value of the liabilities plus the equity plus the income. This is just another way of

saying the same thing. However it is helpful to express it in this way when we

come to consider the practice of book-keeping below.

The income statement is commonly divided into two sections in a similar fashion

to the balance sheet. One section shows the total income and the other section


shows the total expenses. Like the balance sheet each section will be broken down

into more or less detail depending on its intended use. However unlike the balance

sheet the totals of each of the two sections are unlikely to be the same. The

difference will usually be shown as a separate item at the bottom of the income

statement and if the total income exceeds the total expenses it will be given a title

such as retained earnings, net profit or excess of income over expenditure. If the

total expenses exceed the total income it will instead be called something like

retained loss, net loss or excess of expenditure over income.

Income and expenses are financial measurements that relate to the performance of

a business during a specified period of time. For this reason the income statement

is also known as the statement of financial performance. It describes the

performance of a business during a specified period. It is sometimes also referred

to as the profit and loss statement.

In order to produce a balance sheet or an income statement it is necessary to have a

systematic method of recording all the activities or events that have an effect on

the financial measurements (A, L, P, I and E) described above. Traditionally these

events were entered by hand into a set of books or accounts. More recently it has

become common practice to enter these into a computer accounting system. Each

entry is referred to as an entry and the practice of maintaining these entries in the

accounts is referred to as book-keeping. The act of placing a particular entry into

an account is known as posting. The total of all the entries in an account is known

as the balance of that account. The accounts themselves are referred to collectively

as the general ledger or sometimes just the ledger.

Because each business will have different assets, liabilities, income, expenses and

equity categories the accounts it uses to record its activities will vary from one

business to another. This set of accounts that a business creates in the general

ledger is known as the chart of accounts.

Each account in the ledger will be categorized into one of the five types of

financial measurements described above (A, L, P, I or E.) Because the accounting

equation A + E = L + P + I.

is always true the total of all the A and E account balances in the ledger must be

equal to the total of all the L, P and I account balances if the ledger is to represent a

logically correct picture of the finances of the business. If this is the case then we

say that the accounts are in balance or that the ledger is in balance. For the ledger

to remain in balance whenever an entry is posted to an account matching account

entries must be posted at the same time to ensure that the total of the A and E

account balances remain the same as the total of the L, P and I account balances.

For this reason book-keeping is often referred to as double-entry book-keeping.

Most postings consist of two entries but there is no reason why there cannot be

three or more entries posted at the same time provided that the ledger remains in

balance.

Traditionally a report was prepared showing the total of the A and E account

balances and the total of the L, P and I account balances to ensure that these totals

were the same. This report was known as a trial balance. Because most computer

accounting systems will not allow entries to be posted unless the accounts remain

in balance this has in many ways obviated the need for a trial balance.

An entry that increases the balance of an A or E account or reduces the balance of

an L, P or I account is known as a debit. An entry that reduces the balance of an A

or E account or increases the balance of an L, P or I account is referred to as a

---

credit. Traditionally hand-written books were divided into two columns. Debits

were entered into the left-hand column and credits into the right. In fact the

traditional definition of a debit is an entry on the left-hand side of an account.

Conversely a credit was defined as an entry on the right-hand side of an account. In

order for the ledger to remain in balance the total debits must equal the total

credits.

It is interesting to note that neither of these definitions of debit and credit are

intuitive or immediately obvious. Neither can they be deduced easily from their

commonly understood meanings. This partly explains why students who are

learning accounting for the first time have difficulty understanding the meaning of

debits and credits. The traditional definitions come from the commonly established

practice of manual double-entry book-keeping that puts debits on the left and

credits on the right.

It is worthwhile repeating the more precise definitions of debit and credit given

above as they are derived from the accounting equation since familiarity with them

is essential for a proper application of accounting practice to the process of setting

up and maintaining a general ledger.

A debit is an entry in a general ledger account that increases its balance if it is an A

or E account and reduces its balance if it is an L, P or I account.

A credit is an entry in a general ledger account that reduces its balance if it is an A

or E account and increases its balance if it is an L, P or I account.
3. Ответьте на вопросы, используя текст:


