4.Complete the following statements:

1. Notes payable account is opposite _____ .

2. The claim that the owner has on the assets of the business is called_____.

3. Capital account shows _____ .

4. The balance of capital account equals _____ .

5. The increase in owner’s equity from delivering goods or services to customers____ .

6. The cost of operating a business is called_____.

Unit 11

1. Memorize the following words and word combinations:

auditing - аудит, аудит

to involve - вовлекать, залучати

evaluation - оценка, оцінка, визначення вартості

financial record - финансовый отчет, фінансовий звіт

irregularity - отклонение от нормы, відхилення від норми

internal audit - внутренний аудит, внутрішній аудит

misappropriation - растрата, незаконне привласнення, розтрата

to be consistent - согласующийся, узгоджуватися

installing - установка, установлення

operating procedures - методы работы, методи роботи

fiscal affairs - фискальные вопросы, фіскальні питання

deviation - отклонение, відхилення

standard operating procedure – стандартная методика, стандартна

методика

to seek - стремиться, намагатися

sole - единственный, єдиний

2. Read and translate the text: auditing

Auditing is an accounting function that involves the review and eval­uation of financial records. It is done by someone other than the per­son who entered the transactions in the records. Not so many years ago, the presence of an auditor suggested that a company was having finan­cial difficulties or that irregularities had been discovered in the records. Currently, however, outside audits are a normal and regular part of busi­ness practice. In addition, many corporations, especially the larger ones with complex operations, maintain a continuous internal audit by their own accounting departments.

Even those companies that do not conduct an internal audit need to maintain a system of internal control. Most good systems will provide accounting controls against errors, as well as a division of duties to re­duce the possibility of misappropriations.

Ideally, a business should use as many internal controls as are con­sistent with efficient operation. In practice, the cost of installing and maintaining control systems forces management to decide which con­trol devices to use. If there are too many controls, a time may come when the company's employees are spending more time filling out forms than performing productive work.

As we noted above, many companies employ their own accountants to maintain an internal audit. They continuously review operating pro­cedures and financial records and report to management on the current state of the company's fiscal affairs. These accountants also report on any deviations from standard operating procedures; that is, the company's established methods for carrying on its operating and recording func­tions. The internal auditors also make suggestions to management for improvements in the standard operating procedures. Finally, they check the accounting records in regard to completeness and accuracy, making sure that all irregularities are corrected. Overall, the internal auditors seek to ensure that the various departments of the company follow the pol­icies and procedures established by management.

The emphasis placed on different parts of the internal auditor's report varies from company to company. In some organizations, the auditor's major or even sole function is to report on the completeness and accu­racy of the books of account, as the financial records are known collec­tively. In more progressive companies, greater attention may be paid to the auditor's suggestions. In this case, instead of dealing primarily with the accounting and financial aspects of the business, the auditor also deals with operations such as marketing, production, and purchasing.