86.умк по английскому языку часть 3 practiсe vocabulary & reading tests (accounting)

МИНИСТЕРСТВО ОБРАЗОВАНИЯ И НАУКИ РФ ФЕДЕРАЛЬНОЕ ГОСУДАРСТВЕННОЕ БЮДЖЕТНОЕ

ОБРАЗОВАТЕЛЬНОЕ УЧРЕЖДЕНИЕ ВЫСШЕГО ПРОФЕССИОНАЛЬНОГО ОБРАЗОВАНИЯ

«ВОРОНЕЖСКИЙ ГОСУДАРСТВЕННЫЙ УНИВЕРСИТЕТ»

УМК ПО АНГЛИЙСКОМУ ЯЗЫКУ ДЛЯ СТУДЕНТОВ, ОБУЧАЮЩИХСЯ

ПО НАПРАВЛЕНИЮ 080100 «ЭКОНОМИКА», БЛОК ДИСЦИПЛИН «БУХГАЛТЕРСКИЙ УЧЕТ,

АНАЛИЗ И АУДИТ»

Часть 3 Для организации самостоятельной работы

PRACTICE VOCABULARY & READING TESTS (Accounting)

Составитель А.В. Малюгина

Издательско-полиграфический центр Воронежского государственного университета

2012

Copyright ОАО «ЦКБ «БИБКОМ» & ООО «Aгентство Kнига-Cервис»

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Утверждено научно-методическим советом факультета романо-германской

филологии 17 января 2012 г., протокол № 1

Рецензент канд. филол. наук, доц. кафедры английского языка естественно-

научных факультетов ВГУ Н.М. Шишкина

Учебно-методическое пособие подготовлено на кафедре английского языка

гуманитарных факультетов факультета романо-германской филологии

Воронежского государственного университета.

Рекомендуется для студентов 1-го и 2-го курсов экономического факуль-

тета, а также для специалистов в области бухгалтерского учета и аудита.

Для направления 080100 – Экономика


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Пояснительная записка

Учебно-методическое пособие “ Practice Vocabulary & Reading Tests

(Accounting) ” представляет собой третью часть учебно-методического

комплекса, предназначенного для подготовки студентов-экономистов в

области бухгалтерского учета и аудита. В комплекс также входят учебно-

методические пособия “Introducing Accounting” – часть 1 и “Accounting

Issues” – часть 2.

Пособие включает ряд лексических тестов и тестов по чтению,

предназначенных для закрепления пройденного материала в учебно-

методических пособиях “Introducing Accounting” и “Accounting Issues”.

Первый раздел пособия – “Vocabulary Tests” нацелен на повторение и

дальнейшее расширение словарного запаса по изученным профессиональ-

ным темам, способствуя активному усвоениею лексики.

Во втором разделе пособия “Reading Tests” представлены профес-

сиональные аутентичные тексты с заданиями, позволяющими развивать

различные виды чтения и улавливать значение письменного английского на

уровне слов, фраз, предложений и парграфов.

Пособие может быь рекомендовано как для внеаудиторной, так и для

аудиторной работы и использоваться в качестве контрольно-измерительных

материалов в процессе работы с учебно-методическими пособиями “In-

troducing Accounting” и “Accounting Issues”.


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VOCABULARY TESTS

Test №1 Accountants

1. Most accounting positions require a bachelor's degree in accounting or

a related field or _________ combination of education and experience.

a) an attained

b) a calculated

c) a curricular

d) an equivalent

2. Many companies want graduates with a master's degree in accounting,

or a master's degree in business administration with _________ in

accounting.

a) a concentration

b) an expertise

c) a focus

d) a specialty

3. Some schools offer students a chance for hands-on experience with

part-time _________ programs in accounting or commercial firms.

a) internship

b) practice

c) study

d) tutorial

4. Accountants help make sure that a firm is run efficiently, that its

records are maintained accurately, and that its taxes are paid properly

and in a _________ manner.


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a) controlled

b) courteous

c) formal

d) timely

5. Nowadays, accountants are _________ the services they offer with

budget analysis, investment planning, and IT consulting.

a) broadening

b) lengthening

c) opening

d) reformatting

6. _________ accountants, many of whom are CPAs, generally have their

own companies or work for major accounting firms.

a) Graduate

b) Professional

c) Public

d) Senior

7. Some accountants specialize in _________ accounting — investigating

white-collar crimes such as securities fraud and embezzlement.

a) criminal

b) forensic

c) police

d) undercover

8. Many work closely with law enforcement officers and lawyers during

investigations and often appear as _________ witnesses during trials.