1. Who invented the basic concepts of modern accounting?


2. What does the process of accounting imply?


3. What does the assets mean?


4. What are the liabilities of a business?


5. What is the equity?


6. What is a balance sheet?


7. What is the income of a business?


8. What are the expenses of a business?


9. What is the income statement?


10. What is a debit?


11. What is a credit?

Тема 4: «Auditing. Introduction». (Аудит. Введение).6

1. Запишите новые ЛЕ в рабочую тетрадь:
quote - выдержка, цитата

sum up -резюмировать; суммировать; реферировать, обобщать; подводить

итог; конспектировать

records - документы, записи

activity - 1) деятельность; 2) активность, оживление (спроса, рынка)

transaction - 1) дело, сделка; 2) операция (торговая); 3) ведение дел

to recount - рассказывать, излагать подробно

obligation - обязательство, долг, обязанность

to be bound - быть обязанным

objectively - объективно, реально, действительно;

obtaining - получение, достижение

evaluating - оценивание

evidence - 1) основание; 2) данные, факты; 3) доказательство

regarding - относительно, касательно

assertion - утверждение, отстаивание (прав, претензий)

to ascertain - 1) устанавливать; определять;2) индивидуализировать (о

продаваемом товаре)

established - 1) учрежденный; установленный; 2) признанный

criteria -критерии

to communicate -сообщать, передавать (to)

haphazard -1) случайный; 2) бессистемный

manner - 1) способ, метод; 2) образ действий

reasoning - 1) продуманность; 2) рассуждение; 3) умозаключение

---

to embody - 1) воплощать в жизнь, олицетворять, заключать в себе,

содержать; 2) объединяться

in accordance with - согласуясь с (чем-л.), в соответствии с (чем-л.)

consequently - следовательно, поэтому, в результате, вследствие

to determine - определять, устанавливать

to meet (met, met) - 1) встречать(ся); 2) столкнуться (с) (with); 3)

удовлетворять, отвечать

findings - полученные данные, добытые сведения

to issue - 1) выпускать в обращение, издавать; 2) выписывать; 3) выставлять

audit report -отчет о результатах аудита

scope - 1) размах, охват; 2) сфера (деятельности); 3) пределы; рамки,

границы; 4) масштаб

consistent - 1) последовательный; 2) стойкий; 3) совместимый;

согласующийся

basis - базис, основа; основание

2. Прочитайте и переведите текст:
"In God we trust, all others we audit". This quote sums up a basic viewpoint of

some professionals towards auditing. Auditing has existed in one form or another

since ancient times. Records show that auditing activity was part of early life in

Babylonia, China, Greece, and Rome. One ancient meaning for the word "auditor"

was a ''hearer or listener". In Rome, auditors heard transactions as they took place.

They observed the events as they happened and were able to recount the

responsibilities and obligations to which each party was bound.

Modern auditing, as defined by the American Accounting Association, is a

systematic process of objectively obtaining and evaluating evidence regarding

assertions about economic actions and events to ascertain the degree of

correspondence between those assertions and established criteria and

communicating the results to interested users.

An examination of the definition of auditing reveals that there are three key aspects

of the definition. First, auditing is not an activity which can be performed in a

haphazard manner, it is a systematic process based on logic and reasoning.

Second, during an examination of financial statements the auditor objectively

obtains and evaluates evidence regarding assertions about economic actions and

events embodied in the financial statements to ascertain the degree of

correspondence between those assertions and established criteria. In the audit of

financial statements prepared by a company, the established criteria are generally

accepted accounting principles (GAAP). That is, the financial statements must be

prepared in accordance with GAAP. Consequently, the auditor must obtain and

evaluate evidence to determine whether the assertions (the elements of the

financial statements) meet the established criteria (GAAP).

The third and final key aspect of the definition is that auditing involves

communicating the results of the audit to interested users. The auditor

communicates the findings of the audit process by issuing an audit report. In the

audit report, the auditor gives an opinion as to whether the assertions are reported

in accordance with the established criteria. For example, in the audit of financial

statements the auditor issues an audit report which describes the scope of the

examination in the first paragraph and states in the last paragraph whether in his or

her opinion the financial statements are fairly presented in accordance with

generally accepted accounting principles applied on a consistent basis.
3. Ответьте на вопросы, используя текст:


1. What did auditors do in the ancient Rome?


2. What is the essence of the modern auditing?

---

3. What are the three key aspects of the definition of auditing?

Тема 5: «Financial Audit». (Финансовый аудит).3

1. Запишите новые ЛЕ в рабочую тетрадь:
financial audit - финансовый аудит

stakeholder - заинтересованная сторона, заинтересованное лицо

regulator - сотрудник регулятивного органа

"attest" function - деятельность по подтверждению

assurance - заверение, уверение

audit report - отчет о результатах аудита

fairly - должным образом

in conformity with - в соответствии с

fraud - обман; мошенничество

to assess - определять; оценивать

internal control - внутренний контроль

magnitude - 1) величина, размеры; 2) значение

external auditor - внешний аудитор

to attest - давать свидетельские показания, заверять, засвидетельствовать

2. Прочитайте и переведите текст:
A financial audit is the examination of financial records and reports of a company

or organisation, in order to verify that the figures in the financial reports are

relevant, accurate, and complete. The general focus is to ensure the reported

financial statements fairly represent a company's stated condition for the firm's

stakeholders. These stakeholders will be interested parties, such as stockholders,

employees, regulators, and the like.

