Accountancy profession профессия бухгалтер

Exercise 1.

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

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

2. Sum up the text in 5—7 sentences and present your summary in class.

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

Accountancy Profession

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

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

The size and principles of accountancy vary. Some Organizations comprise accountants working in commerce, industry, and govern­ment organizations, as well as in public practice (auditing), They con-

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sist solely of members in public practice. The main of the accountan­cy profession may be summarized as follows: to protect the public by ensuring the observance by its members the highest of professional and ethical conduct; to promote and increase the knowledge, skills, and proficiency of members of the organization and students; to pre­serve the professional independence of in whatever capacities they may be serving; to maintain the legitimate rights of its.

IFAC was in recognition of the growing changes towards interna­tionalization of the world economy, business and trade.

Words you may need:

Institute of Chartered Accountants Институт дипломированных

бухгалтеров

observance conduct proficiency n соблюдение и поведение, (зд.) опыт

preserve v сохранять

DISCUSSION

Exercise 2.

1. Read the texts and single out the main facts.

2. Present them in a short review and compare the information and viewpoints in Text (a) and Text (b).

a) For many years the accounting system in Russia was criticized by Western academicians for its failure to adhere to Western accounting principles. Such criticism is no longer valid. Since the early 1990s, accounting in the Russian Federation has changed significantly.

The year 1991 was crucial in accounting development in Russia due to the following three events:

Publication of the new Chart of Accounts;

Production of a new set of financial statements similar to those used in Western accounting;

Beginning of preparations for radical change in accounting and auditing regulation.

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In 1992, Regulation on Accounting and Reporting in the Russian Federation was approved by decree of the Government of Russia. The document diminished the control function of accounting and de­clared the following equal objectives of accounting:

Maintenance of control over the availability, movement, and use of material, manpower and monetary resources according to ap­proved norms and estimates;

Provision of full and reliable information about the performance and financial results of an enterprise, which is indispensable for oper­ational management as well as for investors, suppliers, customers and creditors, tax, financial, and bank authorities, and others interested in the financial and business activity of the enterprise.

It would not be an exaggeration to say that an essentially new Rus­sian accounting system has come into being with the introduction of the new Chart of Accounts which includes greater cohesion to inter­national accounting norms.

The essential elements of accounting methodology are as follows:

Documents form the legal foundation for recording transactions according to the approved rules of bookkeeping. No entry should be made unless the bookkeeper has the primary document.

Taking inventory is the sole means of controlling the physical safe­ty of assets and their valuation. It is the main method of supervising persons who are financially responsible for assets. The safeguarding of assets is always entrusted to a financially responsible person.

The uniform Chart of Accounts, which provides the nomenclature of accounts and correspondence among them, must be used by all types of enterprises.

Double entry is a traditional accounting concept that is accepted in Russia as it is in all developed countries.

Internal reporting includes the general ledger, summary (prin­cipal) account registers, primary documents, inventory data, etc. External reporting includes the Balance Sheet, Statement of Fi­nancial ′Results and Their Uses, and supplemental forms that are uniform and obligatory for all types of enterprises. Nonprofit or­ganizations and banks have their own uniform charts of accounts and financial reporting forms. Reporting is carried out according

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to the statutory regulation and presented within strictly prescribed time limits.

Information generated by the accounting system must be timely, reliable, full, accurate, and objective.

Historical cost accounting is the only method of internal and ex­ternal reporting permitted.

приобретения

b) From an international perspective, it is important to remem­ber that while based on similar principles, Russian accounting

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Words you may need:

mere v

Recounting principles valid adj

indispensable adj

Cohesion связь

primary document

taking inventory

sole adj

financially responsible person

nomenclature n

correspondence n

internal reporting

general ledgerглавная

summary account register

inventory data

external reporting

Statement of Financial Results and Their Uses

financial reporting form бланк

historical cost accounting

придерживаться, оставаться верным принципам

принципы бухучета

имеющий силу, юридически действительный

необходимый, незаменимый

первичный документ

инвентаризация

единственный

материально-ответственное лицо

номенклатура (перечень наименований)

корреспонденция (счетов)

внутренняя отчетность

бухгалтерская книга

сводный журнал

инвентарные данные

внешняя отчетность

Отчет о финансовых результатах и их использовании

финансовой отчетности

учет на основе стоимости

does not fully meet international accounting standards (IAS). The main differences are as follows:

Sales are usually recorded on a cash basis. The cost of goods/ services delivered but not yet paid for remains on the balance sheet until payment is received. Most Russian taxes are sales-based. As a result, companies try to minimize sales in their accounts. When sales are recorded on a cash basis, allowances are not made for bad debt, in spite of the fact that bad debts may represent a considerable share of accounts receivable. Sales figures for Russian companies tend to be understated compared with the accrual sales of Western companies.