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a) expected

b) expert

c) known

d) respected

9. _________ accountants record and analyze the financial information

of the firms in which they are employed.

a) Business

b) Internal

c) Licensed

d) Management

10. Government accountants work in the public _________, maintaining

and monitoring the recordkeeping of government departments and

agencies.

a) arena

b) domain

c) quarter

d) sector

Test №2 Accounting terms

1. The customary manner in which a business analyzes and records its

_________ is by first entering them into a journal.

a) transactions

b) communications

c) dealings

d) ventures


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2. Journal entries are entered in _________ order, meaning by date, with

the earliest date first.

a) sequential

b) numerical

c) chronological

d) successional

3. Once the transactions have been entered into the journal they are

_________ or transferred into their individual General Ledger

accounts.

a) noted

b) lifted

c) allocated

d) posted

4. All _________ increase with a debit entry and decrease with a credit

entry.

a) advantages

b) associates

c) assets

d) assurances

5. Liabilities either have a credit or no _________ at all.

a) scale

b) balance

c) debit

d) debut


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6. Capital accounts represent the owner's _________ worth in the

business.

a) equity

b) value

c) hammock

d) net

7. _________ accounts are accounts for your sources of business-

generated income.

a) Liability

b) Revenue

c) Balance

d) Drawing

8. The _________ is the difference between what a business pays for an

item wholesale and what the business sells it for retail.

a) markup

b) makeup

c) makeshift

d) moreover

9. An accounts payable _________ shows how much you owe each of

your vendors.

a) lecture

b) leeway

c) ledger

d) manual


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10. Accounts _________ shows how much money your customers owe you.

a) incoming

b) receivable

c) obtainable

d) collectable

Test №3 The balance sheet

1. A balance sheet shows the financial _________ that a company has at a

point in time and where they came from.

a) records

b) resources

c) returns

d) revenues

2. It is an instant photograph that displays the company's financial

_________ at the end of a business month, quarter or year.

a) explanation

b) position

c) publication

d) station

3. The organization of a balance sheet reflects this basic _________:

assets equal debts plus equity.

a) arrangement

b) assessment

c) equation

d) question


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4. The _________ of accounts is a listing of the accounts that are reflected

in the financial statements.

a) book

b) chart

c) table

d) outline

5. Assets are often listed in the order of their _________ — which means

how easy it would be to convert each asset into cash.

a) complexity

b) liquidity

c) security

d) simplicity

6. Assets are divided into three categories: Current Assets, Fixed Assets,

and _________ Assets.

a) Current fixed

b) Different

c) Fixed current

d) Other

7. Current assets will likely be turned into cash or converted into a(n)

_________ within a year.

a) bonus

b) expense

c) option

d) stock


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8. Fixed assets are saleable, but are not expected to be converted to cash

in the _________ course of business.

a) average

b) equal

c) final

d) normal

9. Liabilities are debts or _________ stemming from goods or services

received by the company.

a) obligations

b) others

c) outstandings

d) owed

10. If the assets of a company are greater than its liabilities, then the

equity of the business is the positive _________ between the two

numbers.

a) calculation

b) difference

c) dividend

d) sum

Test №4 Income statements

1. The statement of income and expenses reports the company's income

and expenses for the time period: it is also called a _________-and-loss

statement.

a) earnings

b) gain


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c) profit

d) win

2. The first item on the statement is the total amount of sales of products

or services; this is often referred to as _________ sales.

a) gross

b) mass

c) overall

d) whole

3. The main deduction from this revenue is called _________ of sales, the

amount of money the company spent to produce the same goods or

services.

a) cost

b) discount

c) expense

d) reduction

4. The next deduction is _________ expenses — for example,

administrative salaries and research costs, which do not vary directly

with production.

a) fixed

b) operating

c) standard

d) unproductive

5. Depreciation expenses the wear and _________ on assets like

machinery, equipment and furnishings.


