Английский язык = English. Учебное пособие-1

accounting statements adhere to certain standard formats and are prepared according to generally accepted accounting principles (GAAP)* that have been established and agreed on by the accounting profession over many years.

Management accounting, in contrast, is tailored to the needs of managers in a particular company. Its overall purpose is to help the managers evaluate results and make informed decisions. The employees of a typical firm’s accounting department perform many functions. One of their biggest jobs is financial planning, which involves forecasting sales, costs, expenses and profits. These forecasts enable management to spot problems and opportunities and to allocate resources intelligently. Part of the process includes developing a budget, a financial blueprint for a given period that structures financial plans in a framework of estimated revenues, expenses, and cash flows.

In addition to preparing a budget, company accountants are involved in analyzing production costs so that management will know what the company spends to produce a given product. Management uses this information to control expenses and to make pricing and product decisions [23, p. 482].

*GAAP – generally accepted accounting principles

Exercise 1. Complete the following phrases using the words from text А.

1.Business uses accounting to...

2.Accounting helps managers...

3.To evaluate a company’s performance it is possible to...

4.The accounting information is summarized in...

5.Two distinct sides of accounting are...

6.Financial accounting is...

7.Management accounting deals with...

8.Government agencies are interested in...

9.Financial accounting statements are prepared according to...

10.Financial planning involves...

11.Company accountants are responsible for...

12.Accounting information is used to....

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Exercise 2. Fill in the blanks with the words in the box.

Statements, business, needs, perform, costs, formats, sales, profits, expenses, accounting, decisions, company, product, management, principles, pricing.

1. Accounting summarizes information in ... that evaluate a company’s past, present and future.

2. ... uses accounting for measuring its financial performance.

3.Financial accounting statements adhere to certain standard...

4.Management accounting is designed to the ... of managers in a particular company.

5.The employees of a typical firm’s accounting department

... many functions.

6.Forecasting ..., costs, expenses and ... is the task of financial planning.

7.The purpose of ... is to help the managers evaluate results and make informed...

8.Analyzing production ... is a job of a ... accountant.

9.To control ... and to make ... decisions ... uses accounting information.

10.Generally accepted accounting ... are used over many years.

Exercise 3. Find definitions to the following using text А.

Exercise 4. Answer the following questions.

1.What does business use accounting for?

2.How is company’s performance evaluated?

3.Why is accounting important to business?

4.Who is interested in accounting information?

5.Who are outsiders?

6.What kind of information do the users need?

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7.Where do the accountants perform their functions?

8.How does the management know what the company spends to produce a product?

Exercise 5. Insert prepositions where necessary.

1.Accounting is important ... business ... two reasons.

2.Financial accounting statements adhere ... certain standard formats.

3.Financial accounting is concerned ... preparing information ... the outside world.

4.Government agencies are interested ... regulating the business and ... collecting taxes.

5.Part ... the process includes developing a budget, a financial blueprint ... a given period that structures financial plans ...

a framework of estimated revenues, expenses, and cash flows.

Exercise 6. Find the sentences in text A which say how financial accounting statements are made.

Exercise 7. Describe the generally accepted accounting principles.

Exercise 8. Copy the definitions of the areas of accounting into your notebooks. Learn them.

II. Read Text B and answer the questions.

1.What is an audit?

2.Who can work as an accountant?

3.Why do some public accounting firms offer management advisory services?

4.How is financial data checked by the controller?

TEXT B

Types of Accountants

Accountants can be divided into two basic groups: public accountants and private or corporate accountants. Public accountants operate independent of the business, individuals,

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and other organizations they serve. They prepare financial statements and report on the fairness of such statements, often performing an audit to evaluate the accuracy. Their reports indicate whether the statements have been prepared in agreement with GAAP, and their detached position obligates them to be objective and, if necessary, critical. Public accountants who meet state’s requirements for education and experience and pass an examination become certified public accountants (CPAS). About half of all CPAS are in private practice, working in one of the 30000-plus accounting firms in the United States. The industry is dominated by the “Big Eight” firms that together audit over 95 percent of all Fortune 500 companies. Some public accounting firms have recently been in the news because they issued financial statements indicating that an audited company had a sound financial position just prior to that firm’s collapse. As company mergers provide public accounting firms with a shrinking pool of clients, some have begun offering management advisory services (MAS) to small and mid-size businesses.

Private accountants (also called corporate accountants) are employed by a business, government agency, or non-profit organizations to supervise the accounting system and book-keep- ing staff. Although many private accountants are CPAS, they may also be certified management accountants (CMAS), which is a comparatively new designation indicating that they have passed a test comparable in difficulty to the CPA exam. The job of the in-house accounting staff ranges from routine bookkeeping to the high-level decision making of the controller (or financial vice-president), the firm highest-ranking financial officer. The controller of a medium or large corporation monitors and cross-checks all financial data, usually with the help of a computer, in order to evaluate the company’s financial health at any given point. The controller also supervises the preparation of financial analyses, budgets, forecasts, internal audits, and tax returns [23, pp. 484–486].

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Exercise 1. Give the summaries of Texts A and B. Make use of the following phrases.

1.According to the text...

2.The difference between ... and that of...

3.It should be mentioned that...

4.The principal fact is that...

5.With regard to...

6.One might say...

7.In other words...

8.The most valuable characteristic of...

9.Much attention is given to...

10. In conclusion...

III. Read Text C, entitle it and answer the questions.

1.What does the department intend to provide the students with?

2.What is included in the curriculum?

3.What does Clarke offer to its students besides professional training?

