Affecting of the international monetary developments on workers, consumers and others.

Affecting of the international monetary developments on workers, consumers and others.

There is little exaggeration in saying that international monetary developments affect all individuals as workers, consumers, travelers, businessmen producing goods for domestic or foreign markets, and investors at home or abroad. The channels which transmit the impact of monetary events to people in their various roles in society are numerous.

Employment opportunities for some workers are improved when exports thrive and are weakened for other workers when foreign products compete effectively in price or quality with domestic output.

A movement in the exchange rate may benefit an individual in one of his roles but leave him worse off in another. The individual as a consumer may have a different view of and a different interest in what happens in the international monetary sphere from that of the individual as a worker.

Business activity is heavily influenced by international monetary conditions affecting prices, exchange rates, interest rates, imposition of controls on exports or imports or on capital movements.

Interdependence among nations has intensified lately, thus there is great interest in the functioning of the international monetary system.

2.Accounting.

· Accounting involves recording and summarizing an organization’s transactions or business deals, such as purchases and sales, and reporting them in the form of financial statements. In many countries, the accounting or accountancy profession has professional organizations which operate their own training and examination systems, and make technical and ethical rules: these relate to accepted ways of doing things.

· Bookkeeping is the day-to-day recording of transactions.

· Financial accounting includes bookkeeping and preparing financial statements for shareholders and creditors (people or organizations who have lent money to a company).

· Management accounting involves the use of accounting data by managers, for making plans and decisions.

Auditing.

Auditing means examining a company’s systems of control and the accuracy or exactness of its records, looking for errors or possible fraud: where the company may have deliberately given false information.

· An internal audit is carried out by a company’s own accountants or internal auditors.

After book keepers complete their accounts, and accountants prepare their financial statements, these are checked by internal auditors. An internal audit is an examination of a company’s accounts by its own internal auditors or controllers. They evaluate the accuracy or correctness of the accounts, and check for errors. They make sure that the accounts comply with, or follow, established policies, procedures, standards, laws and regulations (Lections 8, 9a). The internal auditors also check the company’s system of control, related to recording transactions, valuing assets and so on. They check to see that these are adequate or sufficient and, if necessary, recommend changes to existing policies and procedures.

· An external audit is done by independent auditors: auditors who are not employees of the company.

The external audit examines the truth and fairness of financial statements. It tries to prevent what is called ‘creative accounting’, which means recording transactions and values in a way that producers a false result –usually an artificially high profit.

Public companies have to submit their financial statements to external auditors – independent auditors who do not work for the company. The auditors have to give an opinion about whether the financial statements represent a true and fair view of the company’s financial situation and results.

During the audit, the external auditors examine the company’s systems of internal control, to see whether transactions have been recorded correctly. They check whether the assets mentioned on the balance sheet actually exist, and whether their valuation is correct. For example, they usually check that some of the debtors recorded on the balance sheet are genuine. They also check the annual stock take – the count of all the goods held ready for sale. They always look for any unusual items in the company’s account books or statements.

Until recently, the big auditing firms also offered consulting services to the companies whose accounts they audited, giving them advice about business planning, strategy and restructuring. But after a number of big financial scandals, most accounting firms separated their auditing and consulting divisions, because an auditor who is also getting paid to advise a client is no longer totally independent.

There is always more than one way of presentation accounts. The account of British companies have to give a true and fair view of their financial situation. This means that the financial statements must give a correct and reasonable picture of the company’s current condition.

Corporate income tax. Individual income tax: Indirect taxes. Excises

1. The corporate income tax

The corporate income tax occupies a significant place inreceipts of the state budget of Kazakhstan.

The mechanism of taxation by corporate income tax defines the order of calculation, payment, condition of collection, privilege and sanction, terms of payment of the tax by the legal person.

The tax is paid by the legal persons, residents of Republic of Kazakhstan receiving income, including noncommercial and budget organizations under the incomes of enterprise activity.

Object of taxation is:

1) taxable income;

2) income taxed at a source of payment;

3) net income of the legal person-of nonresidents who is carrying out activity in Republic of Kazakhstan through constant establishment.

2. Individual income tax

The payers of individual income are the physical persons, foreign physical persons.

Object of taxation is the income taxed at a source of payment and the income, not taxed at a source of payment.