Doing a financial audit is called the "attest" function. The general purpose is for an

independent party (the CPA firm) to provide written assurance (the audit report)

that financial reports are "fairly presented in conformity with generally accepted

accounting principles".

Because of major accounting scandals (failure by CPA firms to detect widespread

fraud), assessing internal control procedures has increased in magnitude as a part

of financial audits.

Financial audits are typically done by external auditors (accountancy firms). Many

organizations, including most very large organizations, also employ or hire internal

auditors, who do not attest to financial reports. Internal auditors often assist

external auditors, and, in theory, since both do internal control work, their efforts

should be coordinated.

3. Ответьте на вопросы, используя текст:


1. What is a financial audit?


2. What is the general purpose of audit?


3. Who typically does financial audits?

Тема 6: «Process of Audit». (Процесс аудита).6
1. Запишите новые ЛЕ в рабочую тетрадь:
interim - промежуточный, предварительный

review - обзор, проверка, ревизия

sales representative - 1) торговый представитель; 2) агент по продаже товаров;

3) комиссионер

to overstate - 1) завышать (цены); 2) преувеличивать

to assess - 1) определять; оценивать; 2) облагать (налогом)

inventory - опись, список, реестр

hard - 1) твердый, крепкий; 2) тяжелый, трудный; 3) настойчивый, упорный

close - 1) близкий (о времени и месте); 2) закрытие бухгалтерских книг

rationale - обоснование

revenue - доход , выручка

2. Прочитайте и переведите текст:

---

A financial audit is usually done annually through 3 main steps.

1. Interim review.

This is the first approach to the company. It usually covers the first half of the

financial year. For instance, if a company closes its accounts yearly on December

31, the interim review will cover January to June.

The purpose is to understand the business of the company, the environment in

which it operates (this includes aspects such as competition, legal requirements,

economy, etc), what its main issues are to figure out what audit risks are from an

audit point of view. This means, auditors will have to find what kind of mistake

(on purpose or not) could be done in this company. For instance, if the income of

sales representatives is directly linked to the sales they generate (it's of course

never the case), they could try to overstate their figures, leading to an abnormally

high income. To assess the internal control procedures (checks on the firms

internal processes, such as inventory) actually in place. This is an important step as

it will allow later to determine if one should carry out basic or advanced

investigations. Indeed, if the internal control procedures seem to be reliable, this

means there is no need to check accounts further.

2. Hard close.

This audit precedes the closing date. For a company closing on December 31, the

Hard Close would typically occur using numbers as of November 30. Note: some

hard closes are performed using the numbers as of the preceding quarter end (i.e. in

the above example as of September 30). The purpose is to audit all movements

year to date. This audit step is not on the audit during Final.

3. Final.

This is the latest step of the audit, usually some weeks after the closing. Thanks to

the work already done during the Hard Close, only the remaining range between

the date of the Hard Close and the closing has to be audited.

RATIONALE FOR AUDITING

Audit has some specific features throughout the world but has some main

components. One of the main problems in audit is the conflict between the need to

control a company and the business relationship. On the one hand, the audit

company has to thoroughly check the books, but on the other hand, it has to keep

its customer that is its source of revenue. In practical terms, this means that the

audit company will try to protect itself by carrying out the minimum checks, but if

it has a slight doubt, it won't go further if the client is a bit reluctant to give out

information.

3. Ответьте на вопросы, используя текст:


1. What are the three main steps of financial audit?


2. What is the purpose of the interim review?

3. Describe the audit step called “hard close”.


4. What is the latest step of the audit?


5. What are the main problems in audit?

Тема 7: «Tax»(Налоги).6

1. Запишите новые ЛЕ в рабочую тетрадь:
compulsory - принудительный, обязательный

charge - 1) сбор, поступления, отчисления; цена; комиссия (за услуги); плата;

2) занесение [запись] на счет; запись в долг, долг; дебетовая запись, запись по

дебету (счета по учету расходов)

levy - 1) сбор; 2) налог; 3) взимание (налогов); 4) обложение (налогами)

to impose - 1) облагать; 2) налагать (обязательство); 3) навязывать; 4)

обманывать

secessionist - отступник, раскольник; сепаратист

movement - 1) движение; 2) перемещение, передвижение; 3) действия; 4)

поведение

corvee - 1) барщина; 2) рабский труд, тяжелая работа

labor - труд, работа

in kind - натуральный (в форме товаров или услуг, а не денег)

---

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