Tài liệu tham khảo: Tài liệu bổ trợ môn tiếng anh chuyên ngành kế toán - Ngô Thị Hạnh Quyên, Phan Lê Vĩnh Thông

TOPIC-BASED PRACTICE EXERCISES

Developing Global Professionals

1.1 Choose the correct word/phrase for each definition/explanation

1 preparing a person's or company's financial information in order to calculate the proportion of their profit which they must pay to their government

A insolvency B tax accounting C net income D accounts receivable

2 checking an organization's activities or performance or examining a person's or organization's accounts to make sure that they are true and honest

A auditing B accounts payable C coaching D relationship skill

3 a situation in which a person or a company does not have enough money or assets to pay their debts

A employee appraisal B creditor C tax accounting D insolvency

4 the ability to move easily from one place to another

A capital market B profession C mobility D accountancy

5 connected with or controlled by a group or organization

1.2 Match the words/phrases in the box with their definitions There are THREE extra words adoption appraising barrier forensic accounting bookkeeping mobility inward investment forensic accounting

1 something that prevents something else from happening or makes it more difficult

2 money that is invested in a particular country from outside it

3 when a company's financial records are officially checked in order to find out if there has been any illegal activity

4 estimating the value, condition, quality, etc of someone or something after a careful examination

5 the process of starting to use a new method, system, law

1.3 Use the correct words /phrases in the box to complete the gaps affiliated insolvencies aid forensic inexhaustible

1 She hired an expert in accounting to find out whether her ex-husband is hiding some of his wealth

2 A/An retailer bought the product at the official prices

3 Analysts are predicting that corporate and personal could start rising next year

4 There is a nearly supply of people willing to buy those homes

5 The government has already appealed for 800,000 tonnes of food to feed its starving population

2.1 Complete the gaps with the correct words/phrases in the box There are four extra words that you do not need goodwill financial accounting organizations accountancy bookkeeping internal audit tangible assets auditing accounting management accounting transactions recording

Accounting encompasses recording, classifying, and summarizing an organization's financial transactions, including purchases and sales, to report them as financial statements In various countries, the accounting profession is regulated by professional organizations that establish training, examination systems, and ethical and technical guidelines to ensure adherence to accepted accounting practices.

_ (5) is the day-to-day recording of transactions

_ (6) includes bookkeeping, and preparing financial statements for shareholders and creditors - people or _ (7) who have lent money to a company

_ (8) involves the use of accounting data by managers, for making plans and decisions

(Professional in use Finance, Ian MacKenzie, Cambridge University Press)

2.2 Read the passage and choose the correct words/phrases to complete the gaps

The traditional view of _ (1) as merely 'bean counters' is slowly becoming a thing of the past For centuries, accountants have been employed to report on the numbers They have sat there in their little corner, surrounded by stacks of paper and computer printouts, and have told us whether or not we have made _ (2) But more and more, accountants are finding that _ (3) doesn't need them to report on the numbers With today's technology, management already has access to software programs which do this work for them

So what will the future accountant do? According to Mr Hamilton-Smythe, the Managing Director of KHZ Enterprises, the large _ (4) manufacturing company, accountants will be employed "to help companies change the numbers Their expertise, and knowledge of the business will be called upon to prepare _ (5) They will become consultants and advisers And their skills will need to change

8 accordingly They will be _ (6) in international meetings, giving presentations, running international teams, writing reports, and making decisions."

This is going to require a significant change in the general public's opinion of accountants, who in turn will need to develop skills not traditionally _ (7) with the job The image of the guy in the corner with the stacks of paper will change to one of a high flyer, someone who is to the success of the _ (8)

3.1 Read the following passage and answer the questions

I am currently looking for an opportunity to use the accounting skills I learnt in my college I have recently completed a 16-week part-time accounting course (AAT Level 2 Certificate) The course covered book-keeping, recording income and receipts and basic costing We used a wide range of computer packages, and I picked up the accounting skills easily I was able to work alone with very little extra help I passed the course with merit

I believe my success was due to my thorough work, my numeracy skills and my attention to detail During the course, I had experience of working to deadlines and working under pressure Although this was sometimes stressful, I always completed my work on time Unfortunately, the course did not include a work placement, so I have not practised my skills in a business setting, and I am now looking for an opportunity to do so I am particularly looking for a job in a small company such as yours, as I believe I will be able

9 to interact with a wider range of people, and as a result, learn more skills I would like to progress within a company and gain more responsibilities over the years

Although I do not have work experience in finance, I have experience in working in an office environment Before starting the accounting course, I worked for 6 months in a recruitment office as a receptionist My duties involved meeting and greeting clients and visitors, taking phone calls, audio and copy typing and checking stock I also had to keep the petty cash and mail records Through this work, I developed my verbal and written communication skills I had to speak confidently to strangers and deliver clear messages

I enjoyed working in a team environment I believe the office appreciated my friendly manner and efficient work

(https://www.examenglish.com/B1/b1_reading_job_application.htm)

1 What is the writer’s job at the moment?

2 What is true about the writer?

3 Where the writer is applying for a job

4 How much time did he spend on learning accounting?

5 Which skills did he NOT gain from the accounting course?

3.2 Read this email on creative accounting, and then circle if the statements below are true [T]or false [F]

From: Rupert Greene r.greene@intep.de

To: Javier Estrada j.estrada@intep.es>

At our meeting yesterday you asked me to send you some background info on creative accounting, and in particular off-balance-sheet accounting

Basically there's quite a bit of flexibility in the way we can interpret the standards and principles of accounting For example, we may want to report bigger profits so that we can attract investors on the capital markets On the other hand, smaller profits may be better so that we pay less tax The problem is that the line between truthful and misleading representation of figures is sometimes very thin, and this is where people get into trouble

Off-balance-sheet accounting is seen by some as one type of creative accounting

Financial reporting for legitimate business transactions can vary significantly, including the treatment of lease arrangements Leasing an asset allows businesses to avoid reporting lease liabilities on their balance sheets, potentially providing financial flexibility The choice of accounting method depends on specific lease terms and the interpretation of financial reporting standards.

Hope this helps - give me a call if you have any more questions

1 Accountants agree that creative accounting is a good thing T/F

2 Creative accounting is sometimes used to try and attract more investors T/F

3 Accountants are allowed some flexibility in the way they present accounts T/F

4 Big profits mean paying less tax T/F

5.When a company leases an asset, the accountant doesn't have to include it in the accounts T/F

Translate the following sentences into Vietnamese

1 Accountants need to deal with clients, so it is important for them to have relationship skills as well as technical ones

2 To support its members, IFAC sets very broad standards for education programs, including continuing professional education and lifelong learning

3 The company was suspected of being dishonest in its financial reporting, so the forensic accountants were called in to investigate its dealings

4 Accountants need to develop employee appraisal skills in order to give appropriate feedback to the teams they manage

5 Accountants who are employed by accountancy firms usually specialize in very specific areas such as auditing, taxation or forensic accounting Naturally, each specialism has different training requirements

Complete the sentences with your own words Write between 6 and 15 words

1 Strategic and managerial skills can _ _

4 With a qualified accountancy profession, developing countries _

Establishing The Profession Worldwide

1 business activity in which two or more companies have invested together

A joint venture B accountancy firm C partnership D academics

2 official organizations which represent people of a particular profession

3 in the UK, a person who has finished three years of work and training and passed an examination to become a member of the Institute of Chartered Accountants

4 a self-governing professional organization for the purpose of regulation of the audit profession

C chamber of auditors D chamber of commerce

5 the person with the most important position in a company or organization

A accountant B auditor C Chief Executive D regulator

1.2 Match the words/phrases in the box with their definitions There are THREE extra words auditing regulator reputation shift

IFRS tax accounting chartered accountant employer- led

1 to move something to a different place or position

2 one of the standards created by the International Accounting Standards Board, which explains how company accounts must be recorded or shown

4 the opinion that people have of someone or something, based on past behavior or character

5 a person or an organization who is chosen by the government to be responsible for making sure that an industry or system work legally and fairly

1.3 Use the correct words /phrases in the box to complete the gaps outsource host development partnership adopted

1 The organization will a conference about how to cut corporate crime

2 The company has formed a / an with a US marketing firm to try to break into that market

3 Many European businesses have a management styles closer to that of the US

4 The decision to had been made for financial reasons

5 The first year of the plan is primarily focused on organizational _

The consistency principle requires the use of consistent measurement and depreciation methods throughout the life of an asset to ensure accurate financial reporting This principle ensures that changes in accounting policies do not materially distort financial statements The valuation of assets is crucial for determining their fair value, which can be influenced by factors such as bondholders' expectations and the business's provisions Chartered accountants play a significant role in ensuring the accuracy and reliability of financial statements by adhering to accounting standards and principles.

14 disclosed conventions accounting policies value

Investors in companies want to know how much the companies are worth, so companies regularly have to publish the _ (1) of their assets and liabilities Companies also have to calculate their profits or losses: their managers need this information, and so do shareholders, bondholders and the tax authorities Companies can choose their _ (2) - their way of doing their accounts There are a range of methods of valuation - deciding how much something is worth - and _ (3) - determining how big something is - that are accepted by law or by official accounting standards In the USA, there are Generally Accepted Accounting Principles (GAAP) In most of the rest of the world there are International Financial Reporting Standards (IFRS), set by the International Accounting Standards Board These are technical rules or _ (4) - accepted ways of doing things that are not written down in a law

Although businesses can choose among different accounting policies, they have to be consistent which means using the same methods every year, unless there is a good reason to change a policy: this is known as the _ (5) The policies also have to be _ (6) or revealed to the shareholders: the Annual Report will contain a 'Statement of Accounting Policies' that mentions any changes that have been made This enables shareholders to compare profits and values with those of previous years

Areas in which the choice of policies can make a big difference to the final profit figure include _ (7) - reducing the value of assets in the company's accounts, the valuation of stock or inventory, and the making of _ (8) -amounts of money deducted from profits - for future pension payments

Financial reporting standards in British companies necessitate a "true and fair view" presentation of their financial status, allowing for multiple acceptable interpretations as opposed to a single, definitive "true and fair view." This flexibility ensures that financial statements are tailored to the complexity and specific circumstances of each company, providing users with a comprehensive and accurate representation of their financial position and performance.