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a) age

b) change

c) repair

d) tear

6. The depreciation charge for using these assets during the accounting

period is a _________ of their original cost.

a) foundation

b) fractile

c) fragment

d) function

7. _________ income is the money that the company earns by keeping its

cash in savings accounts, term deposits, etc.

a) Illicit

b) Inactive

c) Interest

d) Internal

8. Finally, _________ tax is deducted.

a) business

b) commercial

c) income

d) value-added

9. The final entry is the _________ line, which represents net earnings of

the company during the accounting period.

a) balance

b) base


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c) black

d) bottom

10. Additionally, _________ indicates how much shareholders would

receive if the company distributed all of its net earnings as dividends.

a) EPS

b) GDP

c) GNP

d) VAT

Test №5 Cost accounting

1. _________ or cost accounting systems are part of a company's

information system and are used for tracking costs and allocations to

judge operational efficiency.

a) Corporate

b) Domestic

c) Management

d) Monitoring

2. This is an _________ accounting system, rather than one for outside

reporting.

a) inner

b) inside

c) interior

d) internal


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3. There are no _________ rules governing how a company should keep

track of cash flows for cost accounting purposes.

a) amended

b) fixed

c) required

d) restricted

4. _________ budgeting is a form of forecasted cost accounting for long-

term projects or expenditures.

a) Capital

b) Major

c) Overhead

d) Terminal

5. Cost accounting applications are major financial _________ in

everyday corporate decision-making.

a) distractors

b) drivers

c) fetters

d) operators

6. Cost accounting is important for estimating the _________ of current

and future activities.

a) foreseeability

b) profitability

c) sensibility

d) variability


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7. When good cost accounting procedures are _________, the company

may find out that they have been producing a non-profitable product

or service.

a) contracted

b) discarded

c) implemented

d) suggested

8. Cost accounting _________ managers toward company goals.

a) aggravates

b) gravitates

c) insulates

d) motivates

9. It also measures the _________ of managers and departments in the

company.

a) acceleration

b) doings

c) performance

d) seniority

10. _________ costs change in proportion to the level of production

activity, while fixed costs remain unchanged.

a) varicose

b) various

c) variable

d) versatile


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Test №6 International Accounting standards

1. With the activities and interests of investors, lenders and companies

becoming increasingly global, the Securities and Exchange

Commission is increasing its involvement in a number of forums to

develop a globally accepted, high quality financial reporting

_________.

a) bulwark

b) framework

c) outline

d) scaffold

2. Our efforts, at both a domestic and international level, consistently

have been based on the view that the only way to achieve fair, liquid

and efficient capital markets worldwide is by providing investors with

information that is _________, transparent and reliable.

a) commensurate

b) commercial

c) comparable

d) compatible

3. That is why we have pursued a dual objective of upholding the quality

of financial reporting domestically, while encouraging _________

towards a high quality global financial reporting structure

internationally.

a) convention

b) convergence

c) conversion

d) conveyance


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4. Over the last two decades, the global financial _________ has

undergone a significant transformation.

a) landscape

b) panorama

c) prospect

d) scenery

5. These developments have been _________, in part, to dramatic

changes in the business and political climates, increasing global

competition, the development of more market-based economies, and

rapid technological improvements.

a) accountable

b) amenable

c) answerable

d) attributable

6. Our efforts to develop a global financial reporting structure have been

guided by the _________ principle underlying our system of regulation

— pursuing our mandate of investor protection by promoting

informed investment decisions through full and fair disclosure.

a) bedrock

b) cornerstone

c) keynote

d) landmark

7. In 1988, we issued a policy statement that noted that all securities

regulators should work together _________, to create sound

international regulatory systems that will enhance the vitality of

capital markets.


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a) definitively

b) desultorily

c) diligently

d) distinctly

8. Currently, issuers wishing to access capital markets in different

jurisdictions must comply with the requirements of each jurisdiction,

which differ in many _________.

a) angles

b) respects

c) senses

d) views

9. Throughout this effort, we have been _________ in advocating that

capital markets operate most efficiently when investors have access to

high quality financial information.

a) headstrong

b) heavyhanded

c) singleminded

d) steadfast

10. While the accounting standards used must be high quality, they also

must be supported by an infrastructure that ensures that the

standards are _________ interpreted and applied, and that issues and

problematic practices are identified and resolved in a timely fashion.

a) righteously

b) rightfully

c) rigidly

d) rigorously


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Test №7 International Accounting standards (2)