To the incomes of tax bearer taxed at a source of payment concern: the income of the worker (incomes, charged by the employers reduced for the sum of tax deductions; the income of the worker in the natural form; income as a material benefit); other incomes of natural persons of fiscal agents, the income of single payments; pension payments from accumulated pension funds; the income of dividends, compensations, prizes; the grants (expect for paid the trainee in organizations of education, in the sizes established by the legislation of Republic of Kazakhstan for the state grants); income under the contracts of insurance.

Indirect taxes

Indirect taxes express fiscal interests of the state. Their reasonable application can positively influence on process of pricing and on pattern of consumption.

Use of consumption taxes what excises are, the tax from sales, the value-added tax, is more preferable, as:

· from them it is more difficult to evade;

· to them it is less connected with economic infringements;

· they reduce stimulus to work less;

· for them anonymity is characteristic.

 

Receipts concern to indirect taxes from foreign trade activities (customs incomes as the customs, taxes to export and import, a variation in prices of the goods sold on a home market and their invoice cost) also.

Excises

Excises - taxes to the goods included in the prices and paid by the buyer. The excises are paid by the manufacturers of the goods having by virtue of the specific properties exclusively high prices and steady demand. Within excises service can be taxed, thus the sum of the tax is included in the tariff.

Under excise goods in Kazakhstan are: all kinds of spirit; alcoholic production; tobacco production; petrol (except for air), diesel fuel; cars (except for automobiles with manual management specially intended for the invalids); crude petroleum, gas condensate. Under excise a kind of activity of the organization and realization of lotteries.

Direct taxes.

Direct taxes

Governments finance most of their expenditure by taxation. If they spend more than they levy or change in taxes, they have to borrow money.

Direct taxes are collected by government from the income of individuals and business.

§ Individuals pay income tax on their wages or salaries, and most other money they receive (BrE: corporation tax; AmE: income tax).

§ Most countries have a capital gains tax on profits made from the sale of assets such as stocks or shares. This is usually imposed or levied at a much lower rate than income tax.

§ A capital transfer tax (commonly called death duty in Britain) is usually imposed on inherited money or property. Other names for this tax are inherited tax or estate tax.

§ Companies pay corporation tax on their profits. Business profits are generally taxed twice, because after the company pays tax on its profits, the shareholders pay income tax on any dividends received from these profits.

§ Companies and their employees also have to pay taxes (called national insurance in Britain) which the government uses to finance social security spending – unemployment pay, sick pay, etc.

 

Double-entry book-keeping.

Zaheer Younis works in the accounting department of a trading company: ‘I began my career as a bookkeeper. Bookkeepers record the company’s daily transactions: sales, purchases, debts, expenses and so on. Each type of transaction is recorded in a separate account – the cash account, the liabilities account, and so on.Double-entry bookkeeping is a system that records two aspects of every transaction. Every transaction is both a debit –a deduction- in one account and corresponding credit –an addition – in another. For example, if a company buys some raw materials – the substances and components used to make products – that it will pay for a month later, it debits its purchases account and credits the supplier’s account. If the company sells an item on credit, it credits the sales account, and debits the customer’s account. As this means the level of the company’s stock-goods ready for sale-is reduced, it debits the stock account. There is a corresponding increase in its debtors – customers who owe money for goods or services purchased –and the debtors or accounts payable account is credited. Each account records debits on the left and credits on the right. If the bookkeeper do their work correctly, the total debits always equal the total credits’.

 

Indirect taxes.

Indirect taxes are levied on the production or sale of goods and services. They are included in the price paid by the final purchaser.

§ In most European countries, companies pay VAT or value –added tax, which is levied at each stage of production, based on the value added to the product at that stage. The whole amount is added to the final price paid by the consumer. In Canada, Australia, New Zealand and Singapore, this tax is called goods and services tax or GST.

§ In the USA, there are sales taxes, collected by retailers, levied on the retail price of goods.

§ Governments also levy excise taxes or excise duties – additional sales taxes on commodities like tobacco products, alcoholic drinks and petrol (BrE: petrol; AmE: gasoline).

§ Special taxes, called tariffs, are often charged on goods imported from abroad.

Income tax for individuals is usually progressive: people with higher incomes pay a higher rate of tax (and therefore a higher percentage of their income) than people with lower incomes. Indirect taxes such as sales tax and VAT are called proportional taxes, imposed at a fixed rate. But indirect taxes are actually regressive: people with a low income pay a proportionally greater part of their income than people with a high income.

Laws, rules and standards.