(Professional English in Use Finance)

2.2 Read the text and choose the best option to fill in each blank

THE ACCOUNTING PROFESSION AND CAREER

To decide to be an accountant is no more descriptive than deciding to be a doctor as there are a variety of specialty areas Many accountants engage in the practice of public accounting, which involves _ (1) audit, tax, and consulting services to the general public To engage in the practice of public accounting usually requires one to be _ (2) In the United States, individual states issue a license called a Certified Public Accountant (CPA) Other countries offer similar designations such as the

“Chartered Accountant.” Auditing involves the examination of _ (3) and systems that underlie an organization’s _ (4) reports, with the ultimate goal of providing an independent report on the appropriateness of financial statements Tax services relate to providing help in the preparation and filing of tax returns and the rendering of advice on the tax consequences of _ (5) actions Consulting services can vary dramatically, and include such diverse activities as information systems engineering to evaluating production methods

Many accountants are privately employed by small and large businesses (i.e.,

“industry accounting”) and not-for-profit agencies (some hospitals and universities, as well as most charitable groups and churches) They may work in areas of product costing and pricing, budgeting, and the examination of investment alternatives or they may serve as _ (6) who look at controls and procedures in use by their employer Objectives of these reviews are _ (7) company resources and assess the reliability and accuracy of accounting information and accounting systems They may also serve as in-house tax accountants, financial managers, or countless other occupations

Many accountants also work in the _ (8) sector, whether it be local, state, or national levels Accountants are employed at the Internal Revenue Service, General Accounting Office, Securities and Exchange Commission, and even the Federal Bureau of Investigation, among other agencies

(https://www.principlesofaccounting.com/chapter-1/accounting-profession/)

6 A internal auditors B accountants C directors D managers

7 A to use B to safeguard C to apply D to show

Financial accounting is the act of accounting for cash, fixed assets, stock, etc Management accounting is looking at the effect that has on your business, through such media as profit percentages and under/overspend charts

Management accounting is a mechanism for using financial resources as a normalizing mechanism for making decisions about different choice and alternatives In other words it helps the management to do the right thing, whereas financial accounting is something performed to agreed standards and principles which are known as GAAP (Generally Agreed Accounting Principles) designed to fairly and accurately report the true worth of the business to its owners and its true profit to its tax collectors

A management accounting system produces information that is used within an organization, by managers and employees A financial accounting system produces financial accounting information that is used by external parties to the organization, such as shareholders, bank and creditors Management accounting helps management to record, plan and control activities and aids the decision making process Financial accounting provides a record of the performance of an organization over a defined period and the state of affairs at the end of that period There are no legal requirements for an organization to use management accounting Limited companies must, by law, prepare financial accounts Management accounting can focus on specific areas of an organization’s activities Information may aid a decision making rather than be an end product of a decision

Financial accounting concentrates on the organization as a whole, aggregating revenues and costs from different operations Financial accounts are an end themselves

(Professional English in Use Management)

1 What is the difference between Financial and Management Accounting?

2 What information does a management accounting system give?

3 What information does a financial accounting system give?

4 How does management accounting help management?

5 What does financial accounting record?

3.2 Read the bellow text and then circle if the statements below are true [T]or false [F]

Everyone should agree that it is easy to spend money – sometimes too easy – and it is difficult to save money One may ask himself “Where did my money go?” after counting the money in his purse So before and after earning, spending and saving, people and businesses turn to paper and pencil – and now to computers – to plan what is going to happen with their money and account for what is happening or has happened to it A financial plan is called a budget

This universal problem affects not only the individual, but all entities – small businesses, big corporations, non-profit organizations, and the government Many politicians have made many speeches about cost over-runs and budget deficits caused by expenses being greater than income Husbands and wives worry about living within their means, and parents caution children about over-spending their allowances

A budget is, quite simply, a forecast of what the revenue will be (how much money will come in) and what the expenses will be (how much money will go out) Some

International Financial Reporting Standards

1 the documents that are produced for investors at the end of the accounting process

A reported accounts B adjustment C reorientation D change

2 the main person responsible for managing a company or organization, who is sometimes also the company's president or chairman of the board

A auditor B director C CEO D Director of External Reporting

3 a statement that reveals the nature of the relationship between the analysts, their employer and the company that is the subject of the research report

4 the way a company decides how much and in which way it pays its employees

A adjustment B pay policy C negligence D panicking

5 the system of financial organizations from which companies and governments raise money selling stocks, bonds, etc to investors

1.2 Match the words/phrases in the box with their definitions There are THREE extra words auditing external reporting insolvency practitioner anomalies bookkeeping Director of External Reporting anticipate panic

1 the issuance of financial statements to parties outside of the reporting entity

2 say or estimate that (a specified thing) will happen in the future or will be a consequence of something

3 things which do not ‘fit’ in a company’s accounts

4 a person who is in charge of the way a company reports its accounts to the outside world _

5 a sudden strong feeling of fear that prevents reasonable thought and action

1.3 Use the correct words /phrases in the box to complete the gaps reported phase ongoing switchover track

1 The company set up a database to help _ sales across the country

2 The _ to the euro made it easier for Eurozone countries to do business with each other

3 The project is only in the initial _, but it’s looking quite promising

4 The public will use the accounts to get a picture of the company’s financial performance

5 There are a number of _ difficulties with the project

2.1 Complete the gaps with the correct words/phrases in the box There are four extra words that you don’t need laws accountancy shareholders panicking standards apply anticipate annual accounts follow statements funded anomaly

In most continental European countries, and in Japan, there are (1) _

22 relating to accounting, established by the government In the US, companies whose stocks are traded on public stock exchanges have to (2) rules set by the Securities and Exchange Commission (SEC), a government agency In Britain, the rules, which are called (3) _, have been established by independent organizations such as the Accounting Standards Board (ASB), and by the accountancy profession itself Companies are expected to (4) or use these standards in their (5) _ in order to give a true and fair view

Companies in most English-speaking countries are largely (6) by shareholders, both individuals and financial institutions In these countries, the financial statements are prepared for (7) However, in many continental European countries businesses are largely funded by banks, so accounting and financial (8) are prepared for creditors and the tax authorities

2.2 Read the text and choose the best option to fill in each blank

There are three or four different (1) that companies include in their Annual Reports, which shareholders can legally expect (2) The key documents are the profit and loss account, the balance sheet, and a (3) statement of some kinds In the USA, and under (4) Financial Reporting Standards, the profit and loss account is called a/an (5) This document is fairly self – explanatory: it’s income less expenditure The balance sheet is a statement showing what the company has, and what it (6) at the end of the year, while the funds flow statement attempts to show whether the company is generating or consuming cash The tax authorities (7) more detail than is given in these documents, (8) profit is not the same as accounting profit, so they will expect to see reconciliation between the two

(English for the Financial Sector)

2 A to earn B to buy C to see D to produce

3 A income statement B funds flow C net income D finance

5 A income statement B cash flow C trade income D balance sheet

ADOPTION OF IFRS IN VIETNAM

The Ministry of Finance (MoF) is promoting IFRS adoption in Vietnam On 23 March 2019, the MoF released the draft IFRS roadmap for public comments before submitting to the Prime Minister for approval The draft roadmap divides the IFRS implementation into 3 stages:

Stage 1 – IFRS readiness preparation (from 2019 to 2021): The MoF will make necessary preparations for the roadmap implementation in order to support businesses adopting IFRS from 2022 onwards These preparations include publishing Vietnamese translation of IFRS standards, training, building guidelines for IFRS implementation, etc

Stage 2 – IFRS pilot implementation (from 2022 to 2025): The MoF will select certain companies, i.e state-owned enterprises, listed companies and large-scale unlisted public companies to put IFRS into practice FDI companies may adopt IFRS for their separate financial statements on a voluntary basis, provided that they supply all required information and transparent reports to the authorities about their contributions to the State budget

Stage 3 – IFRS compulsory implementation (from 2025 onwards): IFRS will be compulsory for consolidated financial statements of all SOEs, listed companies and large- scale unlisted public companies Other businesses that operate as parent companies may create IFRS consolidated financial statements on a voluntary basis All remaining businesses may adopt IFRS for their separate financial statements on a voluntary basis, provided that they supply all required information and transparent reports to the authorities about their contributions to the State budget

(pwc.com.vn/en/service/assurance)

1.Which agency has the draft IFRS roadmap in Vietnam?

2 When was the draft IFRS roadmap published for the public in Vietnam?

3 How many phases does the draft schedule divide the implementation of IFRS into? _

4.What will the Ministry of Finance prepare to support businesses to apply IFRS from

5 From 2025 onward, will all businesses across the country apply IFRS to their consolidated financial statements?

3.2 Read following passage and then decide if the statements below are true [T]or false [F]

Filling out tax forms is tedious and often confusing Why not let our experience and expertise work for you?

At Brandon Hicks and Associates, we know how important it is to prepare your taxes quickly, efficiently, and correctly All of our CPAs have a minimum of five years' experience in individual and business tax accounting But don't take our word for it We highly recommend that you check with the board of accountancy to verify the status of our CPAs

Not only will you benefit from our years of knowledge and experience, but you can also rest assured that you won't pay more than you have to No matter how complex your situation, we guarantee to maximize your savings All of our work is done in-house - nothing is outsourced In addition, we have a proven review process Every completed tax form is evaluated by a senior accountant before filing As important as accuracy is, we understand that privacy and security are equally important And of course, we'll never

25 share your personal information with third parties Our privacy policy is among the strictest in the business

Your information will not be shared with anyone except our quality assurance personnel

1 Brandon Hicks and Associates doesn't contract out any of its work T/F

2 The board of accountancy created a tax review process used by the firm T/F

3 Tax accountants need at least five years' experience to work at the firm T/F

4 Each finished tax type is assessed by a senior accountant in anytime T/F

5 Your personal information is only shared with quality assurance personnel at Brandon and Associates T/F

1 Companies need to fulfil all of the disclosure requirements in their reported accounts in order to comply with IFRS

2 The changeover to the new set of accounting rules by many European companies was much more complicated than they originally thought it would be

3 By adopting IFRS, a business can present its financial statements on the same basis as its foreign competitors, making comparisons easier

4 The main reason businesses are not willing to apply IFRS is the basic differences between accounting standards

5 As IFRS increases the transparency of financial statements, Vietnamese banks and companies may gain higher trust and reputation from foreign investors

1 CEOs have to understand the impact of IFRS _ _

2 The financial statements of a company are _

3 Adjusting key accounting policies in order to _

4 Companies had to assess how they would have to _

5 Changing over required a lot of adjustments

Annual Financial Statement

1 amount of money owed by a business to a supplier or lender

2 the profit relating to a company's normal activities of providing goods or services, before tax is deducted

A operating profit B asset C operating expense D reserve

3 the gradual loss in value of a fixed asset that wears out over a number of years or needs to be replaced regularly

A goodwill B reserves C depreciation D retained earning

4 a cost such as wages, rent, and interest that does not change in relation to how much a business produces

A fixed cost B reduced cost C interest expense D free expense

5 money that you earn from dividends that are paid on shares that you own

A operating income B free income C net income D dividend income

1.2 Match the words/phrases in the box with their definitions There are THREE extra words derivatives deposit prepaid expenses operating profit joint venture called-up share capital provisions balance sheet

1 money set aside for a future expense (such as debts which a company's customers fail to pay)

2 assets that arise when expenses are paid before they are incurred

3 a document showing a company’s financial position and wealth at a particular time, often the last day of its financial year

4 an amount of money that someone pays into a bank account

5 a business or business activity that two or more people or companies work on together _

1.3 Use the correct words /phrases in the box to complete the gaps operating intangible assets net income reserve shareholder’s

1 Next year, her will increase to almost $10.000, thanks to the increases in tax credits

2 A large chunk of the acquisition price will be allocated to , including goodwill

3 In 2008, the total income increased slightly on the previous year

4 You will need a reasonable of cash to start the process

5 equity grew significantly on the previous year

2.1 Complete the gaps with the correct words/phrases in the box There are four extra words that you don’t need equity analysts managed responsibilities standards balance sheet annual report annual accounts external statements shareholders anomaly

WHAT SHOULD I LOOK FOR IN THE ANNUAL REPORT?

By law, all public companies have to publish a/an (1) every year, and to send a copy to all shareholders The contents are mostly defined by law

To gauge a company's performance, the chairman's statement, often referred to as a "letter to shareholders," serves as an informative starting point This document provides a concise overview of the company's yearly performance, frequently broken down by industry sector, enabling stakeholders to assess the company's overall trajectory.

29 business At the end of this section there is also an outlook statement: (3) check this to see how confident the board feels about the future

In the middle sections of a UK report there is now a section called corporate governance, which explains the way company is (4) by its board of directors and how it follows the codes for good governance These codes do not have the force of company laws but they are recommendations on how a company should be managed

Then there are the statement of director’s (5) and the independent auditors’ report The former tells you of the legal responsibilities of the board in preparing the accounts The latter is of interest to regulators because it gives the opinion of (6) auditors on the accuracy of the published financial figures

At the end of the report, you will always find the financial statements which contain essential information for investors If you want to know about the value of the company (i.e its assets and liabilities), you should turn to the (7) However, to see how the company is performing (i.e the profit or loss it is making), you should turn to the income statement and look at the operating profit

The financial statement is supported by detailed notes to the accounts These are of interest to professionals like (8) analysts or accountants, who want to see them, as they show how all the figures were calculated

2.2 Read the following statement and choose the correct words/phrases to complete the gaps

For the year ended 31 st December 2005 £m

Net claims and benefits paid on insurance contacts

Total income (5) of insurance claims

Impairment charge and other credit provisions

Operating expenses excluding amortization of (6) _ assets

Share of post-tax results of associates and joint ventures 45 56

Profit on disposal of associates and joint ventures _ 45

Net profit for the year 3,841 3,301

(English for the Financial Sector)

3.1 Read the following balance sheet and answer the questions

In Millions of $ As of 2008-12-

Property/Plant/Equipment, Total - Gross 5.233.84 4.039.26

Other Long Term Assets, Total 433.85 201.75

Other Long Term Liabilities, Total 1.214.11 610.53

1 Which two figures have to be the same (to balance), by definition?

2 How much money had the company already paid in advance for goods and services, on the date of 2008 balance sheet?

3 How much have shareholders contributed to the company on the date of 2008 balance sheet?

4 At the 2008 balance sheet date, which is greater, the amount of capital the shareholders have paid into the company, or the amount of profit that has not been spent?

5 At the 2008 balance sheet date, which total is higher – the money Google currently owes, or the money that is owed?

3.2 Read the following passage and then decide if the statements below are true [T]or false [F]

A balance sheet shows us the value of a company at the end of the company’s financial year

On one side of the balance sheet, we find everything the company owns – its assets These are both the things it has invested in, like poverty and machinery, and the cash they hold Some of these assets are long-term investments and are difficult to sell quickly; these are described as fixed assets There are other things, like stocks of materials that the company expect to use and sell quickly, plus cash and debtors; there are described as current assets

On the other side of the balance sheet are the liabilities: all the money the company still owes and must pay to other people such as the banks, creditors, and other forms of debt There are also divided into short – term liabilities that the company must pay soon, and long – term liabilities like bank loans and share issued

If we put the two sides together, we can see the net value of the company at the date of the balance sheet As the company is owed by the shareholders, this represents the value of the shareholders’ funds

In the UK, a balance sheet is presented in vertical form

1 Balance sheet is a statement that shows the value of a company's assets and its debts at the end of the company’s financial year T/F

2 Saling current assets is slower than saling fixed assets T/F

3 The net value of the company can be seen at a specific time of the balance sheet if we set the company’s assets and debts T/F

4 The amount of money that the company owns is called liabilities T/F

5 The balance sheet is showed in horizontal form in the UK T/F

1 The balance sheet is one of the basic tools in fundamental analysis Fundamental analysis helps to determine security valuation as well as growth potential

2 Balance sheets show what a company owns and what it owes at a fixed point in time

3 Financial statement (or financial report) is a formal record of the financial activities and the position of a business, person

4 In most countries, companies record the historical cost of their assets-their original purchase price, and not their (estimated) current selling price or replacement cost

5 Balance sheet is a statement showing the value of a business’s assets, its liabilities, and its capital or shareholder’s equity

1 The cash flow statement shows _ _

2 A cash flow statement gives details of cash flows – money _ _

3 The purpose of credit control is to is to minimize the funds

4 Typical assets listed on the balance sheet include cash, _ _

5 Balance sheet shows us the value _

Company Performance

1 a generally accepted opinion or decision among a group of people

2 the quality of being able to return quickly to a previous good condition after problems

3 to warn someone about a possible problem or danger

A offset B analyze C caution D close up

4 the percentage of sales in a market that a company or product has

5 not following the normal pattern of business activity

A late-cycle B upbeat C expected D counter-cyclical

1.2 Match the words/phrases in the box with their definitions There are THREE extra words bearish rival expenses operation slowdown guidance trading update offset

1 help and advice about how to do something or about how to deal with problems

3 to balance one effect against an opposing effect, so that there is no great difference as a result

5 a person, group, etc competing with others for the same thing or in the same area

1.3 Use the correct words /phrases in the box to complete the gaps revenue slumped job market contraction publishing

1 It is hard for low-skilled workers to earn their way out of poverty in a tough that favors skilled and educated workers

2 A sharp in the labor market is predicted

3 Car sales have dramatically over the past year

4 from online ads is much less than from print advertising

5 Growth in the international education business helped offset “some weakness” in the

2.1 Complete the gaps with the correct words/phrases in the box There are four extra words that you don’t need fund spend income investment money pension company finance rents employer manage expenses

Who pays your salary every month? Who owns the office or factory in which you work? Who organizes all your business travel arrangements for you? Who manages the company’s (1) funds ?

If you work for a big European company today, your salary is probably paid and managed by another company-an outsource- and not by your (2) Maybe it’s in India or South Africa Your office is probably owned by a financial property company who (3) the building to your company Your pension may be managed by an investment bank or fund manager for a fee And if you have to travel for business, all the (4) you claim are often paid by a travel expense specialist

The fact is that, in a global world, it is no longer a good idea to (5) all the financial services in the company Instead, it is much better to give the work to a specialist provider Then, your managers (6) their time on the real important business areas where the company makes its (7) This means it can often cut costs, improve the quality of its service, and free its top managers from administration and office work It is a win-win situation Maybe we need to change many of our old ideas about what a company’s (8) department should do

All companies need money to (1) their daily operations This money comes from a variety of sources Typically, it comes from owners, from trading income, and from the banks At the outset, the owners will invest money in the company, the (2) capital, in exchange for shares The company will then negotiate with a bank to set up short-term overdraft facilities or sometimes longer-term (3) Once trading has begun they will hope to receive increasing income from their sales to customers to cover their expenses The problem for any small (4) company is that it will have to begin paying expenses before it receives any (5) from sales It will have to pay suppliers for raw materials or stocks and probably buy equipment; it will need to (6) rent for its offices and salaries to its staff; and it will have to pay interest to the banks on any overdraft or loans it has arranged This means that there is a big immediate outflow of funds before any income is received from sales, creating a (7) problem The problem is compounded by the fact that the company will probably have to offer its customers a credit period in which to (8) their purchases (typically 30 to 90 days), so any inflow of funds will be further delayed

4 A security B start-up C finance D auditing

7 A sale B crisis C credit D cash-flow

8 A pay for B pay off C pay by D pay in

NATURA AIMS TO EXPAND INTERNATIONALLY

Natura is a fast – growing Brazilian cosmetics and toiletries company which started as a small laboratory in a garage in São Paulo 37 year ago Today, it is trying to go international

Natura picked France as the first country outside Latin America to try out its ideas

“We wanted to choose a sophisticated market where people want things to be very good” says Alessandro Carlucci, Natura’s Chief Executive “We wanted a test that was tough”

Mr Carlucci says the experiment was successful Within five years, he says Nature wants to have “at least” 10 percent of its revenues coming from outside Brazil, compared with 3 percent now Apart from Brazil and its small operation in France, Natura currently sell its cosmetics in a few other South America countries

It sells a range of 600 soaps, shampoos, skin-care lotions and similar products All of them are based on about 900 natural ingredients, sourced mostly from farmers in the Amazon rainforest

The company promotes itself as an “ethical” company that works with growers who harvest their products in an environmentally sensitive way It also uses biodegradable packaging

“ What makes them different from other companies is their corporate values They really want to make the world a better place”, says Mauro Cunha, Chief Investment Officer at Franklin Templeton Investments Brazil

Results are good In the first nine months, revenues were up 21 percent to R$2.7bn (US$1.3bn.) Net income rose 33 percent to R$ 344m

(https://www.ft.com/content/c20b95d2-96a1-11db-8ba1-0000779e2340)

1 Where does Natura sell its products?

2 What is the company’s target for the next five years?

3 Where does the company get the ingredients for its products?

4 What makes Natura an “ethical” company?

5 Why did Natura choose France to find out how successful it could expand abroad?

HOW LIQUID IS YOUR COMPANY?

Liquidity is a vital factor of your business's health But what is liquidity? Liquidity refers to your company's ability to meet its obligations without selling assets The least liquid assets are things like buildings and brand names These assets take time to be converted to cash It is important to maintain a certain level of liquidity

Excessive cash balances are unproductive But insufficient cash balances are dangerous Every day, your business has cash receipts and expenditures It is a bad idea to trust that your daily receipts are enough to cover your expenditures You can't get by with a zero cash balance Instead, maintain a safety reserve of cash The best way to do this is to keep a cash account This allows you to pay unexpected expenditures It also sets you up for opportunities like investments or buying out competitors

1 Liquidity means that the company is able to pay any money that is owed T/F

2 Brand names are highly liquid assets T/F

3 Insufficient cash leads to unexpected expenditures T/F

4 Keeping a safety reserve of cash helps you pay unexpected expenditures T/F

5 A safety reserve of cash gives you many business chances T/F

1 Company law in Britain and the Securities and Exchange Commission in the US require companies to publish annual balance sheets.

2 Companies in countries which use historical cost accounting do not usually record an estimated market value.

3 If a company thinks a debt will not be paid, it has to anticipate the loss according to the conservatism principle

4 American and European companies usually put assets on the left of a balance sheet and capital and liabilities on the right

5 Successful companies generally want to diversity: to introduce new products or services, and enter new markets

2 A company goes bankrupt means that the company is _

3 To calculate your breakeven point, you just have to know _

4 The company suffered losses since _

5 Shareholders can ask company directors questions

Accounting For Banks

1 The extent to which someone can be believed or trusted

2 The process of discussing something with someone in order to get their advice or opinion about it

3 A figure showing the total value of the assets of a company or organization, often used by investors to study a company's share price, its value when sold

A capital B asset value C capital need D market volatility

4 A person or thing that does the same job or has the same function as a person or thing in a different organization

5 To spread the value or cost of an asset in accounts over a number of years

1.2 Match the words/phrases in the box with their definitions There are THREE extra words watchdogs capital needs exaggerate fair-value earning regulatory assessment market volatility

1 a situation in which the value of securities changes suddenly and often

2 to make something seem larger, more important, better, or worse than it really is

3 a person or an organization responsible for making certain that companies obey particular standards and do not act illegally

4 relating to the activity of checking whether a business is working according to official rules or laws

5 cash and easily liquidated assets that a bank must hold to satisfy stock-exchange regulators

1.3 Use the correct words /phrases in the box to complete the gaps market volatility fair value emerged capital market value

1 The car is offered at a price well below

2 During a period of , the reduced market value of an asset at any specific point in time is not take into account

3 Low-tax policies are used by some countries to attract

4 The of the investment was estimated at $90.5 million

5 The bank’s problems as international stock market started to plunge in 2008

Revenue is the income generated by a corporation from its regular business activities, while gross profit represents the revenue minus the cost of goods sold Operating profit is the gross profit minus operating expenses, and profit after tax is the operating profit minus corporation tax Dividends are payments made to shareholders from the retained profit, which is the portion of profit not distributed as dividends.