1. High quality accounting standards are critical _________ the

development of a high quality global financial reporting structure.

a) of

b) over

c) to

d) under

2. Different accounting traditions have developed around the world in

response to varying needs of users for whom the financial information

is prepared; in some countries, accounting standards have been

_________ primarily by the needs of private creditors, while in other

countries the needs of tax authorities or central planners have been the

predominant influence.

a) drawn

b) shaped

c) sketched

d) written

3. Establishing and maintaining high quality accounting standards are

critical to the US approach to regulation of capital markets, which

depends on providing high quality information to facilitate _________

investment decisions.

a) advised

b) advisory

c) informational

d) informed


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4. High quality accounting standards are essential to the efficient

functioning of a market economy because decisions about the

allocation of capital rely heavily on _________ and understandable

financial information.

a) accredited

b) credence

c) credible

d) creditable

5. When issuers prepare financial statements using more than one set of

accounting standards, they may find it difficult to explain to investors

the accuracy of both sets of financial statements if significantly

different operating results, financial _________ or cash flow

classifications are reported under different standards for the same

period.

a) decisions

b) operations

c) positions

d) transactions

6. Questions about the believability of an entity's financial reporting are

likely where the differences highlight how one approach _________

poor financial performance, lack of profitability, or deteriorating asset

quality.

a) dwells on

b) masks

c) skims over

d) underscores


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7. Also, the audit is an important element of the financial reporting

structure because it subjects information in the financial statements to

independent and objective _________, increasing the reliability of

those financial statements.

a) autonomy

b) calumny

c) legality

d) scrutiny

8. Recent events in the United States have highlighted the importance of

high quality auditing standards and, at the same time, have _________

questions about the effectiveness of today's audits and the audit

process.

a) asked

b) assumed

c) mounted

d) raised

9. Audit firms should have a responsibility to _________ to the highest

quality auditing practices, on a world-wide basis, to ensure that they

are performing effective audits of global companies participating in

the international capital markets.

a) abide

b) adhere

c) cohere

d) comply


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10. Historically, audit firms have developed internal quality control

systems based on their domestic operations; however, as clients of

audit firms have shifted their focus to global operations, audit firms

have followed _________ and now operate on a world-wide basis.

a) along

b) practice

c) precedent

d) suit

Test №8 Taxes

1. If you are self-employed, it is your responsibility to _________ how

much tax you should legally pay.

a) consider

b) complete

c) correct

d) calculate

2. I had a letter from the office of the Collector of Taxes telling me that I

had to pay back all the money I _________ over the last 3 years.

a) due

b) indebted

c) owed

d) owned

3. The arrangement they have is that all the money that has to be paid in

tax out of their earnings comes from their _________ account.

a) joined

b) conjoined


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c) joined up

d) joint

4. Under the current legislation if you are late in paying your taxes, then

you have to face a financial _________.

a) penalty

b) punishment

c) pain

d) penalize

5. He is in a terrible rush to complete his tax returns by Tuesday

otherwise he won't be able to reach the _________.

a) dead end

b) deadline

c) dead date

d) dead stop

6. It doesn't happen very often but I actually got some money from the

tax office and with the _________ I'm going to treat myself.

remake

repeat

refund

respite

7. Before you can claim any money back on overpayment of tax, you

have to _________ an application form.

a) fill for

b) fill out


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c) fill through

d) fill with

8. You can elect, if you want, to transfer your tax free allowance to your

_________.

a) spouse

b) sponsor

c) spook

d) spokesperson

9. Until it's clearly established which tax group you are in, your

employer will be asked to _________ a certain amount of your pay.

a) withstand

b) without

c) withhold

d) withal

10. There have been so many queries about his tax situation that there is

now a huge _________ containing the details in the office.

a) full

b) filled

c) filling

d) file


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READING TESTS

Task 1 Read the following extract from an article about accounting ratios.

Choose the best word to fill each gap from A, B, C or D below.

For each question 1 - 6, mark one letter (A, B, C or D) on your answer

sheet.

There is an example at the beginning (0).

FINANCIAL STATEMENTS AND PROFITABILITY RATIOS

The financial statements of a business provide important information for

people outside the business who do not (0) _________ access to the internal

accounts. For example, existing and (1) _________ shareholders can see how

much profit a business made, the value of its assets and the level of cash (2)

_________. Although these figures are useful, they do not mean a great deal by

themselves. In order to (3) _________ any real sense of the figures in the final

accounts, they need to be properly analyzed using accounting ratios and then (4)

_________ with either the previous year's ratios or against averages for the

industry.

