MY SPECIALITY. ACCOUNTING AND AUDIT

Lead-in:

1. stockholders – акціонери, власники акцій

2. consumers and suppliers – споживачи і постачальники

3. performance of the company – стан, робота компанії

4. earnings and expenditures – дохід і витрати

5. payroll record –платіжна відомість

6. ledger – головна книга, гросбух

7. to oversee –стежити

8. instigator of malpractice –підбурювач службового злочину

9. internal and external audit – внутрішній та зовнішній аудит

I am a student of the Faculty of Accounting and Finance at Donetsk National University of Economics and Trade and I am majoring in accounting. No doubt my specialty is in great demand nowadays, because accounting is needed in any society and is not confined to “capitalist” or “mixed” economies.

Our faculty trains specialists in the following specialities and specializations: “Accounting and Audit”, “Finance and Credit”, “Banking”. We study the following disciplines: the theory of book-keeping, book-keeping of foreign economic activities, accounting, analysis and audit in the sphere of national economy.

So, what specifically is accounting? Accounting contains elements both of science and art. The important thing is that it is not merely a collection of arithmetical techniques but a set of complex processes depending on and prepared for people, because most accounting reports depend on people’s opinions. Accounting reports are prepared in order to help people make decisions. It is difficult to find an all-inclusive definition but we can say that accounting is concerned with the provision of information in financial terms. Provision of information includes recording, classifying, summarizing, and interpreting of financial events and transactions.

Accounting information can be divided into two categories: financial accounting or public information and managerial accounting or private information. Financial accounting provides information to external decision-makers: stockholders, creditors, customers, suppliers. As for managerial accounting it provides information for internal decision-makers (managers), who need this information to know what the performance of the company was like in the past and what can be done about making current and future decisions. Book-keeping is part of accounting and it involves the recording of economic activities of the company. At the end of each period the information of Journals is introduced into the Ledger, that shows all the earnings and the expenditures of the company and on the basis of all the totals book-keepers prepare a Trial Balance.

Accounting documents include the following: sales documents (cash receipts, invoices), purchasing documents, payroll records, bank documents etc. We must say that an auditor’s role is very often confused with that of an accountant. There are three main roles of auditors: they are responsible for overseeinga company’s finances, responsible for informing authorities of malpractice and they must track down the instigators of malpractice.

There are internalauditors (accountants of the same company who evaluate the company’s financial records) andexternal, or independent auditors, who perform outside audit. Upon completion of the audit they submit a document called Auditor’s Report or Auditor’s Opinion. In conclusion we can say that there are many challenges to representatives of the accounting and auditing profession, but the role of accountants and auditors in controlling a complex process of financial activities is really significant.

Ø Questions for comprehension check-up and discussion:

1. What is accounting concerned with?

2. How many categories can accounting information be divided into?

3. Is there any difference between managerial accounting and financial accounting?

4. What does book-keeping involve?

5. Can you give examples of the main documents that book-keepers have to prepare?

6. What are the three main roles of auditors?

7. Do you think the role of Auditor’s Report is important for the performance of any company?