditors?

9. Do auditors study and evaluate the accounting system and the internal accounting control during the audit? Do they rely on internal controls?

10) What are the most critical elements in the auditor’s judgement?

11) Do all audits end up in the approval of the financial statements? Why do

auditors sometimes qualify their opinions?

12) Who has the right to act as an auditor?

13) What audit was conducted by the auditors whose opinion is stated in the

sample?

Assignment 8. a) a) Fill each gap with a suitable word from the box.

b) Sum up the text in 5-7 sentences and present your

summary in class.

c) Name the most important facts about auditing in the United Kingdom of Great Britain and Northern Ireland.

consultancy financial position foreign currency opinion throughout examines tax returns independent certificate

AUDITING IN THE UK

In most industrialized countries audit is a statutory requirement applying to limited companies. There are hundreds of auditing firms in every big city now.

In the UK the auditor is responsible for ensuring that the accounts show a ‘true and fair’ view of business’s ___________ (1) and performance. Auditing is a process in which an independent accountant ___________ (2) a firm’s records, analyses financial statements and offers an __________ (3) on their accuracy and reliability. If the auditor doesn’t find faults he confirms the Balance Sheet and the Profit and Loss Account.

The auditors, as a rule, are charted public accountants, too. Besides, they are very active in ___________ (4) . They offer a very wide range of consultancy services. They help their clients to prepare ____________ (5), give advice on the maintenance of accounting and organization of internal control, give advice on how to set up business, how to improve an enterprise management, explain to their clients rules for performing foreign trade transactions and __________ (6) operations.

In the UK auditors play their proper part in the national economic development and must be ____________ (7) of pressures not only from clients but also from government and state agencies. An independent, effective and efficient profession requires a strong institutional infrastructure. Audit chambers have been set up ___________ (8) the country.

Standards of education in this field are really very high. Every charted accountant undergoes several years of intensive professional training culminating in examinations of a very high standard. Even then, further experience and study are required to obtain a practicing ____________ (9).

Examinations cover a very wide range of subjects including auditing, analysis and critical assessment of annual accounts, general accounting, consolidated accounts, cost and management accounting, internal audit, legal and professional standards relating to statutory auditing, company law, employment law, basic principles of financial management, etc. It’s not surprising that British accountants and auditors are respected the world over.

DISCUSSION

1. What is auditing? What is the aim of audits?

2. Do auditors perform a useful service to the community?

3. Is it difficult to become a practising auditor? Are professional qualifications high?

4. What do professional audit organizations do for auditor?

5. Do many young people want to make a career in auditing? Why?

Texts to be translated in writing

FINANCIAL STATEMENTS AND THEIR ELEMENTS

A. BALANCE SHEET

The position of the enterprise is presented in the balance sheet. That statement shows resources and provides an indication of the financial strength of the enterprise.

The balance sheet includes the following elements:

ASSETS

Assets include property, plant and equipment, financial leases, investments in subsidiaries and other enterprises; long-term receivables; purchased goodwill, patents, trade marks and similar intangibles; marketable securities; current receivables (or trade debts); cash and bank balances; and prepaid expenses.

Assets arise from past events, which may be cash or non-cash transactions. Assets may be purchased, exchanged for other assets, self-generated or received as grants or donations.

An asset is recognized when it is reasonably certain that the future economic benefit embodied in it will flow to the enterprise.

In a number of countries, intangible assets such as concessions, patents, licences, trade marks and similar rights and assets may be recognized in the balance sheet only if they were acquired for a valuable consideration. A number of countries allow assets to be carried on the balance sheet only if the reporting enterprise is the legal owner.

Words you may need:

long-term receivables – долгосрочные дебиторы

goodwill – престиж фирмы

intangibles – нематериальные активы

current receivables – текущие дебиторы

concession – концессия

valuable consideration – достаточное встречное удовлетворение

LIABILITIES

Liabilities include long-term loans and debentures, short-term loans, bank overdrafts, payables, pension plans and similar financial obligations. The scope of definition of liabilities cover obligations whose financial amounts can or cannot be established precisely. It therefore covers what is usually described as provisions in some countries. Provisions are liabilities, the amount of which cannot be established precisely, or the occurrence of which is uncertain. In some countries, provisions may not be used to adjust the value of assets. In those countries, value adjustments on debtors are referred to as write-downs. In other countries, write-downs on debtors are commonly referred to as provisions. Provisions should be distinguished from reserves, which are amounts set aside under equity for future use with respect to obligations which may arise from probable or possible events.