The profitability of a company is important and a key (5) _________ of its

success. In the profit and loss account the figures shown for gross profit and net

profit mean very little by themselves. However, by (6) _________ them as a

percentage of sales they become much more useful. The figures can then be

evaluated against those of previous years, or with those of similar companies.


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1 A eventual B promising C aspiring D potential

2 A reserves B stocks C quantities D stores

3 A reach B find C take D make

4 A differentiated B opposed C compared D balanced

5 A measure B evidence C mark D proof

6 A indicating B expressing C outlining D pronouncing

Task 2

Read the following article about the use of graphs in annual reports.

Choose the best word to fill each gap from A, B, C or D below.


sheet.

GRAPHS IN ANNUAL REPORTS

Increasing attention is being paid to the visual (7) _________ of corporate

annual reports - the charts, photographs and graphs. Academics and practitioners

alike (8) _________ the immense power of good visuals in the communication

process - a well-designed graph is worth a thousand words.

The existence of graphs of key financial (9) _________ in corporate annual

reports is a critical element of communication with stakeholders, especially non-

experts. But graphs are not formally audited and there is the potential for graphs

to be (10) _________ so that they give too positive a picture of a company's

fortunes.

A recent study has provided evidence that those responsible for annual

reports consciously or unconsciously do indeed select graphical designs that tend

to convey a more favorable impression than is (11) _________ . We, therefore,

urge those who prepare reports to pay close attention to the basic principles of

graph design and to seek clarity of meaning, before users lose (12) _________ in

the graphs displayed.


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7 A components B factors C constituents D facets

8 A conclude B distinguish C declare D appreciate

9 A transformations B variables C permutations D varieties

10 A manipulated B influenced C controlled D operated

11 A entitled B rated C warranted D earned

12 A assurance B confidence C belief D conviction

Task 3

Read the following extract from an article about evaluating company

performance. Think of the best word to fill each gap.

For each question 13 - 24, write one word in CAPITAL LETTERS on your

answer sheet. There is an example at the beginning (0).

EVALUATING COMPANY PERFORMANCE

It is clear that (0) _________ is a need for companies in both the public and

private sectors to develop appropriate performance measures. Setting performance

targets and then evaluating achievements against these targets should provide a

basis (13) _________ improved management. It is important that these

measures are not concerned simply (14) _________ financial issues.

However, many difficulties will confront anyone (15) _________ is tasked

with developing a system aimed (16) _________ setting up such targets. For

example, the way in (17) _________ objectives are set can present serious

problems. In many cases, objectives are (18) _________ vaguely drafted that

useful performance measures can rarely (19) _________ developed. Also, there

Example:

0


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is the difficulty of measuring quality, where the danger is that quantity rather (20)

_________ quality is emphasized, because, in almost (21) _________ cases,

quantity is easier to evaluate. Therefore, we get a somewhat distorted picture (22)

_________ easily measurable aspects of performance take precedence over those

that are more difficult to measure.

(23) _________ the importance of evaluating performance is recognized,

the difficulties involved should not be overlooked. An awareness of these

difficulties and an understanding of their possible impact should, however, lead

(24) _________ the development of more effective and better balanced systems.

Task 4

Read the following introduction to a book about international standards of

accounting. Use the words in the box to the right of the text to form one

word that fits in the same numbered gap in the text.

For each question 25 - 30, write the new word in CAPITAL LETTERS on

your answer sheet. There is an example at the beginning (0).

IMPLEMENTING INTERNATIONAL STANDARDS

A financial reporting system supported by strong governance, high-quality

standards and sound regulatory frameworks is key to economic (0) _________.

Indeed, high quality standards of financial reporting, auditing and ethics underpin

the trust that investors place in financial and non-financial information and, thus,

play an integral role in a country's economic growth and financial (25)

_________.

Example:

0


30

As the forces of (26) _________ prompt more and more countries to open

their doors to foreign investment, and as business (27) _________ across borders

becomes common, both the public and private sectors are (28) _________

recognizing the benefits of having a widely understood financial framework

supported by strong globally accepted auditing standards.