Cost of goods sold. Russian companies report the full cost of goods sold, which includes production costs, transportation, depre­ciation, marketing, and financial expenses. No cost items are dis­closed separately. Social costs are not included in the cost of goods sold.

Depreciation: Only a straight-line depreciation method is allowed. The depreciation rates are fixed by the government and are as a rule sig­nificantly lower than in the West. Accelerated straight-line depreciation has been permitted since January 1, 1995 but is still rarely used.

Fixed assets. Fixed assets pose the most serious problem. Fixed assets are accounted for at historical cost and cover property, plant and equipment. Land is not treated as a fixed asset and does not ap­pear on the balance sheet at all. Even if depreciation rates are lower than in the West, fixed assets are generally undervalued compared with Western practice.

Accounts receivable. Since most Russian companies record sales when they receive payment, the sales margin is not accrued until that time. Therefore accounts receivable are understated given that the sales margin is not reflected. Overdue accounts receivable are not dis­closed separately.

Consolidation of accounts. Russian companies, including holding companies, are not required to submit consolidated reports. No con­solidation standards have been established yet. Some of the holding companies prepare aggregated reports, summing up 100% of all sub­sidiaries and associates without accounting for intragroup transac-193

tions and minorities. Consequently, the reported results of Russian holding companies are usually significantly overstated.

All other aspects of Russian accounting are basically in line with IAS. The Russian government is taking measures to eliminate the most serious divergences.

Words you may need:

bad debts безнадежные долги

accounts receivable дебиторская задолженность

straight-line depreciation method метод равномерного начисления

износа

Accelerated straight-line метод ускоренного начисления

depreciationmethod износа

sales margin доход от продаж

Overdue adj просроченный

consolidation of accounts консолидация счетов

IAS — international accounting отклонение

standardsdivergence n

DIALOGUE

Public and private accountants

Russian: I’m sure you know that we are engaged in developing the accounting profession in our country at the moment. In this context we would like to know how the members of the accounting profession are classified in your country,

American: They can be classified by the type of organization they work for. The accounting profession in market economy consists of public and private accountants. Public accountants are independent professionals who provide services for a fee. Accountants who are em­ployed by business firms are known as private accountants.

R.: The changes in our economy along market lines have given a boost to the creation of public accounting firms. What forms of busi­ness organization seem preferable to your public accountants?

Am.: Well, some practise alone. Many have formed partnerships with other accountants, and a few have formed professional corpora-194

tions. I’d say that partnerships are the main form of business organi­zation in the accounting profession,

R.: What explains the popularity of the form, from your point of view?

Am.: The answer, surprisingly, is very simple. Public accountants try to avoid limited liability because they believe that professionals should take full responsibility for their judgments.

R.: What does the title certified public accountant imply?

Am.: The title refers to the holder of a license to practise public ac­counting.

R.: We are introducing a similar practice into our life, too. In this connection I’d like to know what bodies in your country are author­ized to grant licenses.

Am.: The license is granted by a state government. But I’d like to stress that the license is granted to people who meet educational and experience requirements and pass an examination. All American cer­tified public accountants are expected to keep their knowledge up to date and to maintain the highest standards of integrity, professional independence and confidentiality. I hope you also try and do your best to keep up high professional standards.

R.: Certainly. For many years our accountants were held in very low esteem in our country, now the situation is changing for the better.

Am.: I’m glad to hear that. What services do your public account­ants offer? I think we have much in common here,

R.: Yes, sure. The main service is auditing. Besides, public ac­counting firms offer consulting services, some accountants are also active in tax planning and preparation of tax returns. And what about your private accountants? Their work must differ greatly from what our accountants employed by business firms do,

Am.: No wonder, you are only entering a market economy. Ac­countants who work for US business firms have wide responsibilities. Their duties include cost accounting, capital budgeting, budgeting for current operations, tax planning, they must know how to design fi­nancial information systems, and do many other things.

R.: I see, we’ll have to go a long way before we create a strong and respected professional body of accountants in Russia.

Am.: But it’s worth while the effort.

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N o t e s:

in the true sense of the word

at a point of time

...will hold at all times

sort of a vehicle for transmitting information

all those concerned

the business in question

It’s worth while the effort.

в истинном смысле слова в определенный период времени ...остается всегда справедливым некое средство передачи информации

все заинтересованные лица

фирма, о которой идет речь; (зд.) данная фирма

Это стоит затрачиваемых усилий.