A liability is recognized when it is reasonably certain that a future reduction in economic benefit will result from the settlement of the obligation.

Words you may need:

debenture – долговое обязательство, долговая расписка, дебентура

bank overdraft – задолженность банку; овердрафт

payable – кредиторская задолженность

provision – ассигнования; резерв

to adjust – регулировать, приводить в соответствие; уточнять; исправлять

value – стоимость, цена

write-down – частичное списание

equity – собственный капитал, собственные средства; ценные бумаги

with respect to – (зд.) с учетом ч-л

EQUITY

Paid-in capital is treated differently in many countries, in some of which all amounts paid in by equity shareholders are classified as pain-in and are not further categorized. In other countries, paid-in capital is divisible into two types: that relating to the par value of the shares offered for sale and that relating to share premium or additional capital. In consolidated balance sheets, the amount of equity should be given separately fro the shareholders of the parent enterprise and for other shareholders.

Equity is a residual arising from the deduction of liabilities from the assets of the reporting enterprise. Equity arises from two sources: that provided by shareholders (for example, paid-in capital) and that generated by the activities of the enterprise (for example, earnings less distributions to shareholders, unrealized surpluses).

Words you may need:

paid-in capital – оплаченный капитал, оплаченная часть акционерного капитала

shareholder – акционер

relating to – относящийся к ч-л, касающийся ч-л

par value – номинальная стоимость, паритет, номинал

share – акция

premium – приплата к номинальной стоимости, надбавка

residual – остаток

deduction – вычет; снижение, сокращение

unrealized surplus – излишек, остаток

B. INCOME STATEMENT / PROFIT AND LOSS STATEMENT

The income statement, or profit and loss statement measures the performance of an enterprise. The bottom line of this statement is the net result of the operations of the enterprise in the reporting period. It reveals the change during the period in the equity of the enterprise resulting from its operations.

Revenues

Revenues are inflows or enhancements of assets (or deduction of liabilities) that arise in the course of the normal activities of the enterprise.

The events that result in revenues and revenues themselves are referred to by a variety of names: including sales, fees, interest, dividends, royalties and rent.

Words you may need:

net result – конечный результат

in the reporting period – за отчетный период

enhancement – прирост, увеличение

fee – плата

royalty – 1. плата за право разработки недр 2. арендная плата 3. пошлина

Expenses

Expenses are outflows or depletions of asserts (or additions to liabilities) that arise in the course of enterprise’s normal activities.

The events from which expenses arise and expenses themselves are referred to by a variety of names, including cost of sales, wages and depreciation.

An expense is recognized when it is realized that an expenditure does not produce any future economic benefits. It is also recognized when a liability is incurred without the recognition of an assert. When it is possible to do so, expenses are recognized in the income statement on the basis of direct association between expenses incurred and the earnings of specific items of income. The process is commonly referred to as matching of expenses with revenues.

Words you may need:

depletion – уменьшение стоимости

cost of sales – себестоимость реализованной продукции

depreciation – 1. обесценивание 2. скидка на порчу товара (при расчетах)

to incur – нести, терпеть (расходы, убытки)

matching – 1. приведение в соответствие 2. балансирование активов и пассивов

Gains and losses

Gains are increases in equity that result from transactions that are incidental to the enterprise’s activities and from other transactions, events or circumstances affecting the enterprise during a period, except those that result in revenues or equity contributions.

Losses are decreases in equity that result from transactions that are incidental to the enterprise’s activities and from other transactions, events or circumstances affecting the enterprise during a period, except those that result in expenses or distributions of equity.

Gains are normally recognized when realized. Losses are normally recognized when realized or when it becomes evident that there is an impairment in the value of the assert, or an increase in the liabilities, to which the losses relate.