The benefits of a global financial reporting framework are numerous and

include: greater comparability of financial information for investors; greater (29)

_________ on the part of investors to invest across borders; lower cost of capital;

greater (30) _________ in the allocation of resources; and higher economic

growth.

Task 5

Read the following extract from a website about the future of accountancy.

Use the words in the box to the right of the text to form one word that fits

in the same numbered gap in the text.

For each question 31 - 36, write the new word in CAPITAL LETTERS on

your answer sheet.

THE FUTURE FOR ACCOUNTANCY

The profession's future is certain to be more structured, ever more

governed by global standards and under more scrutiny from a (31) _________ of

national and international bodies. Therefore accountants, particularly those

working in small and medium practices, must change their mindset. They must

start leading change; embrace (32) _________; continuously improve their skills;

invest in technology and demonstrate a fundamental (33) _________ to

professional ethics.

Audit will be subjected to unprecedented scrutiny and auditors will have to

expect to report on the (34) _________ of their judgment and their lack of bias.


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Auditors will have to expect that they will be reporting on an organization’s

internal control (35) _________, but will also have to move rapidly to include

detection of fraud as part of their audit report, otherwise markets will remain (36)

_________ about the value of audit.

Task 6

Read the questions below and the extract on the opposite page from an

article discussing the value of an MBA qualification for accountants.

Which section (A, B, C or D) does each question 37 - 42 refer to?


sheet.

You will need to use some of these letters more than once.

There is an example at the beginning (0).

37. Some people want to do an MBA because they do not already have a

university degree.

38. An MBA can help people working in finance not to rely on purely

numerical information.

39. People on an MBA course engage in practical as well as academic

learning.

40. Possessing an MBA does not automatically lead to promotion.

41. An important part of doing an MBA is the contacts made on the course.

42. Where you take an MBA is of considerable importance.


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IS IT WORTH ACCOUNTANTS STUDYING FOR AN MBA?

A

As a business qualification the MBA (Master of Business Administration) degree

has immense appeal to accountants. It is a highly respected qualification that can

open many doors to the employment market, which were previously firmly shut.

In general, business schools aim to provide MBA programmes that offer students

from all backgrounds a thorough knowledge of the mechanics of management

theory, encompassing human resources, finance, operations management,

marketing and information systems. Lectures are coupled with regular group

discussions, case studies and simulations.

B

Jane Baldwin, head of training with a large accountancy firm, is under no illusion

that the market place for financial services is experiencing a period of

transformation. 'No-one can stand still. As accountants, we've got to continue to

develop our knowledge and skills. An MBA from any business school will equip

graduates with a business element, a specialist element, and also help them to

develop their interpersonal skills because the work that is done is not just as an

individual but as a team as well,' says Baldwin. She also cites networking as a

distinct advantage of an MBA programme.

C

As managing director of an international recruitment consultancy for finance

professionals, Graham Simpson, however, has reservations about the importance

of an MBA in the employment market. 'A lot of accountants ask us whether they

should study for an MBA,' he begins. 'I would say that a number of them want to

go for an MBA to compensate for some inadequacy they perceive themselves as

having in the employment market.' The inadequacy he is referring to is the lack


33

of a graduate qualification. Simpson admits that an MBA does have some value,

but argues that the status of the business school is much more likely to get you a

job than the MBA itself.

D

Someone who has recently completed an MBA is Michael Taylor, an

international corporate tax specialist. Taylor chose to study for an MBA for the

sake of his own personal development. Although he was recently made head of

his department, he admits that, in his line of work, an MBA would not greatly

enhance career progression. That said, he stresses that his studies enable him to

empathize with his clients and offer a better service. 'I feel that taking an MBA

prevents one from taking too narrow a view of one's professional duties. Having

an MBA has allowed me to move away from just dealing with figures. If I use

figures to back up what I say, then that's fine; but it doesn't matter if I don't as the

qualitative issues may well be more important.'

Task 7

Read the following extract from a text about budgeting and the questions

on the opposite page.


sheet for the answer you choose.

COMPANY BUDGETS

Most senior executives know that the competitive battles ahead will

involve not only ensuring that their company gets better at what it does, but is

also different from others. To achieve this they need talented managers who can

produce more imaginative strategies for growth and improvement, make faster

decisions, be more flexible, be better prepared to anticipate threats and


34

opportunities, and who can consistently improve quality and customer

satisfaction. To this list you can add any number of other key competitive issues

that are becoming more important as the service economy gathers speed.