Laws, rules and standards

In most continental European countries, and in Japan, there are laws relating to accounting, established by the government. In the US companies whose stocks are traded on public stock exchanges have to follow rules set by the Securities and Exchange Commission (SEC), a government agency. In Britain, the rules, which are called standards, have been established by independent organizations such as Accounting Standards Board (ASB), and by the accountancy profession itself. Companies are expected to apply or use these standards in their annual accounts in order to give a true and fair view.

Companies in most English-speaking countries are largely funded by share holders, both individuals and financial institutions. In these countries, the financial statements are prepared for shareholders. However, in many continental European countries businesses are largely funded by banks, so accounting and financial statements are prepared for creditors and the tax authorities.

Non-payment of tax

To reduce the amount of income tax that employees have to pay, some employers give their staff advantages instead of taxable money, called perks, such as company cars and free health insurance.

 

Multinational companies often register their head offices in tax havens – small countries where income taxes for foreign companies are low, such as Liechtenstein, Monaco, the Cayman Islands, and Bahamas.

 

Using legal methods to minimize your tax burden – the amount of tax you have to pay – is called tax avoidance. This often involves using loopholes – ways of getting around the law, because of an error or a technicality in the law itself. Using illegal methods – such as not declaring your income, or reporting it inaccurately – is called tax evasion, a nd can lead to big penalties.

16.Problems of the international monetary system and processes which it management.

The international monetary system is afflicted with problems. The main reason is that the nations that participate in it are politically independent but economically and financially interdependent.

This discrepancy determines the functions of the international monetary system; at its best, the system acts to reconcile the conflicting economic policies of its politically independent members.

In order to perform this reconciling function, the system is concerned, first, with how nations act to influence their balance-of-payments positions, with their policies that affect exchange rates.

The system is concerned, second, with how nations settle their accounts with one another. Third, the system is concerned with the amount and form of international money.

In broad terms, the international monetary system involves the management, in one way or another, of three processes:

1) the adjustment of balance-of-payments positions, including the establishment and alteration of exchange rates;2) the financing of payments imbalances among countries by the use of credit or reserves; and 3) the provision of international money.

 

17.Some of the major users of accounting information: owners, lenders and suppliers of goods and services.

Some of the major users of accounting information are: 1) owners of business, 2) lenders of money, such as banks, 3)suppliers of goods and services, 4) managers of businesses, 5) customers of a business, 6) employees, 7) governments, 8) the public, 9) competitors.

Owners. Owners normally invest in business in order to increase their wealth. The major decision confronting owners and potential owners is whether or not to invest or retain an investment in a business.

Lenders. Lenders can be conveniently divided into two groups: 1) shot-term lenders, and 2) long-term lenders.

Short-term lenders (i.e. those who lend money for up to 12-month period) will normally be concerned with the ‘liquidity’ of the business. Like owners, long-term lenders are concerned with the longer term prospects of the business. They are interested in likely future risks and rewards, and in the efficiency of management.

Suppliers of goods and services. Suppliers of goods and services need to ensure that a business is able to pay for the goods and services provided. They will, therefore, be concerned with the liquidity of a business. It is quite common to find that some suppliers provide a business with a substantial and continuous flow of goods and services. For suppliers in this position, the long-term prospects of the business may be of great interest

MacKenzie Inc, New York

In accounting, assets are generally divided into fixed and current assets. Fixed assets (or non-current assets) and investments, such as buildings and equipment, will continue to be used by the business for a long time. Current assets are things that will probably be used by the business in the near future. They include cash - money available to spend immediately, debtors – companies or people who owe money they will have to pay in the near future, and stock.

 

If a company things a debt will not be paid, it has to anticipate the loss – take action in preparation for the loss happening, according to the conservatism principle (See lections 7,9). It will write off, or abandon, the sum as a bad debt, and make provisions by charging a corresponding amount against profits: that is, deducting theamount of the debt from the year’s profits.

 

 

Value added tax (VAT)

The payer of the tax compensates suffered as a result of its payment to the state of loss by increase of the prices and shifts payment of the tax on the buyer.

Object of taxation is taxed turnover and taxed import.

Taxed turnover is the turnover made by the payer of the tax to added cost:

1) on realization of the goods (jobs, services), expect for free turnover;

2) on purchase of jobs, services from nonresident, tax, not being the payer, to added cost in Republic of Kazakhstan;

3) on the rests of goods (including basic means), on which the tax to added cost was referred to offset.

The size of a taxed turnover is defined on the basis of cost of the sold goods, jobs, services proceeding from the used prices and tariffs, without inclusion in them the VAT.

