Ethical behaviour of accountants

 

Several accounting organizations have formulated codes of eth­ics that govern the behaviour of their members. “Code of Profes­sional Conduct” adopted by the American Institute of Certified Pub­lic Accountants reads:

“Membership in the American Institute of Certified Public Account­ants is voluntary. By accepting membership, a certified public accountant assumes an obligation of self-discipline above and beyond the require­ments of laws and regulations...”

In carrying out their responsibilities as professionals, members should exercise sensitive professional and moral judgments in all their activities.

Members should accept the obligation to act in a way that will serve the public interest, honour the public trust, and demonstrate commitment to professionalism.

A member should observe the profession’s technical and ethical standards, strive continually to improve competence and the quality of services, and discharge professional responsibility to the best of the member’s ability.

To maintain and broaden public confidence, members should perform all professional responsibilities with the highest sense of integrity.

A member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities. A member in public practice should be independent in fact and appearance when providing auditing and other attestation services.

Some business firms have also developed codes of ethics for their employees to follow. But there is something more than merely making sure you are not violating a code of ethics. Most of us sense what is right and wrong. An accountant’s most valuable asset is his or her reputation.

 

Notes to the text:

 

code of ethics - моральный кодекс, моральний кодекс

assume - принимать, приймати

moral judgment - этические суждения, етичні міркування

commitment - преданность, відданість

observe standards – соблюдать стандарты, додержуватися стандартів

broaden public confidence – укреплять доверие общественности, поширювати довіру суспільства

be independent in fact and appearance – быть независимым по сути и существу, бути незалежним за фактом і насправді

 

2.Answer the questions:

1. Who formulated codes of ethics?
2. What does codes of ethics govern?
3. What are the main principles of codes of ethics?
4. What do some firms also develop?

 

TEXT 8

 

1. Read and translate the text:

BALANCE SHEET

 

The balance sheet is a statement of the total assets owned ata specified time, the value thatthe firm owes to others, and the value that is clear of debt. It is basically a statement of the accounting equation: assets equal liabilities plus equity.

  All asset accounts are listed as shown on the trial balance,with any accumulated depreciation taking from the value of the asset. Usually, assets that can be readily converted into cash known as current assets, are shown first.

   All liability accounts are also recorded. The equity section states the owners’ investment as shown in the proprietorship or capital account, plus any net income earned. This net income is taken from the income and expense statement and is the excess of the revenue accounts over the expense accounts. If the income and expense statement had resulted in a net loss, this would be deducted from the owners' investment. Any withdrawals made by the owners are deducted since they takefrom their equity remaining in the firm.

    The two sides of the balance sheet are assets and liabilities plus equity. Sometimes a worksheet is used to plan the adjusting entries the income and expense statement and the balance sheet.

Notes to the text:

balance sheet - балансовый отчет, балансовий звіт

total assets owned - общие собственные активы, загальна вартість майна

clear of debt - без долгов, не маючий боргів

 

2.Complete the following statements:

1. The balance sheet is _____.
2. The accounting equation reads _____.
3. All asset accounts are listed on _____.
4. Assets that can be readily converted into cash are _____.

 

 

TEXT 9

1. Read and translate the text:

THE JOURNALS

Under the manual double-entry system for recording data on past activities, transactions were first recorded in a general journal and then posted to ledgers. Actually, data may be recorded in multiple journals to facilitate posting, provide a means for dividing up the work involved in making the journal entries, improve control methods, and reduce the recording costs. The following are typical multiple or special journals used in recording data on past economic activities:

I. Sales journal.

2. Purchases journal.

3. Cash receipts journal.

4. Cash disbursements journal.

When special journals are established, transactions are recorded in the appropriate special journal rather than in the general journal. Thus, in recording past activities, all sales transactions, except sales for cash, would be recorded in the sales journal. All merchandise purchase transactions, except cash purchases, would be recorded in the purchases journal. Cash receipts transactions would be recorded in the cash receipts book, and cash disbursement transactions would be recorded in the cash disbursements book.

Accountants should be familiar with the use of multiple journals, but it must be understood that no standard form of multiple journals exists. In fact, various types of special journals should be developed for different purposes.

Columnar Journals. Use of the expanded or columnar general journal is a technique which saves time and effort in posting to ledgers. The columnar general journal has special columns for debits and credits to certain accounts. Posting is reduced because only totals for the month are transferred to the general ledger.

 

Notes to the text:

 

sales journal – журнал учета продаж, журнал обліку продажу

purchase journal – журнал учета покупок, журнал обліку закупівель

cash receipts journal – журнал кассовых поступлений, касовий журнал прибутків

cash disbursements journal – журнал кассовых выплат, касовий журнал витрат

multiple journals – многочисленные журналы, численні журнали

column – столбец, стовпчик

columnar – напечатанный в столбик, надрукований у стовпчик

2. Answer the questions:

 

1. Where may data be recorded?
2. What journals are usually used in recording data?
3. What accountants should be familiar with?
4. What technique saves time?
5. What columns do columnar journals have?

 

 

TEXT 10

1. Read and translate the text:

THE LEDGERS

 

Although they are not the only sources, the ledgers are the primary sources of information for a variety of accounting reports on past ac­tivities. This means that the types of accounting reports rendered may depend upon the classification of the data in the ledgers. The accounts to be used in the ledgers, therefore, should be related to the types of information needed by managers and others. As a minimum, the ledger information on past activities should reveal the following:

1. Functions of the business, such as demand creation, order fill­ing,
 delivery, and the various activities of production.

2. Nature of object acquired or used, such as buildings, merchan­dise,
and equipment.

3. Responsibility for expenditures, such as a departmental classifi­cation
of expenditures by individuals.

The manual processing system represents the minimum disclosure of business activities; mechanical and electronic accounting process­ing systems often provide considerably more information. This addi­tional information may or may not be recorded in a formal ledger but it should be stored in such a manner that effective retrieval of it is possible.

Though the natural or object classification scheme dominates con­temporary accounting procedures, many companies interweave the functional and responsibility classifications to one degree or another into their ledger accounts. In general, a «chart of accounts» should be developed for each company to indicate the accounts to be used in re­cording data.

Subsidiary Ledgers. Under the manual processing system, data recorded in the journals are posted to the general ledger, and accounts such as «Equipment», «Accounts Receivables» and «Accounts Payable» appear there. In many instances, however, the general ledger ac­counts do not provide the detailed information needed. For example, «Accounts Receivable» and «Accounts Payable» do not disclose the customer from whom the receivable is due nor the creditor to whom the payable is to be paid. This deficiency in the general ledger is over­come by using subsidiary ledgers.

A subsidiary ledger for accounts receivable is typically a separate book containing a detailed record of the amounts owed and paid by each customer. In terms of the customary double-entry system, a sub­sidiary ledger may be defined as a detailed record of one of the gen­eral ledger accounts.

Notes to the text:

ledger - бухгалтерская книга, бухгалтерська книга               

to render - формулировать, формулювати

retrieval – поиск, пошук

to interweave – перемещать, переміщувати

to post – делать проводки, робити проведення

deficiency – недостача, нестача

 

 

2.Complete the following statements:

1. The types of accounting reports rendered may______.
2. The accounts to be used in the ledgers should be ______.
3. The ledger information on past activities should _____.
4. Data recorded in the journals are posted _____.
5. General ledger accounts do not _____.

TEXT 11

1. Read and translate the text: