Unit 1: INTRODUCTION TO ACCOUNTING

1. In broad and general terms, what is the purpose of accounting?

Accounting is the process of identifying, measuring, and interpreting financial activity.
2. Why is the knowledge of accounting terms and concepts useful to persons other than
professional accountants?
Accounting function is vital to every unit in our society. An individual must account for his or
her income and file income tax returns. Often an individual must supply personal accounting
information to buy a car or home, qualify for a college scholarship, secure a credit card, or obtain
a bank loan.
3. What does the term accounting system mean? What are the main functions of the
accounting system?
The accounting system comprises the methods used by a business to keep records of its
financial activities and translate these activities into periodic accounting reports (hệ thống kế
toán)
4. What are the means of creating accounting information? (phương thức để tạo ra thông tin
kế toán)
 Recording: Typical transaction of business events which can be expressed in monetary
terms must be entered into accounting records.
 Classifying: classify transactions and events into related groups or categories
 Summarizing: To organize the accounting information in a proper form, we summarize
the classified information into accounting reports designed to meet the information needs
of business decision-makers.
5. What does the accounting process involve?
 Creating accounting information: recording, classifying, summarizing
 Communicating: communicate this information to interested parties
 Interpreting: interpret accounting information related to specific business decisions
6. What two main groups do users of financial information fall into?
 External users: groups or individuals who are not directly concerned with the entity’s
day-to-day operations but are indirectly related to it. These users include owners, lenders,
suppliers, potential investors and creditors, employees, tax authorities, etc.
 Internal users: have all levels of management personnel within an entity responsible for
planning and controlling operations.
7. What are the main branches of accounting?
Two essential components have been identified:
 Financial accounting: primarily designed to provide financial statements to external
users for their decision processes. However, internal users also have access to the
statements and use them in many of their decisions.
 Managerial accounting: are primarily designed to supplement the financial accounting
information for internal users, thus assisting them in reaching certain operating decisions.
8. What are the distinctions between accounting and bookkeeping?
  Bookkeeping means the recording of transactions, the record-making phase of
accounting. The recoding phase tends to be mechanical and repetitive; it is only a small
part of the accounting field and probably the most straightforward part.
 Accounting includes the design of accounting systems, preparation of financial
statements, audits, cost studies, development of forecasts, income tax work, computer
applications to accounting processes, an the analysis and interpretation of accounting
information as an aid to making business decisions.
A person might become a reasonably proficient bookkeeper in a few weeks or months; however,
to become a professional accountant requires several years of study and experience.
9. What is the principal function of public accountants? What other services are commonly
rendered by public accounting firms?
In terms of career opportunities, the field of accounting may be divided into: public accounting,
private accounting, governmental accounting
Public accountants are independent professional persons comparable to attorneys or physicians
who offer accounting services to clients for a fee. The requirements regarding the right to
practice public accounting vary among countries.
The three primary services rendered by public accountants are auditing, income tax services, and
management advisory services.
10. What is the scope of private accounting?
An accountant in the private industry is employed by a single enterprise.
The chief accounting officer of a medium-sized or large business is usually called the controller
in recognition of the fact the one of the primary uses of accounting data is to aid in controlling
business operations. They are part of the top management team charged with running the
business, setting its objectives, and seeing that these objectives are met.
The accountants in a private business must record transactions and prepare periodic financial
statements from accounting records. There are some specialized phases of accounting: the
design of accounting systems, cost auditing, financial forecasting, tax accounting, internal
auditing, and managerial accounting.
11. What is the purposes of governmental accounting?
Government officials rely on financial information to help direct their agencies’ affairs.
Objective of earning a profit is absent from public affairs. Governmental agencies employ
accountants to prepare budgets and audit various governmental departments’ accounting records.
Every agency of government at every level must have accountants in order to carry out its
responsibilities.

