Exercise 17. Choose the correct explanation without using a glossary. Exercise 19. Single out the main facts of the article and present them in a short review. Exercise 18. Reread the article more carefully and complete the sentences given below using inf

 

1. “to begin something; to engage in an enterprise” is …

а) to embank

b) to embrace

c) to embark

 

2. “including much; inclusive” is …

a) comprehensive

b) contradictory

c) initial

3. “very deep or low” is …

a) wholesale

b) profound

c) inclusive

 

 

4. “to deny the existence or truth” is …

a) to negate

b) to negotiate

c) to exclude

 

5. “declared by statute to be such, and hence legally punishable’ is …

a) statutory

b) marginal

c) wholesale

 

6. “to unite or combine into a single whole; to include; to embody” is …

a) to incorporate

b) to combat

c) to conclude

 

7. “at, on or close to the border; close to a limit” is …

a) marketable

b) marginal

c) marital

 

8. “the act of permitting, admitting, etc.” is …

a) combination

b) conclusion

c) allowance

 

9. “indicating or occurring in the beginning” is …

a) initial

b) inherent

c) comprehensive

 

10. “extensive, sweeping or indiscriminate” is …

a) whole-some

b) wholesale

c) profound

 

Exercise 18. Reread the article more carefully and complete the sentences given below using information from the article (of ex.16):

 

1. In 1985, the government of Jamaica embarked on _____________________

______________________________________________________________ .

 

2. The reforms of the personal income tax were particularly ________________

______________________________________________________________ .

 

3. A complicated, narrowly-based individual income tax levied under a progressive statutory rate was rep _______________________________________

______________________________________________________________ .

 

4. Before the reform, the highest marginal tax rate of 60 per cent (including payroll taxes) was reached at the relatively low annual income level of ___________________________________

____________________________________________________________ .

 

5. Under the reformed system, the complex rate structure was replaced with _________________________; the 16 tax credits were replaced with ___________________________________________; most non-taxable allowances were incorporated ____________________________; and interest income was included in _______________________.

 

6. Initial results suggested that the combination of a higher standard deduction, a broadened base, and a lower flat rate _____________________________________

___________________________________________________________ .

 

7. The government of Indonesia adopted a major tax reform in ___________ .

 

8. Before 1983, numerous incentives in the investment code were designed to favor ____________________________________________________________ .

 

9. Tax reform eliminated nearly all special tax incentives, allowing the company tax rate _________________________________________________________ .

 

10. The simplified incentive system was intended to ____________________

________________________________________________________________________________________________________________________________________________.

 

Exercise 19. Single out the main facts of the article and present them in a short review.

 

LESSON 3

 

Exercise 1. Read and discuss the text that follows. Use the vocabulary given after it.

Performing an audit

 

Auditing is a process in which an independent accountant-auditor examines a firm’s accounting records and financial statements and offers an opinion on their accuracy and reliability.

There are different types of audits, for example, financial statements audits, income tax audits, “value for money” audits, environmental audits, administrative audits, financial management audits, etc.

The accountancy profession has built up a significant amount of expertise in performing financial statements audits.

Accounts audits were established as an instrument to protect third parties, the users of accounts, since the auditor’s opinion helps establish credibility of financial statements.

Special bodies of users, such as supervisory boards, employee representatives, government agencies may sometimes need an indepth audit report, which is usually confidential.

It should be stressed that auditors do not monitor, they offer an opinion, and the audit process and audit procedures are complicate and manifold. The auditor’s opinion is gradually being built up from a mass of detailed work to the final judgment through the planning and testing stages. The auditor normally starts with a study of the business environment the audited company is working in and performs a preliminary analytical review.

Then he should direct his attention to the financial statements. Interestingly enough, however, the auditor’s attention is not directed towards the financial statements’ elements as such, but towards the correctness of various assumptions made by the management for their preparation. For instance, the auditor needs to know if figures are complete and accurate and reflect what they should reflect, if income and expenses are recorded in the proper periods and if the legal position is reflected adequately.

The auditor should focus on any misstatement whether it is intentional or unintentional. The management is responsible for the reliability of financial information. If the management is not prepared to take the responsibility it may be hard to complete the audit. In such situations the auditor should seek his own evidence by means of independent audit procedures.

Although the financial statements are the ultimate objectives of an audit, normally such audits cannot be completed without a proper study and evaluations of the accounting system and assessment of the internal accounting controls.

Defining the audit strategy the auditor has to decide whether to rely on internal controls or to resort to substantive testing applying analytical review procedures, such as tests in totals, comparison with budgets or even statistical analysis of figures.

In the planning stage as well as during the performance of audit procedures and, finally, in forming conclusions, “materiality” and “audit risk” are critical elements in the auditor’s judgment. “Materiality” refers to the magnitude or nature of a misstatement (including an omission) of financial information.

