Accounting and Auduting = Бухгалтерский учет и аудит

ACCOUNTING 
and
AUDITING
________________________

БУХГАЛТЕРСКИЙ УЧЕТ
и
АУДИТ

Методическое пособие

для магистрантов

Москва
Издательство «ФЛИНТА»
2022

Министерство науки и высшего образования Российской Федерации
ФГБОУ ВО «Сочинский государственный университет»

УДК 811.111(072)
ББК  81.432.1я73
         А93

Р е ц е н з е н т 
канд. филол. наук, доцент кафедры иностранных языков СГУ В.В. Сиганова

С о с т а в и т е л и:
доцент Н.С. Кресова; доцент С.Э. Кегеян   

Предлагаемое пособие для практических аудиторных занятий и самостоятельной работы по английскому языку ставит своей целью формирование навыков 
различных видов чтения профессионально ориентированных текстов, изучение 
студентами специальной, узкопрофессиональной лексики, закрепление и развитие 
языковых навыков и умений, развитие умения сделать устное высказывание по 
теме специальности, формирование навыков реферирования и аннотирования 
оригинальных текстов по специальности.

Предназначено для магистрантов направления 38.04.01 «Экономика».

УДК 811.111(072)
ББК 81.432.1я73

Учебное издание

ACCOUNTING and AUDITING
_________________________________________________

БУХГАЛТЕРСКИЙ УЧЕТ и АУДИТ

Методическое пособие для магистрантов

Составители:
Кресова Наталья Станиславовна
Кегеян Светлана Эриховна

В авторской редакции 

Подписано к выпуску 13.04.2022. Формат 60×88/16.
Уч.-изд. л. 4,8.
Электронное издание для распространения через Интернет.

ООО «ФЛИНТА», 117342, г. Москва, ул. Бутлерова, д. 17-Б, офис 324.
Тел.: (495) 334-82-65, 336-03-11. 
E-mail: flinta@mail.ru; WebSite: www.flinta.ru

ISBN 978-5-9765-4918-0
© ФГБОУ ВО «СГУ», 2022
© Кресова Н. С., Кегеян С.Э., составление, 2022
© Издательство «ФЛИНТА», 2022

    Accounting and Auduting = Бухгалтерский учет и аудит : методическое 
пособие / сост. Н.С. Кресова, С.Э. Кегеян. — Москва : ФЛИНТА, 2022. — 124 с. 
— ISBN 978-5-9765-4918-0. — Текст : электронный.

А93

HISTORY OF ACCOUNTING 
 
Accounting has been called ‘the language of business’. Perhaps a better 
term is the ‘language of financial decisions’. The better you understand the 
language. The better you can manage the financial aspects of living. 
Accounting has a long history. Some scholars claim that writing arose in 
order to record accounting information. Account records date back to the ancient 
civilisations of China, Babylonia, Greece, and Egypt. The rulers of these 
civilisations used accounting to keep track of the cost of labour and materials 
used in building structures like the great pyramids. 
Accounting developed further as a result of the information needs of merchants in the city-states of Italy during the 1400s. In that commercial climate the 
monk Luca Pacioli, a mathematician and friend of Leonardo da Vinci, published 
the first known description of double-entry bookkeeping in 1494.  
The double-entry accounting system -- in which for every ‘debet dare’ 
there is a ‘debet habere’ – has evolved to the point where it is very much like the 
present day system. Debet dare and debet habere are Latin terms meaning 
‘should give’ and ‘should have’ respectively. 
The pace of accounting development increased during the Industrial 
Revolution as the economies of developed countries began to mass-produce 
goods. Until that time, merchandise had been priced based on managers' 
hunches about cost, but increased competition required merchants to adopt more 
sophisticated accounting systems. 
In the nineteenth century, the growth of corporations, especially those in 
the railroad and steel industries, spurred the development of accounting. 
Corporation owners—the stockholders—were no longer necessarily the 
managers of their business. Managers had to create accounting systems to report 
to the owners how well their businesses were doing. 
The role of government has led to still more accounting developments. When 
the federal government started the income tax, accounting supplied the concept of 
"income." Also, government at all levels has assumed expanded roles in health, 
education, labour, and economic planning. To ensure that the information that it 
uses to make decisions is reliable, the government has required strict accountability 
and compliance with standards in the business community. 
Accounting standards may be defined as «... uniform rules for external 
financial reporting applicable either to all or to a certain class of entity». 
Accounting standards may be viewed as a method of resolving potential 
conflicts of interests between the various user groups which have access to 
company accounts. The various groups have different objectives, information 
needs, and capacities for the generation and interpretation of information and, 
therefore conflicts may arise between groups outside the entity. It is a role of 
accounting standards to attempt to reconcile the conflicts. A number of 
important issues for the accounting profession should be mentioned here. These 
issues are as follows:  