How do you know if a company is making a profit?

There are many different ways in which to look at the profits a company makes because accountants need to measure the efficiency of different activities in the business So, if, for example, we want to find out how weIl a company is trading we need to look at the figures for total sales, the (1) , and then subtract from that the amount the company paid suppliers to purchase these goods, the cost of sales This gives us a figure for the (2) .

However, a company also has many other permanent 'fixed' costs that are not affected by the sales volume It has to pay for rent, salaries, and administration and these (3)

have to be deducted to give us the operating profit It is this figure that most analysts focus on each quarter

But to understand the risks of investing in the company the investor also needs to look at the outgoings from the company to pay the (4) on the bank loans and the level of (5) (the company tax paid to the government)

Once these have been deducted we are left with a figure for (6) Finally, we need to look at what happens to the money the company earns This money can be kept by the company as (7) to invest for the future But the directors also have to consider what level of return to offer to the shareholders when they decide the level of (8) to pay out

2.2 Read the passage and choose the correct words/phrases to complete the gaps CASH MANAGEMENT SERVICES AND PAYMENT PRODUCTS

Today, a majority of transactions occur through electronic means This shift impacts various aspects of life, from daily consumer purchases using direct debit to international payments facilitated by cross-border credit transfers Modern payment solutions offer tailored options to manage the timing and terms of transactions, catering to the specific needs of businesses.

45 speed up international payments, the new clearing system of the Euro system Central Banks allows (5) transactions to be processed in real time

By centralizing negative and positive balances into a single account position on a daily basis, overall liquidity can be improved, creating (6) for the short- term investment of any surplus funds Rapid access to payment information can be accessed through (7) such as SWIFT, a system used for secure exchange of data Banks also need information to (8) money laundering and fraud

(www.thebanker.com/ftauthor/view/Marcus+Sehr)

4 A set up B adjust C control D inform

5 A cross-border B direct C indirect D individual

6 A cash flows B opportunities C revenues D profits

In the past, a company’s financial records were kept in real books or ledgers – hence the term bookkeeping - so a company kept a separate sales ledger for sales made, a purchasing ledger for things bought, a cash ledger, and others Today, of course, these records are mostly kept on computers in electronic form

Even today, the company accountants may use these books to prepare the management accounts These are prepared monthly, or even weekly in very big companies They are not published outside the company, but provide information for controlling the business by giving an up - to - date statement of the company’s current financial trading They help to answer questions such as “Are sales going to plan?” and “What is happening to our costs?”

But a modern company is also regulated by laws (e.g the Companies Acts in the UK), and these laws require a company to publish official financial statements for regulators and shareholders to inspect This means that the accountants have to prepare a second annual summary set of accounts, the Statutory Financial Accounts which include a balance sheet, income statement, and cash-flow statement, according to recognized accounting standards

These statutory accounts summarize the financial statements for the last year But the accountants must make sure that the company reports its official results according to the accounting standards created by the accounting profession For example, the company must follow a principle of “consistency” (it cannot keep changing its accounting system every year): it must be “prudent” (careful) in its estimate of the value of things it owns; and the directors must believe that the company has enough money to continue trading next year as a “going concern”

These basic principles have been incorporated into national accounting standards in different ways in different countries But globalization has created a growing pressure for all companies worldwide to use the same reporting standards developed by the international accounting organization, the IFSA

1 What information can you find in the books or ledgers of a company?

2 Why do the company accountants use ledgers?

3 What is the purpose of the management accounts?

4 What is the reason for having the statutory financial accounts?

5 What is the role of the IFSA?

3.2 Read the following passage, and then circle if the statements below are true [T]or false [F]

An audit of Endless Magic Toy Company has been conducted, revealing anomalies in their financial records These anomalies require material adjustments to the financial statements before a clean audit opinion can be issued, indicating the need for further investigation and rectification.

First, I noticed that the reported sales figures do not match the actual revenue At first, I thought it could have been a simple clerical error But then I recalled something I had read earlier about bonuses for sales people Sure enough, it appears the sales people reported erroneous sales figures - sales that won't actually occur until next quarter I believe they did this in order to surpass the bonus cutoff point

The second impropriety that I found had to do with some new manufacturing equipment As you know, these assets should have been capitalized and depreciated over their useful life But someone chose to write the entire purchase price off as an expense Any government tax department employee would see this immediately in an audit

I am surprised by the lack of professional skepticism on the part of Endless Magic Toy Company's internal auditor I have a meeting with the Chief Operating Officer tomorrow, and I plan to discuss these issues with her

1 The passage is mainly about the results of an audit T/F

2 Endless Magic’s salespeople falsified sales information T/F

3 The company capitalized its old equipment when it purchased new equipment T/F

4 The author will negotiate these issue with CEO T/F

5 The author’s idea that capitalized assets should be depreciated T/F

1 Any further interfering in accounting rules by politicians would risk destroying the long- running project towards developing a single global set of accounting rules _ _

2 European banks' accounting practices deteriorated as a result of the relaxing of fair- value accounting standards in late 2008

3 Investors in companies want to know how much the companies are worth, so companies regularly have to publish the value of their assets and liabilities

4 After a battle with the European commission in October, 2008, the IASB was forced to change its rules without consultation

5 Regulators closely link their assessment of a bank's reserves with its published accounts

1 During a period of market volatility, the reduced market value of an asset _

2 The new rules would require banks to _ _

3 Watchdogs monitor the banks to make sure that _

4 The amortized cost accounting system is considered _ _

5 These watchdogs can require a bank to hold

Scary Audit Jargon

1 showing nervousness or fear about something

2 a written instruction to a bank, asking it to make regular payments or to open a new account

A bank made B bank facility C adverse opinion D dotcom

3 likely to change often or suddenly and unexpectedly

4 special words or expressions that are used by a particular profession or group and are difficult for others to understand

5 a business which is considered able to continue operating in the foreseeable future, necessary in order to get credit and finance from suppliers and banks

A disclosure B going concern C prophecy D bank mandate

1.2 Match the words/phrases in the box with their definitions There are THREE extra words dotcom bank facility auditor emphasis of matter qualified opinion lawsuit disclosure volatile market

1 an arrangement made by a bank for its customers which lets them borrow money

2 extra information which the directors of a company give in the notes to the financial report

3 One or more paragraphs auditors can add to a report to emphasize something they believe readers should consider important and useful

4 a company which does business using the Internet or provides an Internet service

5 a disagreement between people or organizations that is brought to a court of law for a decision

1.3 Use the correct words /phrases in the box to complete the gaps audit nightmare rigorous panic adverse

1 A chain reaction of events in the financial markets has put lenders under severe pressure

2 The boss always about the budget every month

3 The whole journey was a , we lost our luggage and both flights were delayed

4 The auditors’ opinions are published in the report, including in a company’s annual report

5 Auditors become more when writing their report in difficult economic conditions

2.1 Complete the gaps with the correct words/phrases in the box There are four extra words that you don’t need opinion submit income external auditors stock accounting recorded independent account books employer consulting statement

Public companies have to (1) their financial statements to (2) independent auditors who do not work for the company The auditors have to give an (3) about whether the financial statements represent a true and fair view of the company's financial situation and results

During the audit, the external auditors examine the company's systems of internal control, to see whether transactions have been (4) correctly They check whether the assets mentioned on the balance sheet actually exist, and whether their valuation is correct For example, they usually check that some of the debtors recorded on the balance sheet are genuine They also check the annual (5) take the count of all the goods held ready for sale They always look for any unusual items in the company's (6) or statements

Until recently, the big auditing firms also offered (7) services to the companies whose accounts they audited, giving them advice about business planning, strategy and restructuring But after a number of big financial scandals, most (8) firms separated their auditing and consulting divisions, because an auditor who is also getting paid to advise a client is no longer totally independent

(Professional English in Use Finance)

TO SHARE OWNERS AND BOARD OF DIRECTORS OF MEGATRAP CORP

Audited by our firm, the consolidated financial statements of Megatrap Corp and affiliates as of December 31, 2007 and 2006, along with the statements of earnings, share owners' equity changes, and cash flows for the three-year period ending December 31, 2007, present here are the responsibility of the company's management.

We conducted our audits in accordance with (4) standards generally accepted in the United States of America Under these standards we have (5) and perform the audit to obtain reasonable assurance that the financial statements do not have any material misstatement We examined on a test basis the evidence supporting the figures and disclosures in the (6) statements

We also assessed the accounting principles used and significant estimates made by management, and we evaluated the presentation of the statements

In our opinion, the aforementioned financial statements present fairly, in all material respects, the financial position of Megatrap Corp and consolidated affiliates at December 31, 2007 and 2006, and the results of their (7) and their cash flows for each of the years in the three-year period ended December 31, 2007, in conformity with (8) principles generally accepted in the United States of America

5 A to apply B to do C to plan D rely

8 A accounting B operation C going concern D service

Often called a clean opinion, an unqualified opinion is an audit report that is issued when an auditor determines that each of the financial records provided by the small business is free of any misrepresentations In addition, an unqualified opinion indicates that the financial records have been maintained in accordance with the standards known as Generally Accepted Accounting Principles (GAAP) Typically, an unqualified report consists of a title that includes the word “independent.” This is done to illustrate that it was prepared by an unbiased third party The title is followed by the main body Made up of three paragraphs, the main body highlights the responsibilities of the auditor, the purpose of the audit and the auditor’s findings The auditor signs and dates the document, including his address

In situations when a company’s financial records have not been maintained in accordance with GAAP but no misrepresentations are identified, an auditor will issue a qualified opinion The writing of a qualified opinion is extremely similar to that of an unqualified opinion A qualified opinion, however, will include an additional paragraph that highlights the reason why the audit report is not unqualified

The worst type of financial report that can be issued to a business is an adverse opinion This indicates that the firm’s financial records do not conform to GAAP In addition, the financial records provided by the business have been grossly misrepresented Although this may occur by error, it is often an indication of fraud When this type of report is issued, a company must correct its financial statement and have it re-audited, as investors, lenders and other requesting parties will generally not accept it

On some occasions, an auditor is unable to complete an accurate audit report This may occur for a variety of reasons, such as an absence of appropriate financial records When this happens, the auditor issues a disclaimer of opinion, stating that an opinion of the firm’s financial status could not be determined

(https://smallbusiness.chron.com/4-types-audit-reports-3794.html)

1 What does a report called “clean opinion” means?

2 Why does an unqualified report have a title that includes the word “independent”?

3 What happens to the report if it is misrepresented?

4 Why could the auditor not accomplish a precise audit report?

5.Which type of audit report is the best that a business can receive?