But executives also know that none of these aspirations are attainable

without changing the way the business is run. While most companies have tried

to address these issues by reducing management layers and focusing on the

customer, few have been successful. One of the reasons is the inability to shift the

management philosophy from one of top-down control to bottom-up

empowerment. It is because budgets are most commonly used by organizations to

exercise control that they are at the centre of this thorny issue.

Budgets are, in effect, barriers to change and fail to do well what most

managers think they do well -that is, provide order and control. They are barriers

for many reasons. Firstly, they reinforce the command-and-control management

model and thus undermine attempts at organizational change, such as delegation

and empowerment. In addition, they tend to set a ceiling on growth potential and

a floor for cost reductions, thus stifling real improvement breakthroughs. Strong

brands, skilled people, excellent management processes, strong leadership, and

loyal customers are assets that are outside the measurement orbit of the

accounting system. Budgets are typically extrapolations of existing trends, with

little attention being paid to anticipatory models. What is more, they act as

barriers to exploiting co-operation across the business units.

If asked why we use budgets, most managers would probably answer, 'to

set targets and control business operations'. But budgets evolved in the 1920s to

help growing businesses manage their capital resources and plan their cash

requirements. It was not until the 1960s that budgets were used to set targets,

control operations and evaluate managerial performance. While planning remains

an important part of the management process, it is widely believed that setting

targets and controlling and evaluating performance using budgets is


35

fundamentally flawed because it directs managerial behavior towards achieving

predetermined financial targets rather than harnessing the energy of people at all

levels towards continuously improving competitive strategies and customer-

oriented processes.

So, if existing budgeting systems have such crucial weaknesses, why do we

still rely on them? In fact, accountants have tried to improve them. Zero-based

budgeting and activity-based budgeting represent valiant efforts to update the

process, but they tend to be complex project-driven approaches that fail to evolve

into standard management practices. Basically, though, budgeting has not

changed because it is a part of unchallenged tradition. Some companies are re-

engineering their budgeting processes to make them faster and cheaper, but such

an approach fails the test, as it leaves the behavioral weaknesses in place.

What does all this mean for the role of management accountants? Many

accountants now accept that setting fixed financial targets and measuring

performance against them makes little sense when the competitive environment is

subject to continuous change. Plans and strategies need to unfold continuously as

new knowledge emerges. Above all, management accountancy should be

concerned with the future and ensuring that the right questions are asked and the

right decisions are taken that add maximum long-term value. It is hard, though, to

see how these changes can be managed successfully while leaving the current

budgeting system in place.

43. To deal with the competition they are likely to meet in the future,

companies should look for managers who will

A. recognize and reward talented people

B. bring considerable experience to the job

C. respond immediately to financial difficulties

D. take a creative approach to developing the business


36

44. According to the second paragraph, why have companies failed in their

response to key competitive issues?

A. Authority for decision-making is too restricted.

B. Customer needs are not given sufficient priority.

C. There are too many layers of management.

D. Budgets are not adequately monitored.

45. One problem resulting from the way budgets are usually set is that

A. they give too optimistic a view of a company's growth potential.

B. they allow staff to avoid taking responsibility for their decisions.

C. they tend to produce too many targets for the workforce to meet.

D. they limit innovative behavior because they focus on past

experience.

46. According to the writer, changes in the use of budgets since the 1960s have

prevented managers from

A. giving enough time to planning.

B. concentrating on motivating the workforce.

C. working out realistic targets.

D. assessing the competence of their employees.

47. According to the writer, why have new budgeting systems not been widely

adopted?

A. Traditional systems are relatively easy to operate.

B. New systems have proved slow and expensive.

C. Traditional systems are part of accepted practice.

D. New systems have proved unpopular with managers.


37

48. According to the final paragraph, many management accountants now

believe that

A. companies should be prepared to modify their strategies.

B. budgeting should not influence management decisions.

C. too many company decisions are taken with a short-term view.

D. targets should reflect recent trends in an industry sector.

Список использованных источников

1. http://www.english-test.net/esl/business-english-lessons.html

2. http://www.financialenglish.org/downloads/icfe_readingsp_06.pdf

3. http://www.financialenglish.org/downloads/icfe_reading_pp_may07.pdf


38

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