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注会综合阶段英语水平提升班——第一单元

中华会计陈老师 网校老师 发表于 2017-10-29 16:01:56 | 评论:0  查看:422次 [注会英语]
Unit 1   Internal control
一、Key terms
Corporate governance                 公司治理
Internal audit                                 内部审计
Agency theory                                 代理理论
Control environment                 控制环境
Control procedures                     控制程序
Risk assessment                         风险评价
Sharing of information                信息沟通
Monitoring                                         监控
二、Key points
1. Internal control
Internal control consists of the policies and processes that taken together to facilitate its effective and efficient operation, ensure the quality of financial reporting and compliance with applicable laws and regulations. They provide reasonable assurance that organizations will fulfill their strategic objectives.
内部控制是为了合理保证企业实现以下战略目标而实施的各种政策和程序:提高企业运营的效益和效率,保证财务报告的质量和合规性。
2. Internal control frameworks
Internal control frameworks include the control environment within which internal controls operate. Other important elements are the risk assessment and response processes, the sharing of information and monitoring the environment and operation of the control system.
内部控制框架包括控制环境(基础),其他重要要素是风险评估、控制活动、信息与沟通和监察(环境和控制活动的运行)。
3. The control environment
The control environment is influenced by management’s attitude towards internal control, the organizational structure and the values and abilities of employees.
控制环境受到管理层对内控的态度,组织结构以及员工的价值观和能力的影响。
4. Both internal and external auditors review controls, and external auditors may place reliance on internal auditors’ work. Reports on the results of internal audits should highlight the risks identified, the weaknesses found in control, the consequences of the problems found and the recommendations for improvements.
内审和外审都要审查内控,外审可以依靠内审工作。内审报告应当突出确定的风险,内控的薄弱环节,发现问题的后果以及改进的建议。
5. The cost-benefit approach(成本收益原则)
Sometimes the benefits of controls will be outweighed by their costs, and organizations should compare them. However it is difficult to put a monetary value on many benefits and costs of controls, and also the potential losses if controls are not in place.
有时控制的成本将超过其收益,组织应当对两者进行衡量。然而,用货币衡量把收益和控制的成本,以及如果控制不到位将导致的潜在的损失,这是很困难的。
三、Reading materials
1. Corporate governance
Corporate governance is a set of relationships (一整套关系)between a company’s directors, its shareholders and other stakeholders(利益相关者). It also provides the structure through which the objectives of the company are set, and the means of achieving those objectives and monitoring performance are determined.
2. The agency problem
The agency problem derives from the principals (委托人) ( owners) not being able to run the business themselves and therefore having to rely on agents (代理人)(directors ) to do so for them. This separation of ownership from management (所有权和经营权的分离)can cause issues if there is a breach (违背,破坏) of trust by directors by intentional action, omission, neglect or incompetence. This breach may arise ,because the directors are pursuing their own interests (追求个人利益) rather than the shareholders’ or because they have different attitudes to risk-taking.
3. Key issues in corporate governance reports
Key issues in corporate governance reports include the role of the board, the quality of financial reporting and auditing, directors’ remuneration(薪酬), risk management and corporate social responsibility.
4. Duties of directors
Duties of directors: These include the fiduciary duties (诚信责任)to act in the best interests of the company, use their powers for a proper purpose, avoid conflicts of interest (利益冲突)and exercise a duty of care (注意义务).
5. Composition and balance of the board
Composition and balance of the board: An organization should not be dominated by a single individual, or run by a small group centered round the CEO and CFO. The board must also be balanced in terms of skills and talents and also in terms of age. (independent non-executive directors) (独立非执行董事)
6. Types of procedure
1)Segregation of duties(不相容职务分离)
For example, the chairman/chief executive roles should be split.
2)Physical
These are measures to secure the custody of assets, e.g. only authorized personnel are allowed to move funds on to the money market.
3)Authorization and approval (授权审批)
All transactions should require authorization or approval by an appropriate responsible person, limits for the authorizations should be specified, and e.g. a remuneration committee is staffed by non-executive directors to decide directors’ pay.
4)Management
Management should provide control through analysis and review of accounts, e.g. variance analysis, provision of internal audit services.
5)Supervision
Require supervision of the recording and operations of day-to-day transactions. This ensures that all individuals are aware that their work will be checked, reducing the risk of falsification or errors, e.g. budgets(预算), managers’ review, exception or variance reports.
6)Organization
Organization: identify reporting lines, levels of authority and responsibility. This ensures everyone is aware of their control responsibilities, especially in ensuring adherence to management policies, e.g. avoid staff reporting to more than one manager. Procedures manual will be helpful here.
7)Arithmetical and accounting (稽核和会计)
Arithmetical and accounting: to check the correct and accurate recording and processing of transactions, e.g. reconciliations, trial balances.
8)Personnel(人事)
Personnel: Attention should be given to selecting, training and qualifications of personnel, as well as personal qualities, the quality of any system is dependent upon the competence and integrity of those who carry out control operations, e.g. use only qualified staff as internal auditors.
四、Practice question
A UK public company has an official listing for its shares. There are three major business divisions and each consists of a number of operating units. The management structure is largely decentralized(分权制), and many operating and spending decisions are taken at operating unit level.
Describe suitable internal controls that should be set up?
Sample answer:
1. The need for a control environment
1)A suitable control environment should be provided by a combination of culture and management style, together with management control mechanisms.
2)Lines of responsibilities (责任权限)
Despite the decentralization of authority within the group, management control mechanisms should ensure that there are clear lines of responsibility and accountability running throughout the group,that budgeting systems are in place, and that management information systems exist for the provision of performance reports in a timely manner.
3)Operating units should be given clear and achievable targets aligned with (一致)the group’s overall objectives. There will be some delegation of authority (授权) to spend, but within clearly stated limits.
2. Evaluation of risks
1)The board should have a focus on the control and containment of risks, based on a cost/benefit approach. Controls are likely to include a board policy not to invest in any operation outside a specific area of competence, so that acquisitions are not made that alter the risk profile (风险概况) of the company’s businesses.
2)Monitoring of problem operations
There should be an information system that reports on performance in a way that non-performing or under-performing (绩效不佳)units can be identified as soon as possible. New operations and under-performing units should be monitored closely by the board.
3)Other risks
The board should also consider other risks on a regular basis (定期), such as the risk from new technology. The risk of non-compliance with legal and regulatory requirements (违规风险)might be controlled at head office level.
3. Control procedures
The group should have a range of control procedures in place, the internal auditors should check that the financial controls are operating effectively. Controls include specific limits on the authorization of spending (支出权限)at different levels of management, a suitable segregation of duties in the accounts department, the use of accounting controls (such as bank reconciliations), and suitable controls for computer systems (password controls, physical security for cheque books and computer equipment, etc).
4. Information and communication systems
The group should prepare budgets and budget packs for each operating unit, and budget information should be communicated to senior managers in each unit. There should be regular budget reports comparing actual results against the budget.
5. Monitoring and corrective action
There should be regular reports to the main board on internal controls, and the audit committee (审计委员会)should be given responsibility for monitoring the control system. The board should also discuss the risk and control implications of major changes, such as new acquisitions. Whenever a weakness or failure in the control system is discovered, corrective action should be taken.

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