Unit 11

Unit 11
Accountancy and Auditing

Vocabulary
Big 4 companies? Activities:
- auditing services
4 largest accounting firms in
the USA: - tax, strategy and management
consulting
1. Deloitte
- valuation
2. Ernst & Young (EY)
- market research
3. PricewaterhouseCoopers
(PwC) - assurance
4. Klynveld Peat Marwick - legal advisory services.
Goerdeler (KPMG).
Match the names of the divisions below to the activities of the firm:
(p92)
Tax / Advisory / Audit
Our services Tax / Advisory / Audit - capital restructuring:
Advisory
1. ___________ changing the ratio of
We can support your decision making: equity and debt in a
* on loans, debt, capital restructuring, firm's capital structure.
planning your finance needs for the next - accounting: recording
5 years financial transactions
* when buying or selling other companies (+ storing, sorting,
* when deciding which sectors and retrieving,
markets to work in accounting summarizing, and
* to improve the way you manage your presenting the results
budgets and cost in various reports)
Capital restructuring
Our services - bookkeeping: the
Tax / Advisory / Audit
Audit activity or
2. ___________
occupation of
Our team of audit experts can help you: keeping records of
* to achieve high levels of accuracy in the financial affairs
bookkeeping of a business.
* to detect fraud and crime in the company
* to test the internal controls on your - fraud: the crime of
cheating somebody
staff's work
in order to get
* to make sure you are following correct money or goods
accounting standards. illegally
Our services Tax / Advisory / Audit

3.Tax
___________
With our global expertise in tax law, we can offer you
support on:
* how to prepare for future changes in tax regulation
* how to maximize profit by reducing your tax costs
* how to choose the best tax location to set up a new
business
* how to take advantage of differences between countries’
tax laws.
Which division is responsible for:
1. checking the accuracy of a company’s 1
accounts?
2. reorganizing a company’s finances? 2 Tax 8
4
3. helping companies with mergers or Advisory 2367

3
acquisitions? Audit 156
4. interpreting new changes in tax laws? 4

5. testing for accounting fraud and errors? 5
6. advising on accounting standards? 6
7. advising on budgets and cost control? 7
8. reducing a company’s tax costs? 8
Audit Advisory Tax
- check the - reorganize a - interpret new
accuracy of a company’s finances changes in tax
company’s - help companies laws
accounts with mergers or - reduce a
- test for acquisitions company’s tax
accounting fraud - advise on costs
and errors accounting standards
Choose one of the
- advise on - advise on budgets divisions and
accounting and cost control explain why you
standards would prefer to
work in it.
Vocabulary
Documents & billing records
(các loại chứng từ và hóa đơn)
Are documents and billing records necessary in business operation?
- ensure accurate financial tracking, helping businesses monitor
income, expenses, and profitability.
- serve as legal proof of transactions, protecting businesses in case
of disputes or audits.
- proper record-keeping supports tax compliance, reducing the
risk of penalties or legal issues.
- provide a clear history of business activities, which is crucial for
strategic decision-making and performance analysis
- contribute to maintaining organizational efficiency, enabling easy
retrieval of information for both internal and external purposes.
Documents and billing records
đơn đặt hàng

Purchase Orders
(đơn đặt hàng)
Phiếu giao hàng

delivery
note
(Phiếu
giao hàng)
Phiếu nhận
hàng
goods received note (GRN, Phiếu nhận hàng)
hóa đơn bán

hàng
sales
invoice
(hóa đơn
bán hàng)
hoá đơn điều

chỉnh giảm hoặc
hoá đơn âm
credit note
(hoá đơn điều
chỉnh giảm
hoặc hoá đơn
âm)
bảng kê thanh
tóan nợ
statement
of account
(bảng kê
thanh
tóan nợ)
phiếu báo thanh

toán
remittance advice (phiếu báo thanh toán)
ủy nhiệm chi
electronic payment (ủy nhiệm chi)
Phiếu xác nhận

đã nhận tiền
cash receipt (Phiếu xác nhận đã nhận tiền)
Complete the following definitions with these financial
expressions from the diagram.
amount owed /
authorized / inspect /
delivery / proof /
purchase / issue / wrong
delivery / settle /
defective
Read the handout again and fill in the gaps.
amount owed / authorized / inspect / delivery / proof /
purchase / issue / wrong delivery / settle / defective
1. To buy goods for a company is to

purchase them.
___________
2. The confirmation that goods have

delivery note.
arrived is given by a _________
3. A delivery note will give the

proof
purchaser ___________ of delivery.
4. Someone who has the authority to

sign a document to place an order is
authorized purchaser.
an ___________
5. To check the goods is to

inspect them.
_________
6. Goods that are damaged are

defective
___________.
7. Goods that arrive but were not

wrong delivery
ordered are a __________.
8. The money that has not been paid

amount owed
yet is the __________.
9. To pay what is owed in an account

is to ___________
settle the account.
10. To print or publish an official

confirmation record is to
issue
____________ a document.
Read the handout & match English terms and
Vietnamese ones.
hóa đơn bán hàng
sales invoice
issued to the purchaser requesting payment
and describing all items purchased.
Read & match English terms and Vietnamese
ones.
Ủy nhiệm chi
electronic payment by bank transfer to