TEXT C

Accounting/Business Administration Department offers majors in accounting, business administration, finance, international business and marketing leading to a Bachelor of Arts degree. The curricula prepare the students to enter corporate enterprises, small businesses, not-for-profit organizations or graduate programs in business.

The program of study is based on a solid foundation in the liberal arts to provide the student with thinking, writing, communicating, and human and value judgement skills. The goal of the department is to develop the student’s critical analytical, problem-solving, and quantitative decision-making capabilities through a solid grounding in modern business and economic theory. It is the intention of the department to expose

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the student to the leading edge of the theoretical field while emphasizing the importance of human relationships and the ability to form sound ethical and moral decisions. In addition to providing professional training, the department focuses on the application of fundamental principles to a wide variety of organizational situations. In short, the program intends to equip the student for life-long learning.

The liberal arts and sciences are the foundation of the curriculum at Clarke. Most of the faculty in the department have undergraduate degrees in the liberal arts and sciences, and faculty advisors work with students to help them select courses in the area programs that will widen their horizons and add new dimensions to their lives. Many employers are looking for welleducated persons who can contribute in more than one area rather than technocrats whose expertise is confined to one speciality [www.clarke.edu].

Notes:

graduate programs – программы для магистрантов и аспирантов liberal arts – гуманитарные науки

curriculum – учебная программа

faculty – профессорско-преподавательский состав (Am. E.)

IV. Translate Text D in writing.

TEXT D

Organizational Environment

Who manages the accounting functions in organizations? In most corporate organizations, the controller is the chief accounting officer. Recognizing the importance of this function, many organizations place the controller in the same organization rank as corporate vice-presidents. In other organizations, the controller and the treasurer may both report to a financial vice-presi- dent, who is responsible for both accounting and financial affairs

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of the corporation. (The activity that we call “managerial accounting” is known as “finance” in many organizations).

Controller

As the chief accounting officer, the controller has authority both for accounting with the organization and for external reporting. Internally, the controller oversees providing information to managers. If you have a career in marketing, production, or general management, then you will have a lot of dealings with controllers. The controller usually oversees the company’s internal control system.

External reports include reports to taxing authorities and regulatory bodies such as Securities and Exchange Commission, as well as the financial statements for shareholders. The controller sometimes supervises data-processing operations, but frequently data-processing is an independent department. The noted management author Peter Drucker recommends that companies bring together their computer-based data-process- ing and accounting systems in the future.

Internal Audit

The internal audit department provides a variety of auditing and consulting services in many organizations, including auditing internal controls and assisting external auditors in their audit of an organization’s external financial reports. In some organizations, internal auditors are internal consultants who provide an independent perspective on managers’ problems. Such auditors are called operational auditors.

The internal audit manager sometimes reports directly to the controller. Some companies recognize the possibility of conflicts between the controller’s record-keeping role and the audit function, however, so they have the internal audit supervisor report directly to the controller’s superior. In addition, top management usually gives the internal audit director authority to communicate directly to the audit committee of the board of directors.

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Treasurer

The corporate treasurer is the manager in charge of raising cash for operations and managing cash and near-cash assets. The treasurer handles credit reviews and sets policy for collecting receivables. The treasurer normally handles relations with banks and other lending or financing sources, including public issues of shares or debt [20, pp. 9, 11].

KEY TERMS EXERCISES

Exercise 1. Match the words on the left with the definitions on the right.

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Exercise 2. Choose the correct answer.

1.Which type of accounting is concerned with providing information for internal use?

a)financial accounting;

b)management accounting;

c)public accounting;

d)certified accounting.

2.Suppliers, banks and other lenders are most interested in accounting records to determine a company’s ...

a)creditworthiness;

b)potential;

c)taxes;

d)market.

3.The person in charge of virtually every aspect of a company’s financial affairs is the ...

a)book-keeper;

b)private accountant;

c)certified public accountant;

d)certified management accountant;

e)controller.

4.The aim of the programme of study is ...

a)to provide the student with various skills;

b)to equip the student for learning liberal arts only;

c)to provide the student with employers;

d)to focus on the application of fundamental principles to a variety of situations;

e)to add new dimensions to students’ lives.

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ORAL SPEECH SECTION

Exercise 1. Read the illustrative dialogue and decide why the company’s profits decreased.

Illustrative dialogue

The Managing Director of Primrose is explaining the situation to the new accountant.

Accountant: So you’re a subsidiary of the Primrose Group which is based in Birmingham?

Managing Director: That’s right. We’re a public company and our shares are quoted on the London Stock Exchange.

Accountant: You must be doing well. I see the management accounts show a 20 per cent increase in turnover!

Managing Director: That’s true but we also had a fall in our net profit.

Accountant: Oh, I see. Can you explain how that happened? Managing Director: I’m not sure. You see, despite the reces-

sion our sales to Eastern Europe increased. Accountant: So income from sales should have risen.

Managing Director: Yes, but we only increased sales by lowering the price of our main product. So our gross margin fell from 31 per cent to 14 per cent of sales.

Accountant: So your income from sales increased but your profits decreased!

Managing Director: I know. We hoped to make them rise by increasing sales of other products and maintaining our overall gross margin. But we had to absorb a price increase by one of our suppliers and this reduced our gross margin on our other products by 2 per cent. Now our net profit has fallen... [22, p. 108]

Notes:

gross margin (gross profit) – валовая прибыль net profit – чистая прибыль

overall – полный

Exercise 2. Give short answers to these questions as in models.

Model 1: Who deals with tax audit? –An auditor does.

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