Taxed import are the goods imported on territory of Republic of Kazakhstan (expect for released from tax to added cost), declaring according to the customs legislation of Republic of Kazakhstan.

The rate of tax during its action consistently reduces from 28% up to 26%, 20%,16% and then –up to 12% in 2009. to the size of taxable turnover and taxable import).

Social tax

Object of taxation for the payer are the charges of the employers paid to the workers as incomes and also incomes of the foreign personnel and payments to the physical persons (except for payments to the individual businessmen, private notaries and lawyers) under the contracts of compensated rendering of services. For the private notaries, lawyers, legal persons – residents of Republic of Kazakhstan object of taxation by social tax is the number of workers, including payers.

Since 2008 the rates of the tax have been established from 13% up to 5% from the size of object of taxation in 2009 – 11%.

7. Property tax

Property tax includes: the land tax, property tax of physical and legal persons, tax to vehicles.

Property tax acts in the local budgets. Besides fiscal, these taxes have the purpose stimulation of efficiency of use property, as the rates of the taxes are established to external signs – sizes of property, but not its profitability.

 

Affecting of the international monetary developments on workers, consumers and others.

There is little exaggeration in saying that international monetary developments affect all individuals as workers, consumers, travelers, businessmen producing goods for domestic or foreign markets, and investors at home or abroad. The channels which transmit the impact of monetary events to people in their various roles in society are numerous.

Employment opportunities for some workers are improved when exports thrive and are weakened for other workers when foreign products compete effectively in price or quality with domestic output.

A movement in the exchange rate may benefit an individual in one of his roles but leave him worse off in another. The individual as a consumer may have a different view of and a different interest in what happens in the international monetary sphere from that of the individual as a worker.

Business activity is heavily influenced by international monetary conditions affecting prices, exchange rates, interest rates, imposition of controls on exports or imports or on capital movements.

Interdependence among nations has intensified lately, thus there is great interest in the functioning of the international monetary system.

2.Accounting.

· Accounting involves recording and summarizing an organization’s transactions or business deals, such as purchases and sales, and reporting them in the form of financial statements. In many countries, the accounting or accountancy profession has professional organizations which operate their own training and examination systems, and make technical and ethical rules: these relate to accepted ways of doing things.

· Bookkeeping is the day-to-day recording of transactions.

· Financial accounting includes bookkeeping and preparing financial statements for shareholders and creditors (people or organizations who have lent money to a company).

· Management accounting involves the use of accounting data by managers, for making plans and decisions.

Auditing.

Auditing means examining a company’s systems of control and the accuracy or exactness of its records, looking for errors or possible fraud: where the company may have deliberately given false information.

· An internal audit is carried out by a company’s own accountants or internal auditors.

After book keepers complete their accounts, and accountants prepare their financial statements, these are checked by internal auditors. An internal audit is an examination of a company’s accounts by its own internal auditors or controllers. They evaluate the accuracy or correctness of the accounts, and check for errors. They make sure that the accounts comply with, or follow, established policies, procedures, standards, laws and regulations (Lections 8, 9a). The internal auditors also check the company’s system of control, related to recording transactions, valuing assets and so on. They check to see that these are adequate or sufficient and, if necessary, recommend changes to existing policies and procedures.

· An external audit is done by independent auditors: auditors who are not employees of the company.

The external audit examines the truth and fairness of financial statements. It tries to prevent what is called ‘creative accounting’, which means recording transactions and values in a way that producers a false result –usually an artificially high profit.

Public companies have to submit their financial statements to external auditors – independent auditors who do not work for the company. The auditors have to give an opinion about whether the financial statements represent a true and fair view of the company’s financial situation and results.

During the audit, the external auditors examine the company’s systems of internal control, to see whether transactions have been recorded correctly. They check whether the assets mentioned on the balance sheet actually exist, and whether their valuation is correct. For example, they usually check that some of the debtors recorded on the balance sheet are genuine. They also check the annual stock take – the count of all the goods held ready for sale. They always look for any unusual items in the company’s account books or statements.

Until recently, the big auditing firms also offered consulting services to the companies whose accounts they audited, giving them advice about business planning, strategy and restructuring. But after a number of big financial scandals, most accounting firms separated their auditing and consulting divisions, because an auditor who is also getting paid to advise a client is no longer totally independent.

There is always more than one way of presentation accounts. The account of British companies have to give a true and fair view of their financial situation. This means that the financial statements must give a correct and reasonable picture of the company’s current condition.