settle the statement of account
ones.
Phiếu giao hàng
delivery note
details the items delivered and is signed by
the purchaser as proof delivered.
ones.
hoá đơn điều chỉnh giảm hoặc

hoá đơn âm
credit note
issued if the purchaser returns any items as
defective good or wrong order …
ones.
đơn đặt hàng
purchase order (P/O):

an internal document that lists items to buy
and is signed by an authorized purchaser.
ones.
hóa đơn thanh toán
cash receipt:
issued to confirm receipt of payment
ones.
Bản sao kê tài khoản
statement of account
gives the client a summary of all their
purchases for the month and the amount
owed.
ones.
phiếu báo thanh toán
remittance advice:
used if you are requesting payment by
cheque.
ones.
Phiếu nhận hàng
goods received note

issued after the goods are inspected for
damage or wrong delivery.
Reading
Accounting & Auditing
Differences between accounting and auditing.
Choose the correct terms.
1. Accountants / Auditors prepare the

financial accounts of a company.
2. Accountants / Auditors investigate and

test the accuracy of the accounts.
3. Accountants / Auditors are appointed

by the shareholders.
4. Accountants / Auditors prepare the

statutory accounts at the end of every
financial year.
5. The accounts / auditor's report

record(s) the financial results of a
company.
Student A What is the role of the IFSA?
The IFSA is an But globalization has created a

international growing pressure for all
accounting companies worldwide to use
organization that tries the same reporting standards
to create common developed by the international
standards of accounting organization, the
accounting worldwide. IFSA.
Student B Why do the owners of a company appoint external
auditors?
The answer is that every year the
To check the owners appoint an 'external
accounts and write auditor' to check the company's
a report on their accounts and to write a report on
accuracy. the accuracy of the financial
statements: the auditor's report.
This is now a legal requirement
for public companies.
Student A What is the reason for having the statutory financial
accounts?
But a modern company is also regulated by laws
To comply (e.g. the Companies Acts in the UK), and these laws
with the law require a company to publish official financial
/ meet legal statements for regulators and shareholders to
inspect. This means that the accountants have to
requirement
prepare a second annual summary set of accounts,
s.
the Statutory Financial Accounts which include a
balance sheet, income statement, and cash-flow
statement, according to recognised accounting
standards.
Student B What do the auditors do if they are not happy with
the results of their audit?
They can then complete the audit report in
They issue which they declare that “in their opinion”
a 'qualified the accounts are accurate and give a “true
opinion'. and fair view” of the company's position.
If, occasionally, they are unable to

demonstrate this, they will issue a 'qualified
opinion' in which they will point out the
things that they could not prove.
Student A What are accounting standards? Give three
examples.
For example, the company must follow
Rules created by the a principle of 'consistency' (it cannot
accounting keep changing its accounting systems
profession on how every year); it must be 'prudent'
to report figures, (careful) in its estimate of the value of
e.g.: things it owns; and the directors must
1. 'consistency’, believe that the company has enough
2. 'prudent’, money to continue trading next year as
3. 'a going concern'. a 'going concern'.
Student B What is the purpose of the substantive tests?
It is also important to know if the assets a

To know if company claims to own really exist. So the
the assets auditors will run 'substantive tests' and will
of the visit the factories and warehouses to
company physically see items recorded.
really exist.
Student A 1. What information can you find in the books or
ledgers of a company?
In the past, a company's financial

The financial
records were kept in real books or
records of a
ledgers - hence the term
company's sales,
bookkeeping - so a company kept a
purchasing, and
separate sales ledger for sales made,
cash.
a purchasing ledger for things
bought, a cash ledger, and others.
Student B Who do the external auditors work for?

The owners of owners appoint an 'external auditor' to
the company. check the company's accounts and to
write a report on the accuracy of the
financial statements: the auditor's
report.
Student A What documents will be inspected by the
regulators?
This means that the accountants have
a balance sheet, to prepare a second annual summary
income set of accounts, the Statutory Financial
statement, and Accounts which include a balance
cash-flow sheet, income statement, and cash-
statement flow statement, according to
recognised accounting standards.
Student B How often does a public company have to do an
external audit?