3.2 Read the following letter and then decide if the statements below are true [T]or false [F]

FROM: Patrick Stevens, Auditor, Thomas and Riley LLP

TO: Jack Riley, Thomas and Riley LLP

I have completed my audit of Endless Magic Toy Company Unfortunately, I cannot give a clean opinion of this company without material adjustments to the financial statements I found a few anomalous entries in its books that should be attended to

First, I noticed that the reported sales figures do not match the actual revenue

At first, I thought it could have been a simple clerical error But then I recalled something I had read earlier about bonuses for sales people Sure enough, it appears the sales people reported erroneous sales figures - sales that won't actually occur until next quarter I believe they did this in order to surpass the bonus cutoff point

Improper accounting practices were evident in the treatment of manufacturing equipment The accounting department erroneously expensed the entire purchase price of the equipment, instead of capitalizing it and depreciating it over its useful life This practice violates accounting standards and would raise red flags during an audit by tax authorities.

Due to a lack of professional skepticism from Endless Magic Toy Company's internal auditor, concerns have been raised regarding the company's financial reporting To address these issues, a meeting with the Chief Operating Officer has been scheduled for tomorrow to discuss the auditor's findings and explore potential solutions to ensure accurate and reliable financial information.

1 The passage is mainly about how to make materials adjustments T/F

2 Patrick Stevens gave his auditing result of this company after finishing his audit of it

3 Patrick Stevens recognized that the reported sales figures agree with the actual revenue

4 Endless Magic's sales people falsified sales information T/F

5 The company wrote off the purchase as an expense when it purchased new equipment.

1 The internal auditors also check the company’s system of control, related to recording transactions, valuing assets and so on

2 Responsibility of auditors give opinion with Financial statements and free from material misstatement caused by fraud or error

3 Audits and auditors are used in order to ensure that the information presented in financial statements are accurate and useful to those who view them

4 When the accounts are complete, the internal auditors check them before they are presented to the external auditors

5 Until recently, the big auditing firms also offered consulting services to the companies whose accounts they audited, giving them advice about business planning, strategy and restructuring

1 An 'adverse opinion' of auditors shows _

2 The auditors only need to consider and report _

3 An Audit risk is the risk _

4 If the auditors are dissatisfied with a company’s accounts, _

5 External directors can usually give _

Auditor Liability

1 to refuse to accept an idea or suggestion

2 the official right and power to make decisions about something

3 failure to give enough care or attention to someone or something that you are responsible for

A deep pocket B negligence C legal debate D agreement

4 a method of illegally getting money from a person or organization

5 rules or laws relating to a particular activity that are made by a government

A legislation B cozy deal C legal debate D deep pocket

1.2 Match the words/phrases in the box with their definitions There are THREE extra words sue limited liability partnership legal debate setback clean opinion cap sustainable legislation

1 to take level action against a person or organization, especially by asking in court for them to pay you money because of harm that they have caused you

2 able to continue at the same level for a period of time

3 something that happens that causes a delay or prevents a process from continuing

4 to put a limit on the amount of money that can be charged or spent in connection with a particular activity

5 partnership in which individual partners are protected from the risk of personal banks if they are not personally responsible for a defective audit opinion

1.3 Use the correct words /phrases in the box to complete the gaps liability legal implemented transparent debate

1 Companies need to be about their goals and policies

2 The United State provided the model for limited partnerships in the

3 There isn’t a formal agreement that binds us together as a company

4 The corporation has a new compensation plan for its sales force

5 Education is always a topic of interest and public

2.1 Complete the gaps with the correct words/phrases in the box There are FOUR extra words that you don’t need investigation audit discovered check resources rules credit records identified customers audit ledge

RBT Partners Auditing Division Cheviot House, 167 Bishops Gate

Following the completion of our (1) on November 22, we are writing to inform you of the first results of our checks on your company

We must point out that for reasons of time and (2) we may not have identified every failure in your systems

We would like to draw your attention to the following weaknesses identified in your systems

During our checks on your Sales Ledge we (3) six examples in which sales had been recorded in the ledge without corresponding paper invoices or documents We must remind you that all sales (4) must be matched by real physical documents

Additionally, our audit uncovered three instances where credit was extended to customers who were already more than 60 days delinquent on their payments This grave oversight demonstrates a disregard for the established company policy outlined in the handbook.

We would advise you to make one manager responsible for checking that all rules are followed by staff

Our (7) showed that there were a number of examples in which extra wages were paid to employees without any proof in the “time sheet” that these hours had really been worked by the employee during the period We recommended that in future a department manager should (8) and sign all salary claims before payment is made

Could you please inform us of the steps you intend to take to solve these problems before our next meeting on December 16

How do the (1) of a company know if the management are really telling them what is happening in the company’s finances and not hiding information or even committing fraud?

The answer is that every year the owners appoint an “external auditor” to check the company’s accounts and to write a report on the accuracy of the financial statements, the auditor’s report This is now a legal requirement for public companies

The auditors must give a/an (2) opinion of the accounts and make tests to see if the accounts are properly prepared according to accounting standards, and if they give “ a true and fair view” of the company’s finances

The auditors will look at all the company’s (3) , like invoices and receipts, the books and bank statements and check if these have been recorded properly Have the staff really followed both the accountancy standards and the company’s rules? Are there systems in place to (4) mistakes or fraud?

Auditors employ "substantive tests" to verify the existence of assets claimed by a company These tests involve physical inspections of factories and warehouses to witness assets firsthand Given the volume of data, auditors typically sample information rather than examining every document By sampling, auditors can efficiently assess the validity of asset claims while maintaining the integrity of the audit process.

At the end of their tests, the auditors write a letter that they send first to the (6) - describing what they have found and what needs to be corrected before they are happy to “sign off” the accounts They can then complete the (7) _ in which they declare that “in their opinion” the accounts are accurate and give a “true and fair view” of the company’s position

If, occasionally, they are unable to demonstrate this, they will issue a “qualified opinion” in which they will point out the things that they could not prove This, of course, will (8) a serious warning to the company’s owners and investors

7 A financial statement B income statement C audit report D balance sheet

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 An example of a business paper

62 used in an internal control system is the petty cash voucher Vouchers indicate receipt of payment

Petty cash vouchers document payments from the small cash fund used for minor transactions, while expense account vouchers are required before reimbursing employees for business-related expenses These vouchers serve as essential records for tracking and controlling cash disbursements.

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

2 How have opinions of external auditing changed?

3 How do large companies check their accounts?

5 What is the consequence of having too many control devices?

THE MANY FACES OF FRAUD

An accountant in the US pleaded guilty to embezzlement, diverting substantial funds from school accounts to her own over three years She wrote checks to herself and gave unauthorized raises, concealing her actions with false vendor payments Despite being placed on leave, she continued writing company checks Fraud remains prevalent, highlighting the need for robust financial controls.

A Clean Report

1 payment for work that has been done or services that have been provided

2 able to be seen or understood

3 false or missing information, whether caused by fraud (including deliberate misstatement) or error

4 adjective which describes the financial statements which have been prepared for the entire group of companies, rather than just the parent company

5 relating to the activity of checking whether a business is working according to official rules or laws

1.2 Match the words/phrases in the box with their definitions There are THREE extra words consistent test basis estimates and judgments material inconsistencies disclose regulatory misstatements resilience

1 always happening or behaving in a similar way

2 significant differences between what the auditors believe to be the company's true financial state and the information given by the directors in the annual report

3 what the auditors have to do to get the general picture because they cannot examine every single transaction or calculation behind the figures in a company's financial statements

4 give secret, private, or personal information because you must do so for financial, insurance or legal reasons

5 false statements by the directors in the audit report

1.3 Use the correct words /phrases in the box to complete the gaps remuneration estimate material applicable transaction

1 This part of the law is only to companies employing more than five people

2 We should be able to how many customers we will have each month

3 Auditors have responsibilities to report to shareholders their opinion whether financial statement are free from misstatement

4 They demanded adequate for their work

5 Each at the foreign exchange counter seems to take forever

2.1 Complete the gaps with the correct words/phrases in the box There are four extra words that you don’t need

EBIT expenses dividends cost of goods sold taxes pension net Income taxes Net profit prepaid expenses depreciation profit

An important type of audit is the financial audit It is designed to determine whether financial statements are fairly presented in accordance (1) Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP) In the United States, financial audits are required for all publicly registered companies

In addition, financial audits may be (2) for private companies, registered charities, and some governmental and public entities Certain forms of private companies are required to have an external (3) Private companies typically request financial audits year after year because lenders may have required an audit or owners may want to have external unbiased eyes look at the (4) statements to determine if the company is complying with all the required accounting principles Charities would (5) a financial audit to show the financial status of the organization to potential donors Governments and government businesses are usually required to be audited by statutes to determine if all the (6) budgeted has been properly spent Government financial reports are not always audited by outside auditors Some governments have elected or appointed auditors

Other than testing the reliability of a firm's controls, financial audits can alert management to weaknesses in the firm's controls, as well as suggest operational (7) that could be undertaken These are highlighted in the Management Letter from the auditors Strategic systems auditors (8) a top down approach to auditing by first examine a firm's business strategy and keys to competitive advantage

(https://www.accountingcoach.com/search?q=financial+audit&stp=1)

A MEMO ABOUT A PROFIT AND LOSS STATEMENT

From: Keven Baker, Senior Managerial Accountant

2010 was an excellent year, particularly for Division At On the left you'll see their profit and loss statement Their operating earnings increased from $25,000 in 2009 to

$125,000 in 2010 How did they do it?

As you can see, the sales volume, fixed expenses, and variable expenses did not change Two factors did: cost of goods sold and sales revenue Let me explain

In 2009, wholesalers were selling our units to retailers at a 300% markup Division A1 managers saw that and raised our price from $450 to $500 in 2010

In February 2010, a price reduction by a primary supplier significantly impacted our financial performance The cost of goods sold decreased from $300 per unit to $250, leading to a surge in gross margin This increase, from $150,000 in 2009 to $200,000 in 2010, underscores the substantial financial benefits of favorable supplier negotiations and cost optimization strategies.

These factors altered the Division A1 profit center Both margin per unit and total margin were doubled from 2009 to 2010 At the end of the year 2009, the margin per unit and in total were $100 and $100,000 respectively On December 31, 2010, those numbers were $200 and $200,000 respectively The resulting earnings before interest and tax (EBIT) were the best in the company's history

1 What is the passage mainly about?

2 Which of the following changed year over year?

3 Why did Division A1 managers raised prices?

4 How many reasons for the increased earnings mentioned in the passage?

3.2 Read the following the cash flow statement and then decide if the statements below are true [T] or false [F]

1 Most of the capital to start this business probably came from the bank, not the personal funds of the business owner T/F

2 The wages of staff who actually make the product (or serve customers) are shown separately from the salary of the manager T/F

3 Rent is probably paid monthly, in advance T/F

4 The gas and electricity companies are probably paid monthly, in advance T/F

5 The fact that cash flow was negative in January is a bad sign for this new business.T/F

1 Most people know that the term “bottom line” means “the most important thing” It refers to the bottom line of an income statement

2 In addition, the audit report states whether the auditors believe that the Director's report reflects the true state of the company's situation

3 Sometimes, an income statement shows huge net income But the cash flow statement shows negative cash flow

4 The number that remains on the bottom line is called net income This amount is the company’s bottom line

5 Some companies might try to make their auditors less rigorous by also paying them to do consulting work

1 Bottom line of the balance sheet is

2 The financial statement that reports _

3 Some companies try to raise their stock price by _

4 Future cash flows are usually discounted by _

5 The auditors only need to consider and report

SUPPLEMENTARY EXERCISES

Text completion

Fill in the numbered blanks with the correct words/ phrases given in the box There are FOUR extra words that you don’t need ֍ Exercise 1 records obtain transactions income accurate entities resulting evaluate process optimistic talented include

Accountants serve as custodians of financial information, meticulously recording and managing the flow of money They form the backbone of the financial infrastructure in various sectors, from businesses and governments to individuals The profession is guided by a universal set of principles that ensure the accuracy, transparency, and integrity of financial reporting.

