English_for_Finance_and_Banking
¨ READ AND DISCUSS
1. a) Read the texts and do the tasks that follow.
b) Describe the two main functions of auditing. Discuss how public accountants (auditors) and government auditors perform these functions. Explain the importance of internal auditing.
Audit is an examination of the records and reports of an enterprise by accounting specialists other than those responsible for their preparation. Public auditing by independent accountants has acquired professional status and become increasingly common with the rise of large business units and the separation of ownership from control. The public accountant performs tests to determine whether the management's statements were prepared in accordance with acceptable accounting principles and fairly present the firm's financial position and operating results. Such independent evaluations of management reports are of interest to actual and prospective shareholders, bankers, suppliers, lessors, and government agencies. Generally speaking, auditing has two functions: to reveal undesirable practices and, as far as possible, to prevent their recurring in the future. A relatively new type of auditing is internal auditing. It is designed to evaluate the effectiveness of a business's accounting system. Perhaps the most familiar type of auditing is the administrative audit, or pre-audit, in which individual vouchers, invoices or other documents are investigated for accuracy and proper authorization before they are paid or entered in the books.
In English-speaking countries, public auditors are usually certified, and high standards of professional qualification are encouraged.
Most countries have specific agencies or departments charged with the auditing of their public accounts.
Taxpayers in all countries are interested in the sound management of the collected revenue, they also want to know whether or not the executive branch of government is complying with the law, especially in the area of public finance.
Government auditors are working for sound, economical and efficient financial management, addressing the key problems in the field of public sector auditing, like strengthening the institutions that oversee financial management, changes in the scope and methodology of government auditing, ability to conduct performance audits in public enterprises, strengthening internal auditing in spending units, ex-post external audits of government activities, budget efficiency problems, performance of expenditure programmes.
The advantages accruing from an audit are obvious, taking into account the complexity of present-day commerce and business.
2.a) Supply the prepositions where necessary.
b)Say what the auditors checked during the audit in accordance with the instructions given to them.
Auditors’ Report
We have examined the books, accounts and vouchers relating … the six months ended 30th September … (year) which presented … us. We have made extensive enquiries … the system of internal check … force and are satisfied that it is working efficiently. Particular attention was paid to the methods in force for the authorization of accounts for payment and the handling … cash. The cash balances … the 30th September … (year) were counted and found to be in accordance … the cashier’s books. All bank payments have been verified with the bank statements and certificates of the balances on the accounts obtained … the bankers.
We have checked all cash and bank payments … the receipts and have to report that a number of small payments are unsupported … vouchers. It has been possible, however, to obtain other evidence to show that these disbursements were properly made. The cash books have been cast and all postings … the various ledgers checked … detail.
All invoices … respect of goods purchased and expenses incurred have been examined with the appropriate analysis of books, the totals of which have been checked. Several minor errors were detected which have now been rectified. The postings to the Creditors’ Ledgers have been test-checked, being far too numerous to do in detail. The balances … the individual Creditors’ accounts have been compared with special audit statements obtained from them and found to be … order. Our instructions did not require us to examine the Sales Ledgers and Day Books: we therefore report that in such work as we have performed we found no evidence of, or opportunity … defalcation or fraud.
Words you may need:
voucher – виправдувальний грошовий документ
authorization of accounts for payment – дозвіл на здійснення платежів з рахунків
handling of cash – використання готівки
cash balance – залишок касової готівки
cashier’s book – журнал касових операцій
bank statement – виписка з рахунка
receipt – квитанція
to obtain evidence – отримати доказ
disbursements – виплати
cash book – касова книга, журнал касових операцій
cast – підраховувати, підсумовувати
posting – проводка
ledger – бухгалтерська книга, бухгалтерський регістр
expenses incurred – понесені витрати
detect – виявляти
rectify – виправляти
Creditors’ Ledger – книга кредиторів
test-check – перевіряти за допомогою тестів
audit statement – аудиторський звіт
Sales Ledger – книга обліку продаж
Day Book – книга операцій робочого дня
defalcation – присвоєння чужих грошей
fraud – обман, шахрайство
3.a) Open the brackets putting the verbs in the correct form.
b) Discuss the content of the article.