Write an essay of 300 words explaining the role of accounting in the business world
Accounting serves as the lifeblood of any successful business. It transcends mere number
crunching and delves into the very core of financial health, strategic decision-making, and
ultimately, a company's future. Its importance can be understood through its diverse roles, each
contributing significantly to a thriving organization.
Firstly, accounting provides transparency and accountability. By meticulously recording and
analyzing financial transactions, it paints a clear picture of the company's financial standing. This
transparency empowers key stakeholders, including investors, creditors, and management, to
make informed decisions based on accurate data. Financial reports, meticulously prepared by
accountants, serve as a crucial communication tool that fosters trust and confidence in the
organization.
Secondly, accounting functions as a powerful tool for financial forecasting and planning. By
analyzing past trends and current data, accountants can predict future performance, identify
potential risks and opportunities, and assist in developing realistic budgets. This foresight
enables businesses to allocate resources efficiently, adjust strategies proactively, and make
informed investments that propel them towards their goals.
Thirdly, accounting ensures compliance with various legal and regulatory requirements.
Every business operates within a framework of established rules and regulations. Accountants
play a vital role in ensuring adherence to these regulations, whether it be tax laws, accounting
standards, or industry-specific regulations. This compliance safeguards the business from legal
repercussions and potential financial penalties, fostering a stable and secure operating
environment.
Furthermore, accounting plays a pivotal role in evaluating business performance and
identifying areas for improvement. By analyzing financial data alongside operational metrics,
accountants can pinpoint areas of inefficiency, assess the effectiveness of marketing campaigns,
and evaluate the profitability of different product lines. This data-driven analysis empowers
businesses to make strategic adjustments, optimize operations, and maximize profitability.
Finally, accounting contributes to effective resource allocation and risk management. By
understanding the financial implications of various decisions, accountants can guide
management towards optimal resource utilization. Additionally, they can identify potential
financial risks, assess their impact, and develop proactive mitigation strategies. This risk
management ensures the long-term financial sustainability and stability of the business.
In conclusion, accounting is not merely a record-keeping function; it is the cornerstone of sound
business practices. Its multifaceted role in providing transparency, enabling strategic decision-
making, ensuring compliance, and driving performance optimization makes it an indispensable
tool for any organization seeking success in the competitive business world.

Unit 2: CAREER IN THE FIELD OF ACCOUNTANCY

1. What is accounting? Why is it necessary for companies and organizations?
Accounting is the process of identifying, measuring, and interpreting financial activity.
Accounting is the backbone of any organization and offers a wide number of attractive careers
within it.
 Accounts team within a company:
  Sales ledger clerks & purchase ledger clerks: record the financial information from all
transactions the company makes.
 Payroll clerk: process staff salaries and the tax which occurs from them
 Management accountant: finalize the accounts and prepares the annual financial
statements
 Save the company money by minimizing the tax payable and delaying payments so
companies can earn interest from their banks
 Auditors: ensure that the accounts were done in the correct way and that everything was
accounted for
 Tax advisors: help their clients lower their tax bill thanks to their in-depth knowledge of
taxation law and specifically what a client can off-set against tax
2. Why do you think accounting is seen as boring?
(tra mạng)
Complexity and Technical Nature: Accounting involves dealing with intricate rules,
regulations, and principles. The technical nature of the subject matter, filled with jargon and
specific methodologies, can be intimidating and uninteresting to those who are not well-versed in
the field.
Perception of Repetition: Some aspects of accounting involve routine and repetitive tasks, such
as data entry, reconciliations, and periodic reporting. The monotony of these activities can
contribute to the perception of boredom.
Focus on Compliance and Regulation: Much of accounting is centered around ensuring
compliance with regulatory standards and financial reporting requirements. While crucial for
transparency and accountability, the emphasis on compliance can make accounting seem rule-
bound and rigid.
Lack of Creativity: Compared to fields that involve more creativity and innovation, accounting
is often seen as a structured and rule-based discipline. The perceived lack of creativity may
contribute to the belief that it is a dull profession.
Limited Visibility of Strategic Role: While accountants play a crucial role in financial decision-
making and strategic planning within organizations, the public perception often focuses on the
routine aspects of the profession rather than its strategic contributions.
Negative Media Portrayals: Media portrayals of accountants in popular culture often reinforce
stereotypes of accountants as number-crunchers with little excitement in their professional lives.
Movies and TV shows may depict accountants in a stereotypical and uninteresting manner.
Misperception of Job Roles: Many people may not fully understand the diverse roles within the
accounting profession. They may associate accounting solely with bookkeeping and tax
preparation, overlooking roles in financial analysis, auditing, and advisory services.
3. Which of the jobs mentioned would be most interesting for you?
4. Why is it so important for accountants to be ethical?
(tra mạng)
Maintaining Public Confidence:
Accurate and reliable financial reporting is essential for maintaining public trust in businesses,
financial institutions, and the government. Ethical accountants ensure that financial reports are
free from manipulation or fraud, safeguarding the integrity of the market and protecting investors
and stakeholders. A loss of confidence in financial information can have devastating
consequences, like hindering economic growth and causing market instability.
Preventing Financial Misconduct:
Unethical practices in accounting can lead to financial scandals, embezzlement, and even
economic collapse. By adhering to ethical codes and principles, accountants play a vital role in
preventing such misconduct by identifying and reporting red flags, refusing to participate in
unethical schemes, and holding themselves accountable for their actions.
Promoting Fairness and Transparency:
Ethical accountants ensure that everyone is treated fairly and that financial information is
presented transparently. This includes adhering to accounting standards, accurately disclosing
risks and uncertainties, and avoiding conflicts of interest. This transparency is crucial for
maintaining a level playing field in the market and promoting trust between companies and
stakeholders.
Supporting Decision-Making:
Businesses and investors rely on accurate financial information to make informed decisions.
When accountants act ethically, they provide reliable data and insights that guide effective
resource allocation, strategic planning, and investment decisions. This ultimately contributes to
improved business performance and economic growth.
5. (Bonus) Qualities that a potential accountant should have:
 Perfectionist: only accept exact result
 Good eye for detail & lover of number: have to deal with large volumes of data
 Be able to advise their clients on the best course of action to take so as to save money and
at the same time stay within the local accounting standards
 Follow strict rules and codes of conducts to make sure they do everything in a legal way.