Business Entity - Every business is a distinct entity It is important that its records be kept separate from its owner's (2) _ This is true of any type of business: partnerships, sole proprietorships, or corporations The accountant keeps all of the business (3) _of a sole proprietorship separate from the business owner's personal transactions For legal purposes, a sole proprietorship and its owner are considered to be one entity, but for accounting purposes they are considered to be two separate (4) _

Conservatism - Accountants use conservative methods They account for the most- likely scenario rather than the most (5) _scenario If a situation arises where there are two acceptable alternatives for reporting an item, conservatism directs the accountant to choose the alternative that will result in less net (6) _and/or less asset amount Conservatism helps the accountant to "break a tie." It does not direct accountants to be conservative Accountants are expected to be unbiased and objective

Objectivity - Accountants only use verifiable numbers They should not allow their feelings or opinions to influence their records All records must be (7) _and unbiased

Relevance - Accountants prepare financial records that are useful to business managers

Full Disclosure - Accounting records (8) _all available information Nothing is withheld or hidden

75 ֍ Exercise 2 frustrated world struggled provide expense tough so that expenses assess age equally decisions

‘’Profitability is just around the corner.” This is a common expression in the business world; you may have heard or said this yourself Business is (1) _, profits are illusive, and competition has a habit of moving into areas where profits are available And, sometimes, business owners become (2) _ because revenue growth only seems to bring on waves of additional (3) _

Assessing business viability is crucial, but some ventures may be doomed to fail Managerial accounting methods, specifically cost-volume-profit analysis, provide techniques to evaluate viability and growth potential Informed decisions about pursuing business opportunities require using information to identify promising prospects and avoid doomed ventures.

(https://www.principlesofaccounting.com/chapter-18/cost-behavior/)

76 ֍ Exercise 3 reporting vital to provide rely balances professional intention expected ethical to behave financial providing

Because investors and creditors place great reliance on (1) _statements in making their investment and credit decisions, it is imperative that the financial reporting process be truthful and dependable Accountants are (2) _to behave in an entirely ethical fashion, and this is generally the case To help ensure integrity in the (3) _process, the profession has adopted a code of ethics to which its licensed members must adhere In addition, checks and (4) _via the audit process, government oversight, and the ever vigilant ‘plaintiff’s attorney’ all serve a (5) _role in providing additional safeguards against the errant accountant If you are preparing to enter the accounting profession, you should do so with the (6) _of behaving with honour and integrity If you are not planning to enter the profession, you will likely (7) _upon accountants to behave in a completely trustworthy and (8) _fashion After all, you will entrust them with your financial resources and confidential information

(https://www.principlesofaccounting.com/chapter-1/accounting-profession/)

77 ֍ Exercise 4 paid income expense purchases record receivable budget measures operating reported savings accrual

ACCRUAL BASIS ACCOUNTING – NON – CASH ACCOUNTS

Some businesses use cash basis accounting They (1) _every amount of cash that they receive or spend But many businesses use another method called (2) _basis accounting Under the accrual basis of accounting (or accrual method of accounting), revenues are (3) _on the income statement when they are earned When the revenues are earned but cash is not received, the asset accounts receivable will be recorded (Under the cash basis of accounting, revenues are not reported on the (4) _statement until the cash is received.)

Here are three types of accrual basis non-cash accounts:

Accounts (5) _- Many companies make sales on credit The cash from these sales is received later But the sale is still recorded in accounts receivable

Accounts payable - Companies also make (6) _on credit The payment for these purchases is made later But the amounts are recorded immediately in accounts payable

Prepaid expense - This covers products or services that are (7) _for ahead of time For example, a business may purchase insurance policies that require a year or more advance payment The business records this payment as a prepaid (8) _asset Then they allocate it to their expense accounts in monthly increments

78 ֍ Exercise 5 decisions did for example with budgeting very complex prefer rather do on such as to

The main objective of an internal managerial accounting system is to provide information to managers so they can make sound (1) _ The goal is not to comply with outside demands but (2) _to capture valuable data that can be used to manage and control a business better Since the internal needs of firms vary, so (3) _their accounting systems Usually such systems are complex, gathering lots of details, depending on management requirements (4) _, a manager may want to know the amount of materials a certain manufacturing process utilizes, and a good managerial accounting system should give him this information

Managers use the accounting system for (5) _and other planning functions Budget numbers are saved and reports can be created and compared (6) _figures that reflect actual revenues and expenses Many budget-specific accounting software programs allow for creating "what-if" scenarios that can be (7) _ Quite a few business owners make plans based on gut feelings, and using a managerial accounting system can help them in focusing (8) _specific costs and possibilities

(https://smallbusiness.chron.com/objectives-internal-managerial-accounting-systems-

79 ֍ Exercise 6 law form legal forms partnership individuals business classifying proprietorship professional public taxes university entity

The accounting process involves recording, (1) _, summarizing, interpreting, and communicating financial information about an economic entity An (2) _is recognized as having its own separate identity An entity may be an individual, a town, a (3) _, or a business

The three major legal forms of business entity are the sole proprietorship, the partnership, and the corporation

A sole (4) _is a business entity owned by one person The life of the business ends when the owner is no longer willing or able to keep the (5) _going The owner of a sole proprietorship is legally responsible for the debts and (6) _of the business

A partnership is a business entity owned by two or more people The (7) _structure is common in businesses that offer professional services, such as law firms, accounting firms, architectural firms At the beginning of the partnership, two or more (8) _enter into a contract that details the rights, obligations, and limitations of each partner

A corporation is a business entity that is separate from its owners A corporation has a legal right to own property and do business in its own name

(Professional Englih in Use Finance)

80 ֍ Exercise 7 book-keeping financial equation revenue lenders liabilities creditors assets stakeholders borrowers distributed cash

Financial accounting is about measuring the performance of an organization and communicating this to the external (1) _ These include shareholders, who have an equity stake entitling them to a share of the profits, and (2) _, such as banks who have loaned money and suppliers who provide goods Financial accounting can answer such questions as: what is the company worth? Are its shares a profitable investment? Can it pay back all the money that it owes? Accounting is more than just recording transactions in the form of debits and credits That activity is known as (3) _ A much bigger picture is required to understand the interaction of all the factors affecting the organization's (4) _position Each organization issues an Annual Report, a public document (5) _to shareholders, in which the management discusses the past year's performance and presents the company's accounts These consist of financial statements representing the organization's financial activities in different ways The balance sheet balances all the assets and (6) _of the business to show the net worth of the company at a particular moment in time The profit and loss account (or income statement) shows (7) _, expenses and the net profit or loss over a specific period of time The report also includes a (8) _flow statement detailing the flow of funds from the company's operations, investments together with financing activities such as selling shares or borrowing to raise capital When a company has a positive cash flow it can pay out dividends to its shareholders If there is a negative cash flow, even a profitable company may fail because it cannot meet its short-term obligations

(Professional Englih in Use Mangagement)

81 ֍ Exercise 8 item invoices account as credits invoice recorded liability income statement balance sheet debit pays credit

Reading comprehension

A Read different kinds of texts and then decide if the statements below are True [T]or False [F] ֍ Exercise 1

Traditionally, accounting has been a relatively narrow profession There were only a few potential career paths Accountants generally worked in public practice for accounting firms, or as financial record-keepers in private businesses But societal and economic changes are bringing new opportunities

Many countries in the world have transitioned from manufacturing and production to a service-based economy This shift is opening the doors to a variety of new opportunities

In addition to the traditional attest services accountants perform (such as audit opinions), accountants will be in greater demand in the following areas:

Advancements in technology, particularly in communications, have revolutionized the work environment for accountants, enabling them to work flexibly from various locations and at convenient times This flexibility empowers accountants to optimize their work-life balance and adapt to changing industry demands, fostering innovation and efficiency.

In conclusion, the prospects are bright The opportunities are expanding The working conditions are becoming more favorable There is even a growing perception of accountants as business partners, rather than back-office bean counters Indeed, numbers are the language of business; and no one is more fluent in that language than accountants

1 Accountants generally work at public accounting firms and private businesses T/F

2 Many countries in the world have transitioned from manufacturing and production to a service-based economy T/F

3 Accountants have more flexibility in their work because of Financial Services T/F

4 In the future, the opportunities of accounting are narrowing T/F

5 The phrase ‘back-office bean counter’ in the last paragraph describes the past accountants’ job T/F

(Career paths Accounting Book 3) ֍ Exercise 2

Filling out tax forms is tedious and often confusing Why not let our experience and expertise work for you?

At Brandon Hicks and Associates, we know how important it is to prepare your taxes quickly, efficiently, and correctly All of our CPAs have a minimum of five years' experience in individual and business tax accounting But don't take our word for it We highly recommend that you check with the board of accountancy to verify the status of our CPAs

Not only will you benefit from our years of knowledge and experience, but you can also rest assured that you won't pay more than you have to No matter how complex your situation, we guarantee to maximize your savings All of our work is done in-house - nothing is outsourced In addition, we have a proven review process Every completed tax form is evaluated by a senior accountant before filing

As important as accuracy is, we understand that privacy and security are equally important And of course, we'll never share your personal information with third parties Our privacy policy is among the strictest in the business Your information will not be shared with anyone except our quality assurance personnel

1 The purpose of the passage is to sell products T/F

2 Brandon Hicks and Associates is a service provider (tax accounting) T/F

3 The company staff are CPA with a minimum of five years’ experience T/F

4 The company guarantees to minimize the customers’ savings T/F

5 The company promises not to share the customers’ personal information with third parties T/F

THE BEST PLACE IN THE WORLD TO MOVE YOUR BUSINESS!

Hundreds of people are convicted of tax evasion every year Don't let it happen to you! Move your business to a place where it won't be punished for making a profit!

Haven Island is the perfect location from which to operate your business without fear of unfair tax avoidance laws Our government refuses to levy any excessive taxes We won't impose extra fees on your business simply for being successful Furthermore, we offer huge tax breaks to existing firms that wish to relocate here But that's not all

Do you live in a country with multiple tax brackets? Many people call such tax policies

"progressive taxation," but we call it WRONG! That's why Haven Island has adopted a flat tax for all businesses and individuals But wait; there's more

Do you prefer to stay in another country, but still want to invest in the prosperity that is Haven Island? Many countries impose fees or taxes on funds invested in a foreign country That's why our biggest business association, The Free Capital Association, has decided to help promote investment by foreign firms It has offered to pay at least 50% of your fees and taxes when you invest in a Haven Island company

1 Haven Island is a perfect location from which to operate a business with fear of unfair tax avoidance laws T/F

2 To be successful, they impose extra fees on the businesses T/F

3 Tax brackets are called progressive taxation T/F

4 The Free Capital Association is the biggest association of Haven Island T/F

5 The Free Capital Association has offered to pay at least a half of a business fees and taxes T/F

Periodically, every business needs new equipment or facilities Very few have sufficient resources at their disposal to buy these items outright There are typically only two options: finance the purchase or lease instead How can you decide which option will be more profitable?