Words you may need:

gains – доходы, прибыль

losses – убытки

result from – вытекать (из)

result in – иметь следствием, приводить (к)

impairment – уменьшение, сокращение

Based on : Objectives and Concepts

Underlying Financial Statements,

ISAR*, 1989

• ISAR – International Standards of Accounting and Reporting

CONTENTS

UNIT 1. What is economics? ………………………………… 1

UNIT 2. What is economic all about? …………………………………. 7

UNIT 3. Why study economics? …………………………………. 13

UNIT 4. Economic literacy is akin to speaking a foreign language ………. 18

UNIT 5. Questions all economies face …………………………………. 25

UNIT 6. Adam Smith: a student and a lecturer ……………………………. 33

UNIT 7. Management. Main resources …………………………………… 40

UNIT 8. Levels and areas of management ……………………………….. 45

UNIT 9. Taxation …………………………………………………………. 53

UNIT 10. Indirect taxes (excise duties and VAT) …………………………. 58

UNIT 11. Accounting ……………………………………………………. 63

UNIT 12. Auditing ……………………………………………………. . 69

СПИСОК ИСПОЛЬЗОВАННЫХ ИСТОЧНИКОВ:

1. Халилова Л.А. Учебник английского языка для студентов экономических

специальностей. Москва, Форум-инфра М, 2005г.

2. Любимцева С.Н., Коренева В.Н. Курс английского языка для финансистов.

Москва, ГИС, 2001г.

3. Рыжков В.Д. Менеджмент. Деловой английский язык. Калининград, 2002

4. Graham Tullis, Tonya Trappe Management. Markerting., Longman, 2003

Федеральное агентство по образованию

Государственное образовательное учреждение высшего

профессионального образования

«УФИМСКИЙ ГОСУДАРСТВЕННЫЙ НЕФТЯНОЙ

ТЕХНИЧЕСКИЙ УНИВЕРСИТЕТ»

Кафедра иностранного языка

УЧЕБНО-МЕТОДИЧЕСКОЕ ПОСОБИЕ

по английскому языку

для аудиторных занятий

со студентами II курса экономических специальностей

Уфа 2008

Данное учебно-методическое пособие предназначено для занятий со студентами II курса всех экономических специальностей дневной и вечерней форм обучения. Оно представляет собой комплекс текстов с заданиями по различным аспектам экономики, подобранных из оригинальных английских и американских источников, и может быть использовано как для аудиторной, так и для внеаудиторной работы.

Цель учебно-методического пособия – сформировать у студентов навык чтения и понимания литературы по специальности на английском языке, умения извлекать необходимую информацию из текстов, обсуждать затронутые в них темы. Кроме того, пособие готовит студентов к сдаче итогового экзамена по английскому языке, поскольку помимо традиционных заданий к текстам оно содержит задания в тестовой форме на закрепление лексического материала, а также задания на письменный перевод.

Составители: Варламова В.Н., ст. преподаватель

Хильшер Г.Н., ст. преподаватель

Рецензент Павлюченко Е.А., ст. преподаватель

© Уфимский государственный нефтяной технический университет, 2008

РЕЦЕНЗИЯ

на учебно-методическое пособие по английскому языку для

аудиторных занятий со студентами II курса экономических специальностей.

Составители: Варламова В.Н., ст.преп., Хильшер Г.Н., ст. преп.

кафедры иностранных языков УГНТУ

Данное учебно-методическое пособие предназначено для занятий со студентами 2 курса ИНЭК в 3-4 семестрах. Оно может быть использовано как для аудиторной, так и для самостоятельной работы студентов.

Целью пособия является развитие навыков различных видов чтения с выходом в устную и письменную речь, расширение словарного запаса по специальности, ведение дискуссии по различным проблемам экономики на английском языке а также подготовка к сдаче итогового экзамена по английскому языку.

Пособие состоит из 12 уроков, посвященных различным темам, связанным с деятельностью экономистов. В каждом уроке дается тематический словарь, текст, вопросы проблемного характера на обсуждение содержания текста, лексические упражнения, задания в тестовой форме на закрепление лексики специальности, а также задания для дискуссий. Кроме того, пособие содержит тексты, предназначенные для письменного перевода со словарем.

Пособие рекомендуется к внутривузовскому изданию.

Рецензент Павлюченко Е.А.

Старший преподаватель

кафедры иностранных языков УГНТУ

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