Misuse of Public Funds
It is a universally accepted truth in Russia that the heads of many public funds habitually (to divert) trillions of rubles away from the stated purpose into lucrative deals for personal gain.
Over the first 10 month of this year, the Accounts Chamber, a watchdog of the State Duma, (to reveal) that nearly 1.8 trillion rubles, were not used for their designated purposes.
The auditors (to find) that nearly every fund was not using its money as it was supposed to. For instance, the Moscow branch of Russia’s Pension Fund (to buy) a building for about 2 billion rubles, (to spend) 11.5 billion rubles on its renovation and repair, and (to pay) another 6 billion rubles to an intermediary for “selecting the building preparing the necessary documents, and obtaining the consent of the parties concerned.” The Pension Fund (to misuse) more than 660 billion rubles despite the fact that people in some regions were left without pension payments for up to three months.
Many public funds (to set) up their own banks with charter capital running into hundreds of billions of rubles.
In spite of the obvious violations of regulations, all these operations cannot be put down as embezzlement without court rulings, and the violators are unlikely to be sued.
Misappropriations from extrabudgetary funds (to encourage) not only by people with a particular mentality and by a lack of adequate actions on the part of law-enforcement agencies, but also by the very system through which financial resources (to flow) from top to bottom. State extrabudgetary funds (to act) as an intermediary that collects payments and remits them to the recipients. Thus, they (to tempt) to “invest” the money in lucrative fast-yielding deals.
There would probably have been fewer cases of embezzlement and misuse of assets if public funds had initially been granted legal rights to earn money by, for example, transacting in securities and foreign-exchange valuables, and making short-term deposits in banks. So far the funds only (to have) a list of operations barred to them.
Words you may need:
misuse – зловживання
universally accepted – загальноприйнятий
habitually – звичайно
divert – відволікати, відводити
lucrative – прибутковий, вигідний
personal gain – особиста вигода
Accounts Chamber – Рахункова палата
designated purposes – вказані (заплановані) цілі
consent – згода
violation – порушення
embezzlement – розтрата
court ruling – постанова суду
sue – шукати в суді, переслідувати в судовому порядку
misappropriation – незаконне присвоєння, розтрата
remit – переводити (засоби)
recipient – одержувач
fast-yielding deals – угоди, що швидко приносять прибуток
valuables – цінності
bar – забороняти
4.a) Supply the articles where necessary.
b) Write down 3-5 questions about the text.
c) Say what you have learned from the text about government auditing in Sweden.
The Swedish National Audit Office (SNAO) is … independent institution for central government auditing and accounting in … Sweden. The main task of … organization is to audit the effective fulfillment of central government goals and commitments. In line with this, the organization analyses revenues and expenditures of … central government, audits central government activities, examines accounts and performance of all government agencies and … public organizations. The SNAO selects independently … agencies and activities to be audited, … auditing methods to be used, … content of the audit reports, as well as the audit statements. All audits are carried out in accordance with generally accepted auditing standards. The audits principally have … control functions, but substantial efforts are also made to ensure that the results of the audit can be used as … basis for improving efficiency and effectiveness. The SNAO also has … task of improving financial management at all levels of … central government, of fostering high standards of financial management leading to the efficient use of central government funds, efficient cash flows and security of the payment system.
The government and … Parliament use the information of the SNAO as a basis for their decisions on … development and transformation of the Swedish public administration. Besides, … government often turns to the SNAO for … comments on measures proposed by different public commissions.
In addition, … SNAO establishes … norms, develops auditing methods, and offers training and advice on issues related to auditing and financial management.
The staff are recruited on … basis of educational qualification and … professional ability. Almost 95 per cent of the professional staff hold high professional qualifications.
Central government appropriations finance some fifty per cent of … organization’s activity and the remaining activities are free-financed. The SNAO is … active member of INTOSAI (the International Organization for Supreme Audit Institutions) and its European equivalent EUROSAI (the European Organization for Supreme Audit Institutions).
Words you may need:
Swedish National Audit Office – Державна ревізійна служба Швеції
foster – сприяти, заохочувати
cash flow – потік готівкових засобів
public administration – управління на державному та місцевому рівнях
appropriation – асигнування
free-financed – на госпрозрахунку
INTOSAI – Міжнародна організація вищих контрольних органів
EUROSAI – Європейська організація вищих контрольних органів
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