- Reliability.         Accounting information should be reliable in use. 
- Uniformity.     The pressure for the standardization of accounting 
practices is to ensure a uniformity of treatment of data and hence an identity of 
the meaning of information. 
- Comparability.  Reliability and uniformity are integrated in the notion of 
comparability. 
- Judgment.  Accountants say that they should be allowed to exercise some 
judgment in interpreting data. This implies that some variety should be allowed 
for in the procedures available for transforming data into information. 
Accounting practice and financial reporting regulation have shown great variety 
internationally. In recent years there has been growing interest in the harmonization 
of international accounting. Factors which have stimulated the movement towards 
harmonization have included the increasing internationalization of business, the 
importance of multinational companies in the world economy, and the development 
of international capital markets. In 1973 the International Accounting Standards 
Committee (IASC) was established in an attempt to coordinate the development of 
accounting standards internationally. 
 
I. Answer the following questions: 

1. Why has accounting been called “the language of business”? 
2. What do some scholars claim? 
3. Why did accounting develop further? 
4. What do debet dare and debet habere mean? 
5. Why did the pace of accounting development increase during the 
Industrial Revolution? 
6. What spurred the development of accounting in the 19-th century? 
7. Why did managers have to create accounting systems? 
8. What has the role of government led to? 
9. Why has the government required strict accountability and compliance 
with standards in the business community? 
10. How may accounting standards be defined? 
11. Why may accounting standards be viewed as a method of resolving 
potential conflicts of interest? 
12. What are the most important issues for the accounting profession? 
 
II. Give Russian equivalents to the following words and words 
combinations 
 
Accounting, to manage the financial aspects of living, to record the 
accounting information, to date back,  double-entry accounting system, debet 
dare, debet habere, to mass-produce goods, to adopt more sophisticated 
accounting systems, to report to the owners, to make decisions, accounting 
standards, interpretation of information, reliability, uniformity. 
 

III. Find English equivalents for the following words and word 
combinations in the text 
 
утверждать, проследить, купец, первое известное описание, система 
бухгалтерского учета по системе двойной записи, соответственно, темп 
развития отчетности, промышленная революция, интуиция управляющих, 
подгонять развитие отчетности, акционеры, подоходный налог, принимать 
на себя, подотчетность, соответствие, подходящий, метод решения 
возможных конфликтов интересов, конфликты могут возникать, улаживать 
конфликты, обеспечивать единообразие обработки данных, подразумевать,  
движение в сторону согласованности. 
 
IV. Translate the following sentences into Russian paying special 
attention to the words in bold  
1. The money that a business spends in order to produce goods or services 
is its costs. 
2. Fixed costs do not vary in relation to the output level of goods or 
services; variable costs do.  
3. Direct costs are directly related to the things produced. In manufacturing, for 
example, direct costs include raw materials and wages and indirect costs may 
include things like social security charges on top of the wages. 
4. Overhead costs or overheads are used to mean different things, but 
usually cover all the regular non-production costs of running a business, such as 
salaries and telephone bills, and can be extended, for example, to include the 
cost of marketing and R&D activities. 
5. A company's financial performance for a period is its results, which it 
reports in the form of a profit and loss account, indicating whether it has made 
a profit or a loss. 
6. The equivalent document in the US is the income statement. A pre-tax 
profit or loss is one calculated before tax is taken into account. 
7. The accuracy of accounts such as the balance sheet and the profit and 
loss account is checked and supposedly guaranteed by auditors, outside 
accountants who specialize in this. 
8. When a company's accounts are presented in a way that makes 
performance look better than it really is, the company may be accused of 
window dressing or creative accounting. 
9. The bottom line is an informal way of talking about the results of a 
company: the so-called bottom line of the profit and loss account. The bottom 
line also means the final result or the most important aspect of something. 
10. Assets and liabilities are normally shown on a firm's balance sheet: a 
"photograph" taken, normally once a year, of its financial situation at that time. 
Firms in a good situation are said to have a strong balance sheet and those that 
are not, a weak one. 

11. Things that are not shown in the balance sheet but in a footnote, for 
example, are off-balance sheet. 
12. A company's balance sheet may include provisions for potential losses, 
such as bad debts, debts that may never be paid.  
13. If it looks almost certain that a debt will not be paid, it is considered a 
write-off and written off. 
14. A company supplying goods or services to another company does not, 
of course, usually expect to be paid immediately, but after an agreed period. 
This is trade credit. 
15. Amounts that a business is waiting to be paid by its customers are accounts 
receivable or receivables. Customers owing money in this way are debtors. 
16. Money that a business owes to its suppliers are accounts payable or 
payables. Suppliers waiting to be paid are creditors. 
17. The cash flow of a business is the actual movement of money into and 
out of it, independently of how much it owes and is owed. 
18. Cash flow is also used to refer exclusively to cash flowing into a 
company from sales. 
19. When sales reach a level where revenues match costs, a company or 
product breaks even. 
 20. This is break even or the break even point, a crucial figure when 
calculating the return on investment (ROI) for a given business or product. 
 