Every year. owners appoint an 'external auditor' to
check the company's accounts and to
write a report on the accuracy of the
financial statements: the auditor's
report.
Student A What is the purpose of the management
accounts?
Even today, the company accountants may use
To help these books to prepare the management
managers accounts. These are prepared monthly, or even
to control weekly in very big companies. They are not
the published outside the company, but provide
business. information for controlling the business by giving
an up-to-date statement of the company's
current financial trading. They help to answer
questions such as: 'Are sales going to plan?' and
'What is happening to our costs?'.
Student B What kinds of documents do the auditors inspect?
Invoices and The auditors will look at all the

receipts, the books company's documents, like
and bank invoices and receipts, the books
statements. and bank statements and check if
these have been recorded
properly.
Student B How do the auditors report the first results of their
tests?
At the end of their tests the auditors

They write a write a letter that they send first to the
letter to management - the letter to
management. management - describing what they
have found and what needs to be
corrected before they are happy to 'sign
off' the accounts.
Student A Do you think the IFSA is important? Why or why not?
- It provides a legal framework to regulate and supervise financial

institutions, ensuring stability and integrity in the financial services
sector.
- It promotes transparency and accountability by setting standards for
financial transactions, protecting both consumers and investors.
- It helps mitigate risks such as fraud, money laundering, and financial
misconduct, contributing to a safer financial environment.
- it enhances the competitiveness of a country's financial industry by
aligning it with global best practices.
- the act fosters trust and confidence in the financial system, which is
essential for attracting investment and economic growth.
Reading task 2
Read the statements and decide if they
are true or false.
These statements are true or false? Answer in pairs.
1. At the end of an audit, the auditors

will always sign off the accounts.
False
Occasionally they 'are unable' do this and
issue a 'qualified opinion’
(Auditing: paragraph 7)
These statements are true or false?
2. A purchasing ledger tells you about

things a company sells to customers.
False
It tells you about things a company buys
(Accounting: paragraph 1.)
3. Auditors will ask about the rules a

company has for recording transactions.
True
'Have the staff really followed ... the
company's rules?
(Auditing: paragraph 4.)
4. Accounting standards are the same all

over the world.
False
There's 'growing pressure' for international
standards, but this means they haven't been
adopted everywhere yet.
5. Auditors are appointed by the

managers to check accounts.
False
The auditors are appointed by the owners
of a company, not its managers
(see Auditing: paragraph 2.)
6. By law, a public company has to

publish its statutory accounts every year.
True
'Every year’
(Auditing: paragraph 2)
(Accounting: paragraph 3 'annual
summary'.)
7. Companies use books or ledgers to

prepare the accounts.
False
Nowadays they're kept in electronic form
8. Auditors want to know if a company's

accounts offer a 'true and fair view'.
True
(Auditing: paragraph 6.)
9. The management accounts are

prepared once a year.
False
They are prepared 'monthly, or even
weekly’
Listening
The steps of an audit
1. Listen to a presentation in which the leader of an audit team
explains to a client the steps of the audit he will carry out in the
company. Write down the sequence of steps by putting the numbers
(1-6) in the first column of the table.
a. do substantive tests 4
b. define the scope of the audit 1
c. sign off the audit report 6
d. examine the accounting system 2
e. write a management letter 5
f. examine the internal controls 3
Listen again and make a note
Steps in the audit What the client needs to do
1. define the scope arrange interviews
of the audit
2. examine the give access to company’s books, e.g. __________
sales ledger and
accounting system
bank statements
_______________
3. examine the provide two things: (a) _________and
rule book real documents
(b) ____________,
internal controls
e.g. sales invoices and purchasing documents
4. do substantive machinery and _______
show us __________ stocks and talk to
tests
_______________
members of staff
5. write a how you propose to change the systems
to make a plan of ________________________________
management
letter
6. sign off the report the results to ___________
shareholders in your company’s
audit report
annual report
______________

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Unit 11

Accountancy and Auditing

Our services Tax / Advisory / Audit

3. helping companies with mergers or Advisory 2367

4. interpreting new changes in tax laws? 4

đơn đặt hàng

Phiếu giao hàng

hóa đơn bán

hoá đơn điều

phiếu báo thanh

Phiếu xác nhận

1. To buy goods for a company is to

2. The confirmation that goods have

3. A delivery note will give the

4. Someone who has the authority to

5. To check the goods is to

6. Goods that are damaged are

7. Goods that arrive but were not

8. The money that has not been paid

9. To pay what is owed in an account

10. To print or publish an official

hóa đơn bán hàng

electronic payment by bank transfer to

Phiếu giao hàng

hoá đơn điều chỉnh giảm hoặc

đơn đặt hàng

purchase order (P/O):

hóa đơn thanh toán

Bản sao kê tài khoản

phiếu báo thanh toán

Phiếu nhận hàng

goods received note

1. Accountants / Auditors prepare the

2. Accountants / Auditors investigate and

3. Accountants / Auditors are appointed

4. Accountants / Auditors prepare the

5. The accounts / auditor's report

The IFSA is an But globalization has created a

If, occasionally, they are unable to

It is also important to know if the assets a

In the past, a company's financial

The answer is that every year the

The answer is that every year the

Invoices and The auditors will look at all the

At the end of their tests the auditors

- It provides a legal framework to regulate and supervise financial

1. At the end of an audit, the auditors

2. A purchasing ledger tells you about

3. Auditors will ask about the rules a

4. Accounting standards are the same all

5. Auditors are appointed by the

6. By law, a public company has to

7. Companies use books or ledgers to

8. Auditors want to know if a company's

9. The management accounts are

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