First you should understand what a lease is and how it works Basically, a lease is an agreement in which an owner or lessor, allows someone else, a lessee, to use their equipment or property In exchange, the lessee agrees to pay the lessor some agreed upon amount of money, usually more than the actual value of the property

There are certain advantages to leasing The most obvious is the fact that there is no down- payment If you decide instead to purchase property you will have to finance it Financiers often require down-payments of 25% or more Additionally, leases offer some protection against equipment obsolescence If something becomes obsolete you can simply stop leasing it However, keep in mind that most leases have penalties for early termination

Leasing presents some limitations While it grants usage throughout a property's lifespan, the lessee ultimately forfeits its economic value upon lease expiration Moreover, purchasing a property can yield greater tax advantages through depreciation deductions compared to leasing, making ownership more financially beneficial in the long run.

1 Companies usually finance their new machinery by leasing it T/F

2 Leasing shortly means an agreement allowing you to use their equipment and pay for this T/F

3 There are three parties in a leasing agreement T/F

4 There are some disadvantages of leasing, such as no down-payment or protection against equipment obsolescence T/F

5 There are some advantage of leasing, such as losing the economic value of the property or getting greater tax benefits T/F

SHOULD ACCOUNTING RULES BE GLOBALIZED?

The world is shrinking Due to the worldwide trend of globalization, companies all over the world are interacting and doing business with one another This has led many to suggest that there is a need for globalized standards in accounting A few organizations, like the International Accounting Standards Committee (IASC) and the International Accounting Standards Board (IASB), have already begun to design such rules Many businesses have voluntarily adopted these guidelines Should these or other rules be applied globally?

Globalized accounting rules would carry certain advantages Since globalization is probably inevitable, businesses must engage the global market if they wish to maximize their prospects Indeed, globalization allows for the free circulation of capital as well as ideas and innovations Furthermore, with standardized accounting, companies would be better able to make strategic decisions within the global economy

However, globalization may carry certain disadvantages as well It may be relatively easy and profitable for large corporations to adjust to globalized standards But the adjustment

93 would be more difficult for mid-sized and small businesses They have fewer resources than the larger companies Changing to a new standardized accounting system could be very costly for them It would require new staff as well as training for existing staff

1 Globalized standards are not necessary in accounting because of the worldwide trend of globalization T/F

2 IASC stands for Internal Accounting Standards Committee T/F

3 The disadvantages of globalized accounting rules include free circulation of capital and strategic decisions within the global economy T/F

4 The advantages of globalized accounting rules include difficulties and increased costs for mid-sized and small businesses T/F

5 Mid-sized and small businesses face difficulties because they have fewer resources than the larger companies T/F

Sentence completion

Complete the following incomplete sentences between 6 and 15 words USING

1 Businessmen themselves often do not understand the tax laws, and they must therefore depend on _

2 Careful planning designed to decrease the tax liability

3 Auditing is an accounting function that involves _

4 An example of a business paper used

5 In practice, the cost of installing and maintaining control systems forces management

6 Jobs in accounting are only slightly affected by

7 To rise to the top of the field in private accounting requires

8 The financial records of an organization are ֍ Exercise 2

1 To establish a selling price that ensures a profit, it is first necessary to _

2 Petroleum products, paper, flour, and cement are

4 Allowances are special price adjustments for certain customers; discounts are prices that _

5 A company's assets are usually divided into

6 The accounting technique of depreciation makes it unnecessary to charge the whole cost of a fixed asset

7 People often think about venture capitalists as business angels, wealthy entrepreneurs who provide capital in return for

1 Forensic accounting happens when a company’s financial records are _

2 The word ‘insolvency’ is used to refer to an accountant working in this area acts for a person or company that is no longer able to

3 Tax accounting refers to preparing a person’s or company’s financial information in order to calculate the proportion of their profit

4 Auditing means checking an organisation's activities or performance or examining a person’s or organisation’s accounts to _

5 Dividend is a part of the profits of the company for a particular period of time that is paid

6 Operating income is money earned from a company’s

7 Goodwill refers to the value that a company has in addition to its assets, such as

8 Operating profit is profit relating to a company’s normal activities of providing

1 The Financial Accounting Standards Board (FASB) is the organization _

2 At the end of an accounting period, bookkeepers prepare a trial balance _

3 It is important for accountants to have

5 The aim of accounting standards is to provide _

6 An auditor analyses the internal business and financial systems

7 The amortised cost accounting system is considered _

8 Long-term liabilities include _ ֍ Exercise 5

1 When the accounts are complete, the internal auditors check them _

2 When a company receives goods or services on credit, _

3 All fixed assets can appreciate if there is high inflation,

4 Accelerated depreciation allows companies to remove _

5 The straight-line method of depreciation

6 Accelerated depreciation reduces companies' tax bills,

7 The Financial Accounting Standards Board (FASB) is the organization _

8 An auditor presents a written report to the management of the company, describing whether the accounting records, ֍ Exercise 6

1 Auditors had total financial responsibility if _

2 Despite auditor best efforts to prepare, _

4 Managerial or management accounting provide information that

5 A shareholder is an individual or company that

6 The skills required for bookkeeping are

7 An asset is anything owned _

8 An invoice is a list of goods that have been sold, _

1 The auditors only need to consider and report _

2 An adverse report means that the financial statements _

3 The awareness of investors or auditing firms is still limited

4 Going concern is a business that functions _

5 In general ,investors pay careful attentions _

6 The part of a company’s profits from previous years _

7 Operating income is a company's profit after subtracting operating expenses and _

8 Total receivables is a money owed by

Translation

Translate the following sentences into Vietnamese: ֍ Exercise 1

1 In the days of old, accounting was literally done by bookkeepers writing in books

2 We need to understand what accounting is, how accounting works, what debits and credits are, what journals and ledgers are, what a balance sheet is, what an income statement tells, and what accounting information reveals

3 Business transactions are entered into our books, and each entry has two components, a positive and a negative

4 We need a chart of accounts, which is nothing more than a listing of categories for our assets, such as cash, equipment, and the like

5 All of our transactions will have two entries: a debit and a credit

6 What is equity? If we are a corporation, equity is common stock, or capital stock

7 Equity is the amount a business owes to its stockholders or its owners

8 The bottom part of our financial statement, with expenses and income, is called the income statement, or the profit and loss statement

1 After a few transactions it will become obvious that accounts that usually have debit balances are on the left side of the page, and accounts that usually have credit balances are on the right side of the page

2 We have to account for it, so we debit rent expense for $500 and we credit cash for

3 Everyone with an account at the bank is happy when the bank credits our account, because when they credit our account, they add money to it

4 When a bank adds money to our checking account, it actually increases the liability of the bank

5 Businesses often arrange short-term loans called lines of credit

6 A line of credit means the business has a pre-arranged bank loan that allows them to borrow amounts they need at their convenience

7 A business will need money for a short-term basis, but not need an open line of credit

8 Individuals may borrow money this way also, but they have to show the same kind of financial information a business would

1 Cash went down $1,000, fixed assets went up $5,000, and short-term loans were added to for $4,000

2 If we purchase a piece of equipment for $15,000, and figure to sell it for $1,000 after seven years, we can depreciate $14,000 over seven years

3 If we use accelerated depreciation, we would have lots of depreciation expense at first and less later

4 We have to debit depreciation $1,000 and credit fixed assets, or a reserve for depreciation, for $1,000

5 When we recalculate our financial statement, we see that fixed assets have been reduced by $1,000

6 We need to debit inventory for $20,000 and credit accounts payable for $20,000 _

7 Accounts payable means we purchase inventory from vendors on an open account, promising to pay at a later date - typically, not longer than 30 days

8 We need to recalculate again, and we see that inventory has increased by $20,000 and accounts payable has also increased by $20,000

1 We are in balance because we have a $20,000 debit and a 520,000 credit

2 We account for it by debiting accounts receivable for $20,000 and crediting sales by

3 We account for it by debiting cost of goods sold for $10,000 and crediting inventory for

4 We debit cash for 520,000 and we credit accounts receivable for $20,000

5 Profitability is what we get after we account for a sale that we have not been paid for, after expenses we may not have paid yet, either

6 If we’re going to stay in business we need more inventory to sell, so we buy $5,000 more in inventory

7 If we only were to purchase everything for cash, and make all of our sales for cash, our cash flow would be closer to our profitability

8 The problem is that inventory purchases and purchases of assets are exchanging one asset for another

1 First, we debit payroll expense for $2,000, then we credit accrued payroll for $2,000

2 Payday might actually be the first day of the month, but the payroll is for the last half of last month

3 Why do an accrual? Well, accountants love when the income for the month is accounted for in the month that it occurred - even if it isn’t paid

4 When we post our end of month payroll, it accrues in one month to be paid in the next

5 Because payroll follows the accrual, only it affects the next month, we need to do a payroll - that is, we need to print paychecks

6 We debit accrued payroll for $2,000 and we credit cash for $2,000

7 We account for thousands of sales, hundreds of inventory purchases, payrolls every week - or as often as we do payroll - and the transactions we do are routine and there are many of them

8 The accounts receivables journal tracks each of our customers, their individual purchases, their open balances and their invoice numbers, and how much is due and when it is due

1 The general ledger shows only how much the balance is in the accounts receivable journal

2 The accounts payable journal tracks each of our suppliers, their open balances and the invoice numbers, how much is owed on each invoice and when it is due

3 The general ledger shows only how much the balance is in the accounts payable journal

4 Journals are important because they track the details of every transaction

5 Accounting is a numerical history of our business The history is called the profit and loss, or the income statement

6 Accounting presents a numerical photograph of our business and its status This numerical photograph is called the balance sheet

7 Accounting is always a two-step process Every transaction has a positive part called a debit and a negative part called a credit Debits and credits offset each other

8 The purpose of accounting is to tell us where we are, and how we got there Without accounting, we are running our business by the scat of our pants

1 Accounting frequently offers the qualified person an opportunity to move ahead quickly in today’s business world

2 Many of the heads of large corporations throughout the world have advanced to their positions from the accounting department

3 In industry, management, government, and business, accountants generally start near the top rather than near the bottom of the organization chart

4 Management relies on the expert knowledge and experience of accountants to cope with the increasingly complex problems of taxes and cash flow

5 Accounting is a basic and vital element in every modem business It records the past growth or decline of the business

6 Careful analysis of these results and trends may suggest the ways in which the business may grow in the future

7 Expansion or reorganization should not be planned without the proper analysis of the accounting information; and new products and the campaigns to advertise and sell them should not be launched without the help of accounting expertise

8 Every new store, school, restaurant, or filling station- indeed, any new enterprise of any kind-increases the demand for accountants

SUGGESTED ANSWERS SECTION 1: TOPIC-BASED PRACTICE EXERCISES

1.2 Match the words/phrases in the box with their definitions There are THREE extra words

1 barrier 2 inward investment 3 forensic accounting

1.3 Use the correct words/phrases in the box to complete the gaps

5 book keeping 6 financial accounting 7 organizations

1 He does not mention in the text

2 He has a qualification in accounting

3.2 Read this email on creative accounting, and then decide if the statements below are true [T]or false [F]

1 Nhân viên kế toán cần giao dịch với khách hàng, vì vậy điều quan trọng là họ phải có kỹ năng quan hệ cũng như kỹ năng về chuyên môn

2 Để hỗ trợ các thành viên của mình, IFAC đặt ra các tiêu chuẩn rõ ràng cho các chương trình giáo dục kể cả giáo dục chuyên nghiệp thường xuyên và học tập dài hạn

3 Công ty bị nghi ngờ là không trung thực trong báo cáo tài chính, vì vậy kế toán pháp lý đã được mời đến để điều tra các giao dịch của công ty

4 Các kế toán viên cần phát triển kỹ năng đánh giá người lao động để đưa ra phản hồi thích hợp cho nhóm mà họ quản lý

5 Những kế toán viên được công ty kế toán tuyển dụng thường làm việc trong các lĩnh vực cụ thể như kiểm toán, thuế hoặc kế toán pháp lý Đương nhiên, mỗi chuyên ngành có những yêu cầu đào tạo khác nhau

1 Strategic and managerial skills can give the big global practices a competitive advantage

2 Emerging markets face challenges to consistency and quality

3 Good training can make a significant difference to competitive advantage

4 With a qualified accountancy profession, developing countries will continue to be able to attract inward investment and aid from agencies

5 IFAC provides a wide range of education programs

UNIT 2: ESTABLISHING THE PROFESSION WORLDWIDE

1 A joint venture 2 A accountancy bodies 3 B chartered accountant

4 C chamber of auditors 5 C Chief Executive

1 shift 2 IFRS 3 employer- led 4 reputation 5 regulator

1 value 2 accounting policies 3.measurement 4.conventions

5 consistency principle 6 disclosed 7 depreciation 8 provisions

1 Financial accounting is the act of accounting for cash, fixed assets, stock, etc whereas management accounting is looking at the effect that has on your business, through such media as profit percentages and under/overspend charts

2 A management accounting system gives information that is used within an organization, by managers and employees

3 A financial accounting system produces financial accounting information that is used by external parties to the organization, such as shareholders, bank and creditors

4 Management accounting helps management to record, plan and control activities and aids the decision making process

5 Financial accounting records the performance of an organization over a defined period and the state of affairs at the end of that period

3.2 Read the bellow text and then decide if the statements below are true [T]or false [F]

IV TRANSLATION: Translate the following sentences into Vietnamese

1 Việc áp dụng tiêu chuẩn báo cáo tài chính quốc tế được kỳ vọng phổ biến hơn trong cộng đồng doanh nghiệp Việt Nam

2 Chuẩn mực báo cáo tài chính quốc tế là một bộ tiêu chuẩn và nguyên tắc dành cho việc lập và trình bày báo cáo tài chính

3 Các công ty ở những nước sử dụng kế toán theo chi phí ban đầu thường không ghi giá trị thị trường dự tính

4 Các giám đốc điều hành cần hiểu rõ những thay đổi về kế toán và báo cáo có thể ảnh hưởng như thế nào đến kết quả tài chính của họ

5 Trong tương lai, nhiều kế toán viên ở các nước đang phát triển sẽ đưa ra những hồ sơ tài chính có tuân thủ các tiêu chuẩn báo cáo tài chính quốc tế

1 International audit standards are proving challenging in developing nations

2 Major function of accounting is measuring and reporting information about how a business has performed

3 Finance processes are being outsourced, so there is an increasing need for common qualifications around the world

4 Financial statements show what has happened in the past and what is going to happen in the future

5 Successful managers make the right decisions that are based on an analysis of accounting data

UNIT 3: INTERNATIONAL FINANCIAL REPORTING STANDARDS

1.1 Choose the following words/expressions with their definitions/explanations

4 Director of External Reporting 5 panic

1 track 2 switchover 3 phase 4 reported 5 ongoing

2.1 Complete the gaps with the correct words/phrases in the box There are four extra words that you do not need

5 annual accounts 6 funded 7 shareholders 8 statements

1 The Ministry of Finance (MoF) is agency that has the draft IFRS roadmap in Vietnam

2 The draft IFRS roadmap published for public in Vietnam on 23 March 2019

3 The implementation of IFRS is divided into three phases by the draft schedule

4 The MoF will make necessary preparations include: publishing the Vietnamese translation of IFRS standards, training, building guidelines for IFRS implementation, etc

5 No, it will not It will apply for SOEs, listed companies and large-scale unlisted public companies

3.2 Read following passage and then decide if the statements below are true [T]or false [F]

1 Các công ty cần thực hiện tất cả các yêu cầu công khai trong tài khoản báo cáo theo chuẩn mực báo cáo tài chính quốc tế (IFRS)

2 Việc thay đổi bộ quy tắc kế toán mới tại các công ty ở Châu Âu phức tạp hơn nhiều so với những gì họ nghĩ ban đầu

Theo dõi các chuẩn mực báo cáo tài chính quốc tế cho phép doanh nghiệp trình bày báo cáo tài chính của họ theo phương thức tương tự như các đối thủ ở nước ngoài, qua đó giúp quá trình so sánh trở nên dễ dàng hơn.

4 Lý do chính khiến các doanh nghiệp không bằng lòng áp dụng các tiêu chuẩn báo cáo tài chính quốc tế (IFRS) là sự khác biệt cơ bản giữa các chuẩn mực kế toán

5 Vì các tiêu chuẩn báo cáo tài chính quốc tế (IFRS) nâng cao tính minh bạch của báo cáo tài chính, nên các ngân hàng và công ty của Việt Nam có thể đạt được sự tin tưởng và uy tín cao hơn từ các nhà đầu tư nước ngoài

1 CEOs have to understand the impact of IFRS on the view of the company's performance from the outside world

2 The financial statements of a company are the most important documents that a company produces

3 Adjusting key accounting policies in order to avoid anomalies in the reported accounts

4 Companies had to assess how they would have to adjust their accounting and reporting processes

5 Changing over required a lot of adjustments to the computer information systems to try to build the final financial statements

1.1 Choose the following words/expressions with their definitions/explanations

1 B liabilities 2 A operating profit 3 D retained earning

1 provisions 2 prepaid expenses 3 balance sheet 4 deposit 5 joint venture

1.3 Use the correct words /phrases in the box to complete the gaps

1 net income 2 intangible assets 3 operating

1 annual report 2 shareholders 3 analysts 4 managed

5 responsibilities 6 external 7 balance sheet 8 equity

3.1 Read the following the balance sheet and answer the questions

1 Total Assets, and Total Liabilities & Shareholders’ Equity

4 The capital the shareholders have paid into the company (Common Stock + Additional Paid-in Capital + Other Equity) = $14,677.24 million, which is greater than the Retained Earnings ($13,561.63 million)

5 The money Google owed at the balance sheet date was $ 2,302.09 million (Total Current Liabilities), Which is less than what it was owed: $2,642.19 million (Total Receivables, Net)

3.2 Read the following passage, and then decide if the statements below are true [T]or false [F]

1 Bảng cân đối kế toán là một trong những công cụ cơ bản của phương pháp phân tích đầu tư chứng khoán Nó giúp xác định giá trị chứng khoán cũng như tiềm năng tăng trưởng

2 Bảng cân đối kế toán cho thấy tài sản và các khoản nợ của công ty tại một thời điểm cố định

3 Báo cáo tài chính là một ghi chép chính thức về các hoạt động tài chính của một doanh nghiệp hoặc một cá nhân nào đó

Ở hầu hết các quốc gia, các công ty thường ghi nhận nguyên giá tài sản của họ, nghĩa là giá mua ban đầu Điều này trái ngược với giá bán hiện tại hoặc chi phí thay thế của tài sản đó.

5 Bảng cân đối kế toán là một báo cáo trình bày giá trị tài sản của một doanh nghiệp, nợ phải trả, nguồn vốn hoặc vốn đầu tư của chủ sở hữu

1 The cash flow statement shows how effectively a company generates and manages cash

2 Cash flow statement gives details of cash flows - money coming into and leaving the business, relating to operations, investing and financing

3 The purpose of credit control is to minimize the funds which a firm has to tie up in debtors, so improving profitability

4 Typical assets listed on the balance sheet include cash, accounts receivable, inventory, supplies, prepaid insurance, land, buildings, equipment, and intangible assets such as goodwill

5 Balance sheet shows us the value of a company at the end of the company’s financial year

1 guidance 2 bearish 3 offset 4 trading update 5 rival

1 job market 2 contraction 3 slumped 4 revenue 5 publishing

2 To have at least 10 percent of its revenues coming from outside Brazil

3 Mostly from farmers in the Amazon rainforest

4 It works with growers who harvest their products in an environmentally sensitive way and it uses biodegradable packing It also has strong corporate values

5 Because it wanted to choose a sophisticated market where people want things to be very good

1 Luật công ty ở Anh và Ủy ban chứng khoán Hoa kỳ yêu cầu các công ty phải công bố bảng cân đối kế toán hàng năm

2 Tại nhiều nước những công ty sử dụng kế toán chi phí ban đầu thường không ghi giá trị thị trường dự tính

3 Nếu công ty cho rằng khoản nợ sẽ không thu lại được, thì theo nguyên tắc thận trọng, họ phải dự tính mất khoản tiền đó

4 Các công ty ở Mỹ và châu Âu thường thể hiện tài sản có bên trái bảng cân đối kế toán; nguồn vốn và tài sản nợ thể hiện bên phải bảng cân đối kế toán

5 Các công ty thành công thường muốn đa dạng hóa: giới thiệu sản phẩm hoặc dịch vụ mới và thâm nhập thị trường mới

1 Companies can hold an emergency general meeting if there is a crisis

2 A company goes bankrupt means that the company is unable to honor its financial obligations or make payment to its creditors

3 To calculate your break-even point, you just have to know your variable costs and your fixed costs

4 The company suffered losses since its revenue was below its debt

5 Shareholders can ask company directors questions about the content of the Annual

Report or the financial statements

1.3 Use the correct words /phrases in the box to complete the gaps

1 market value 2 market volatility 3 capital

1 revenue 2 gross profit 3 overheads 4 interest

5 corporation tax 6 profit after tax 7 retained profit 8 dividends

1 The financial records of a company’s sales, purchasing and cash

2 Because they want to prepare the management accounts

3 The purpose of the management accounts is helping managers to control the business

4 The reason for having the statutory financial accounts is to comply with the law/ meet legal requirements

5 The IFSA is an international accounting organization that tries to create common standards of accounting worldwide

1 Bất kỳ can thiệp nào vào quy tắc kế toán của các chính trị gia sẽ có nguy cơ phá hủy dự án lâu dài hướng tới phát triển một bộ quy tắc kế toán toàn cầu

2 Hoạt động kế toán của các ngân hàng Châu Âu xấu đi do việc nới lỏng các tiêu chuẩn kế toán theo giá trị hợp lý vào cuối năm 2008

Tiêu đề	Tài liệu bổ trợ môn tiếng anh chuyên ngành kế toán
Tác giả	Ngô Thị Hạnh Quyên, Phan Lê Vĩnh Thông
Trường học	Banking University Ho Chi Minh City
Chuyên ngành	Accounting
Thể loại	Supplementary Material
Năm xuất bản	2021
Thành phố	Ho Chi Minh City

Định dạng
Số trang	190
Dung lượng	2,06 MB