V.  Match each word in column A with its definition in column B 
 
           A                                                   B               
 1. on account                                      a.  unimportant 
 2. account for                                     b.  on one’s behalf 
3. by all accounts                                c.   serve as or provide an explanation for 
4. call to account                                 d.  because of 
5. of no account                                  e.  require an explanation from 
6. of some account                              f.  important 
7. on one’s account                             g. in everyone’s opinion 
8. on account of                                   h. consider   
9. on no account                                   i. under no circumstances 
10. take into account.                           j. use smth. fully and profitably 
11. put (take) smth to good account    k. to be paid for later 
 
Use the words from column A to fill in the blanks 
 
1. 
She told me not to run … … … my illness. 
2. 
… … …  she was a very clever young lady. 
3. 
You can have it … … . 
4. 
If you buy something … …, you take it away with you and pay for     
it at  a   later date.                      

5. 
How do you … … losing such a large sum of money? 
6. 
In this new job she can … her talents … … … . 
7. 
Their reactions were … … … to me. 
8. 
… … …  must strangers be let in. 
9. 
We’ll certainly  … your feelings .. … . 
10. 
I was … … …  for my conduct by the headmaster. 
 
 
THE DOUBLE –ENTRY SYSTEM: THE BASIC METHOD OF 
ACCOUNTING 
 
Consider the title. What do you know about the topic? Find out:  
1) when the double-entry system was introduced in Britain and what its 
significance for accounting practices was; 2) what enterprise in Russia used 
this system first.   
 
The double-entry system, the backbone of accounting, evolved during the 
Renaissance. The first systematic presentation of double-entry book-keeping 
appeared in 1494, two years after Columbus discovered America. It was 
described in a mathematics book written by Luca Paciolli, a Fransiscan monk 
who was a friend of Leonardo da Vinci. Goethe, the famous German poet and 
dramatist, referred to double-entry book-keeping as “one of the finest 
discoveries of the human intellect”. And, indeed, the importance of the doubleentry system is difficult to appreciate. Suffice it to say that the double-entry 
technique made accounting records more comprehensive and orderly. Before the 
invention of double-entry book-keeping accounting records had been 
disorganized. Merchants literally had not known the state of their finances. The 
use of this technique had a positive effect on both business and trade. Some 
scholars think that there was a close relationship between the adoption of the 
double-entry system and economic growth in many countries. In the Middle 
Ages the knowledge of this technique was a pre- condition of rapid economic 
growth of most European countries. And the other way round, where this 
technique was lacking or slow to penetrate, economic development was delayed. 
In Britain the first book on the double-entry system was written by one Hugh 
Old-Castle schoolmaster, who taught arithmetic. No copy of this first book has 
survived. Later some more books describing this new method were published. 
English businessmen began to employ this recording device. The primary 
advantage of double-entry accounting, to many historians of accounting, was that it 
abolished confusion in the accounts by creating order out of chaos. 
In Russia double-entry accounting was introduced to the state and 
administration under Peter I. It was first applied for the Admiralty and the army. 
Peter I required the managers of all the mining and smelting works to maintain 
records of their operations, thus providing a basis for the collection of national 
statistics. The first large enterprise to use double-entry was the Demidovs. It had 

over 50 works, mostly iron-making in the Urals. By the end of the 18th century 
the Demidovs’ enterprise had acquired sophisticated accounting techniques. 
What is the significance of the double-entry system of accounting? 
The double-entry system is based on the principle of duality, which means 
that all economic events have two aspects- effort and reward, sources and uses- 
that offset or balance each other. In the double-entry system each transaction 
must be recorded with at least one debit and one credit, in such a way that the 
total amount of debits and the total amount of credits equal each other. Because 
of the way it is designed, the system as a whole is always in balance. 
 
I. Answer the following questions 
 
1) What is the double-entry system for accounting? When did it evolve? 
2) When did the first presentation of the double-entry appear? 
3) In what book was it described? 
4) What did Goethe say about double-entry book-keeping? 
5) What was the importance of the double-entry system? 
6) What was the state of affairs in accounting before the invention of the 
double-entry system? 
7) What was the impact of the double-entry system on economic 
development of a country? 
8) When was the first book on the double-entry system published in Britain? 
9) What was the advantage of double-entry according to many historians of 
accounting? 
10) When was the double-entry book-keeping first introduced in Russia? 
11) Why is the double-entry system always in balance as a whole? 
 