Write a composition expressing your own opinion on the topic:Why do people want to become
an accountant? Use the following plan:
Introduction
Paragraph 1: state topic and your opinion clearly
Main body
- Paragraph 2: viewpoint 1 and reason
- Paragraph 3: viewpoint 2 and reason
- Paragraph 4: give the opposing viewpoint and reasons
Conclusion
Final paragraph: restate your opinion, using different words
Useful words and phrases:
- To list viewpoints: To begin with, In the first place, Firstly, Secondly, Finally, etc.
- To add viewpoints: What is more, In addition, Furthermore, Besides, not only … but also,
etc.
- To present the other side of the argument: Some people argue that…, As opposed to the
above ideas, Contrary to what most people believe, etc.
- To express opinion: I believe, In my opinion, I think, In my view, I strongly believe, I feel
that, To my mind, It seems to me that, etc.
Essay:
Accounting often conjures images of meticulous spreadsheets and endless calculations, leading
to the assumption that only those with a natural affinity for numbers pursue this career. However,
the reasons why individuals choose to become accountants are far more nuanced and extend far
beyond a love for math.
Firstly, the intellectual challenge inherent in accounting draws many to the field.
Deciphering complex financial statements, identifying patterns in seemingly random data, and
unraveling intricate accounting principles provides a sense of intellectual fulfillment and
satisfaction for those who enjoy problem-solving and logical reasoning. The constant evolution
of accounting standards and the emergence of new technologies ensure that there is always
something new to learn and master, keeping the profession intellectually stimulating.
Secondly, the promise of career stability and security is a highly attractive factor for
aspiring accountants. Unlike many other fields, accounting boasts a robust job market with a
consistent demand for qualified professionals. This stability, coupled with the potential for
lucrative salaries and benefits, provides individuals with a sense of financial security and peace
of mind. This is especially appealing to those seeking a predictable and secure career path.

However, it is important to acknowledge that not everyone is drawn to the rigid structure
and meticulous nature of accounting. Some individuals may find the field too restrictive and
lacking in creativity, preferring careers that offer more flexibility and freedom. Additionally, the
perception of accountants as being introverted and conservative may deter those who thrive in
fast-paced, extroverted environments.
Despite these counterpoints, I believe that the unique combination of intellectual stimulation,
career stability, and societal impact is what truly sets the accounting profession apart. It offers a
fulfilling career path for those who enjoy problem-solving, value stability, and desire to make a
positive contribution to the world. Whether it's helping individuals manage their finances,
ensuring the financial health of businesses, or contributing to economic development,
accountants play a vital role in society.