“Audit risk” (including three different components-inherent risk, control risk, detection risk) is the risk that an auditor may give an inappropriate opinion on financial information that is materially misstated.

The natural finalization of the audit process is the auditor’s report, reflecting the auditor’s opinion on the financial statements. Unfortunately, audits do not always end up in an approval of the financial statements. Any deviation from the unqualified opinion should be explained in the auditor’s report, including the uncertainty or the disagreement that caused the auditor to qualify his opinion.

In order to protect the public interests and the profession’s integrity an individual must be sufficiently educated and adequately trained before being certified to act as an auditor.

Below you will find a sample of an auditor’s opinion:

 

To the Shareholders of … Ltd.:

We have audited the accompanying balance sheet of …Ltd. As of 31 December … and related statement of income for the year then ended.

Our audit was conducted in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances to establish whether the balance sheet and related statement complied with Russian regulations and were in agreement with the underlying accounting records.

In our opinion, the balance sheet and related statement of income of … Ltd. referred to above have been prepared in compliance with the relevant Russian regulations and are in agreement with the underlying accounting records.

Moscow,

24March…

 

VOCABULARY

 

Auditing                                            аудит

Auditor                                             аудитор

To examine                                        проверять, проводить ревизию

Accounting records                           документы учета

Financial statements                          финансовая отчетность

To offer an opinion                           сделать заключение

Accuracy                                           точность

Reliability                                          достоверность, надежность

Audit                                                 аудит, аудиторская проверка, ревизия

To build up                                        наращивать, накапливать

Account(s) audit                               аудит счетов, ревизия счетов

Auditor’s opinion                              заключение аудитора, аудиторское заключение

Credibility                                         вероятность, правдоподобие, достоверность

Supervisory board                             наблюдательный совет

Government agency                          ведомство, правительственная организация

Indepth audit report                          детальный аудиторский отчет

Audit process                                    процесс проведения аудиторской проверки

Audit procedures                                          методика проведения ревизии/аудиторской проверки

Manifold                                           разнообразный, разносторонний

Judgment                                          суждение, оценка

Planning stage                                   стадия (этап) планирования (аудиторской проверки)

Testing stage                                     стадия (этап) проверки

Audited company                             проверяемая компания

Preliminary analytical review            предварительный анализ финансово-хозяйственной деятельности

Assumption                                       допущение, предпосылка,

                                              предположение

Complete figures                               полные данные

Accurate figures                                точные данные

…should focus on any misstatement следует обращать внимание на любое искажение

...whether it is intentional                 независимо от того, является ли оно

or unintentional                                 преднамеренным или непреднамеренным

…that caused the auditor to qualify которые заставили аудитора внести

hisopinion                                     оговорки в свое заключение (выразить особое мнение)

To record                                           регистрировать, записывать, отражать

Proper period                                    надлежащий период

Legal position                                   юридическое положение, юридический статус

Misstatement                                     сообщение неверных (неправильных) сведений, искажение сведений

(Un)intentional                                  непреднамеренный

To take the responsibility                  брать (на себя) ответственность

To complete the audit                       завершить аудиторскую проверку

To seek evidence                               искать доказательства

Ultimate objective                             конечная цель

Evaluation                                         оценка

Substantive test(ing)                         независимая проверка

Tests in totals                                    проверка итоговых чисел

To form a conclusion                        сделать вывод

Materiality                                         «существенность» (искажения)

Audit risk                                          риск некачественного контроля

Critical                                              (зд.) решающий

Magnitude                                         величина, размер

Omission                                           пропуск

Inherent risk                                      (зд.) присущий (виду деятельности) риск

Control risk                                       риск контроля

Detection risk                                    риск (не)обнаружения

Approval of the financial statement подтверждение финансовой отчетности 

Deviation                                          отклонение

Unqualified opinion                          безусловное мнение (оценка, заключение)

To qualify the opinion                       дать аудиторское заключение с оговорками

Integrity                                            добросовестность, профессиональная честность

To certify                                          выдавать свидетельство

To audit                                             проводить аудиторскую проверку

Accompanying                                  прилагаемый

Balance sheet                                    балансовый отчет

The related statement of income       соответствующий отчет о прибылях и убытках

To conduct an audit                          проводить аудиторскую проверку

Generally accepted auditing standards общепринятые стандарты аудита 

Accordingly                                      соответственно

In the circumstances                         в данных обстоятельствах

To comply with regulations              соответствовать требованиям, правилам и т.д.

In agreement with                             в соответствии с

Underlying                                        лежащий в основе

In compliance with                           в соответствии с

Relevant                                            уместный, относящийся к делу

 

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