II. Complete the following statements: 
 
1. According to the text, the first book in Britain on the double-entry 
system… 
2. It was written by… 
3. No copy of this book… 
4. Later some more books on the double-entry system… 
5. English businessmen began…. 
6. The advantage of double-entry lies in the fact that… 
 
III. Translate the following sentences into English 
 
1. В настоящее время система финансового учета, как известно, 
состоит из семи ступеней, причем бухгалтерский учет проводится на 
первых трех этапах. 
2. Принцип бухгалтерского учета с двойной записью используется  
для контроля за финансовым положением предприятия. 

3. Следует знать, что типичный счет состоит из двух частей: левая 
часть для записей расходов, а правая часть для записей поступлений. 
4. Чтобы составить пробный баланс, необходимо произвести разноску 
по счетам в гроссбух. 
5. Составлением пробного баланса в конце бюджетного года 
завершают первые три ступени финансового учетного цикла. 
6. Финансовый учет обеспечивает данные для экономического анализа 
и планирования повышения производительности труда и дохода.  
 
IV. Decide which of the following statements best expresses the main 
idea of the first paragraph of the text 
 
1. The double-entry system is a backbone of accounting. 
2. The double-entry system was a pre-condition of rapid economic 
development. 
3. The importance of the double-entry system lies in the fact that its use 
made accounting records more comprehensive. 
4. According to Goethe, it is the finest discovery of human intellect. 
 
V. Translate the following sentences into English 
 
Несмотря на различные трактовки причин возникновения и названия 
двойной бухгалтерии, она при всех обстоятельствах формирует три 
непременных элемента метода: баланс, счета и двойную запись. Они 
создают иллюзию гармонии, ведь дебет всегда должен сходиться с 
кредитом, актив всегда будет равен пассиву. Так требует бухгалтерия. Но 
не такова жизнь. Бухгалтерия, следовательно, обманывает сознание, но 
этот обман, или самообман, необходим, так как позволяет нам упрощать 
действительность, создавая предпосылки для управления ею. История  
двойной бухгалтерии – это история ее живого проявления в изменяющейся 
хозяйственной среде. Идея двойной бухгалтерии – это средство познания, 
обладающее творческой силой, она создавала и продолжает создавать 
условия для управления хозяйственными процессами и одновременно для 
своего самосовершенствования. 
 
 
                                         WHAT IS ACCOUNTING? 
 
The study of accounting begins with the understanding of the way in which 
accountants see the business enterprise. Accountants frequently refer to a 
business organization as an accounting entity or a business entity. A business 
entity is any business organization such as a hardware store or grocery store that 
exists as an economic unit. As an economic unit, the business enterprise 

acquires, organizes and transforms factors of production in its activity of 
producing goods and services. This activity may be presented as the following. 

 

the input factors                                  are combined                   an  output flow of      
(land, buildings, equipment,  ------   and transferred -------     goods and material, 
labour)                                                        into                                  services 
  
 
The accounting interpretation is an abstraction of the reality portrayed 
above. The business enterprise is viewed as a system of monetary flow, instead 
of a system of physical flows. In accounting, business activities are associated 
with transactions and, indeed, are limited to transactions. Thus, unless there is a 
transaction there is no observable business activity. 
A transaction occurs whenever the firm enters into a legal contract for the 
acquisition of means of production or the sale of goods and services. Business 
activities which do not lead to transactions remain unrecognized in accounting. 
Transactions involving the acquisition of factors of production lead either to an 
outflow of money immediately or an obligation to pay money at a later date. 
Transactions by which the firm sells goods or services lead to an inflow of 
money or the right to receive money at a future date. The accounting 
interpretation of business activities leads to further analysis of these 
transactions. 
 First, transactions between the firm and its markets – both its supply 
markets and its selling markets – are defined as «external transactions». The 
totality of «external transactions» forms the subject matter of financial 
accounting.  General purpose of financial statements (reports) is to provide 
most of the information needed by external users of financial accounting. These 
financial statements are formal reports providing information on a business 
entity’s financial position (solvency), cash inflows and outflows, and the results 
of operations (profitability). Financial accounting information   is historical in 
nature, reporting on what has happened in the past. Hence, the external users 
rely on relevant and reliable financial statements to make present decisions 
about future events. 
Second, transactions within the firm, consisting of the exchanges which 
occur between the various departments are defined as «internal transactions». 
The totality of «internal transactions» forms the subject matter of cost or 
management or managerial accounting. Managerial accounting information 
provides special information for the managers of a business entity. The kind of 
information used by managers may range from very broad, long-range planning 
data to detailed explanation of why actual costs varied from costs estimates. The 
purpose of managerial accounting is to generate information that a manager can 
use to make sound internal decisions.