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 ACCOUNTANCY IN A FREE-MARKET ECONOMY - English_for_Finance_and_Banking - Studbook
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ACCOUNTANCY IN A FREE-MARKET ECONOMY

 

Ukrainian: What is the role of accountancy in a free-market economy?

American: Well, in a free-market environment, accounting provides sort of vehicle for transmitting information about ·the performance of enterprises to those with an interest in it.

Ukrainian: We know that your accountants communicate financial information to many people. What users need financial information?

American: I’m coming to the point. One branch of accounting, called managerial accounting, provides information that managers use in making decisions within the firm. Other accountants prepare financial reports for outside users. This branch of accounting is known as financial accounting.

Ukrainian: Financial accounting is only making its first steps in our country and we are having lots of teething problems. How does your accounting meet the needs of the users?

American: Our accounting standards and objectives of financial statements fully meet the users’ needs for useful information.

Ukrainian:  What basic principles ensure the provision of such information in the manner the market requires?

American: First of all, accounts must be prepared on a going-concern basic.

Ukrainian: What exactly does it mean?

American: It means accounting is based on the assumption that the business in question· will continue to operate. Besides, accounts must reflect the economic substance of the situation rather than simply its legal form.

Ukrainian: What other characteristics make information useful for the users?

American: I’d single our relevance, timeliness, prudence, reliability, materiality, consistency, and comparability.

 

Vocabulary list:

accountancy – бухгалтерський облік

performance – показники діяльності, результати роботи

fair – чесний, правильний, справедливий

economic status – економічне становище

user – користувач

managerial accounting – управлінський облік

outside user – зовнішній користувач

financial accounting – фінансовий облік

teething problems – проблеми, що виникають на етапі становлення

going-concern basic – принцип працюючого підприємства

assumption – посилання, припущення

economic substance – економічна сутність

characteristics of information – характеристика інформації

relevance – релевантність

timeless – своєчасність

prudence – розсудливість, передбачливість

reliability – надійність

materiality – матеріальність, істотність

consistency – незмінність, спадковість

comparability – порівнюваність

 

2. Read the dialogue, translate the Ukrainian remarks into English and act it out:

 

Foreigner: As far as I know, in the past the major function of your accountants was to control whether enterprises achieved the plan targets. Has the accounting system changed of late?

Ukrainian: Політика економічних реформ викликала необхідність створення ефективної системи бух обліку. У цьому напрямку уже пророблена значна робота.

Foreigner: What accounting principles is your system based on at present?

Ukrainian: Наша система обліку основана на системі подвійного запису. Облік в основному ведеться на основі касового принципу обліку.

Foreigner: Your system seems to be very formalized. It is based on the uniform chart of accounts (план рахунків) and forms of record keeping and reporting (форми обліку та звітності)

Ukrainian: Намагаючись сприяти прямим іноземним інвестиціям шляхом створення спільних підприємств, наш уряд поставив завдання запровадження системи обліку, що співвідноситься з міжнародними стандартами. Була розроблена процедура укладання щорічної фінансової звітності, схвалений план рахунків для сумісних підприємств.

Foreigner: It is also important to recognize that the development of accounting in any country is impossible without developing the accounting profession. Is anything being done in this direction?

Ukrainian: Так, ми розробляємо та запроваджуємо нові стандарти, організовуємо професійну підготовку та перепідготовку бухгалтерів.

Foreigner: I am glad to hear that the full potential of accounting is appreciated in your country now.

 

3. Speak about the work of public accountants, private accountants, and accountants who work for units of the government and non-for-profit firms.

 

B. COMMUNICATIVE SITUATIONS

 

  1. Round-table discussion. The question on agenda: “The role of accountancy in a free-market economy”. Answer such questions:
    • What is managerial accounting?
    • How are accountants classified in Ukraine?
    • What services do public accountants offer their clients?
    • What is done in this country to create a strong and respected professional body of accountants?
    • What do you think of the problem of harmonizing national accounting standards?

 

  1. How is Ukrainian accounting developing? Do any of the Big Eight have offices in Ukraine?

 

  1. Describe the fixed capital and working capital of your institute. List some assets that it owns.

 

 

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