Unit 3: MAKING A CAREER IN ACCOUNTING (II)

1. Should you need a university education to become an accountant?
University education is the most common route into accounting but it is not the only way, many
firms offer apprenticeships where you learn while you work. This means starting at the bottom so
for the first year you are more likely to be making the tea than preparing the balance sheet, or
trial balance.
Those people who have graduated with a degree in accounting can expect to jump in at the deep
end and start dealing with the debits and credits that make up the foundation of accounting.
However further training will usually be given before you are expected to work on the more
complex accounting issues such as deferral.
2. Do companies expect too much from their employees?
3. What is your accounting ambition?
4. (Bonus) Characteristics of areas of accounting:
Public accounting: perhaps the most common choice because they employ the most CPAs
(Certified Public Accountant). Public accounting offers a wide variety of roles such as corporate
finance, due diligence, tax advice,...
*Due diligence là một cuộc điều tra về một doanh nghiệp hoặc một cá nhân trước khi ký một
hợp đồng, hoặc một hành động với một tiêu chuẩn tỏ sự thận trọng nhất định
Private accounting: Accountants need to be familiar with the often confusing rules on double
taxation and be up-to-date on the exchange rate of the foreign currency

Write an essay of 300 words on what makes a good accountant

In the world of business, few figures are as crucial yet often underappreciated as accountants.
Beyond the veil of numbers and reports lies a profession demanding a unique blend of hard and
soft skills. A good accountant is not just a master of calculations, but a strategic partner, a trusted
advisor, and a pillar of financial stability.
The foundation of a good accountant is undoubtedly their technical expertise. A thorough
understanding of accounting principles, tax regulations, and financial software is paramount.
Accuracy and attention to detail are their watchwords, ensuring the integrity of every transaction.
They are analytical thinkers who can dissect complex financial data, identify trends, and translate
them into actionable insights.
However, technical prowess alone is not enough. A good accountant understands the importance
of clear and concise communication. They can explain intricate financial concepts in layman's
terms, fostering trust and understanding with clients. They are active listeners, patiently
addressing concerns and providing guidance with empathy and respect.
Beyond communication, soft skills like organization, time management, and problem-solving are
essential. Juggling multiple tasks, meeting deadlines, and thinking on their feet are everyday
realities for a good accountant. They are also adaptable, constantly learning and adapting to the
ever-changing landscape of financial regulations and technologies.
The heart of a good accountant lies in their unwavering integrity. They are ethical and honest,
upholding the highest professional standards. Client confidentiality is paramount, and they act
with transparency and fairness in all their dealings. This ethical compass ensures their clients'
trust and confidence, solidifying their position as valuable advisors.
Finally, a good accountant understands the power of collaboration. They are team players,
working effectively with colleagues and clients to achieve shared goals. They are proactive,
anticipating needs and offering valuable insights. They are also lifelong learners, constantly
seeking to refine their skills and stay abreast of the latest developments in the field.
In conclusion, a good accountant is not just a bookkeeper or a tax preparer. They are the unsung
heroes of the financial world, weaving a tapestry of technical expertise, communication skills,
soft skills, ethical conduct, and collaborative spirit. They are the guardians of financial well-
being, ensuring the smooth operation of businesses and the financial security of individuals.
Through their dedication and skill, they play a vital role in driving economic growth and shaping
the financial landscape for the future.

Unit 4: BOOKKEEPING
1. Have you ever done any bookkeeping?
2. Why do you think bookkeepers are not as respected as chartered/certified accountants?
Bookkeeping is the recording of any financial transactions.
A lot of people look down on bookkeepers (accounts payable), and the act of bookkeeping is
often seen as one of the less challenging aspects of accountancy. However, without good
bookkeepers, accounts would find that they were faced with a huge amount of extra work.
Accountants create reports from the financial transactions, which were recorded, and file the
appropriate forms with the government. Bookkeepers provide the accountant with the source
information on which these reports are based.
Bookkeepers usually also deal with petty cash and authorised its use, VAT returns and personal
tax returns.

(tra mạng) Because of Scope of work:

 Chartered/certified accountants: Take on broader responsibilities, providing strategic
financial advice, analyzing complex financial data, and ensuring compliance with
regulations. They often lead teams of bookkeepers and may work directly with executive
management.
 Bookkeepers: Primarily handle the day-to-day financial tasks, ensuring accuracy and
completeness of financial records. While their work is essential, it may be perceived as
less strategic or complex than that of chartered/certified accountants.
3. Can you think of anything which accountants do, that bookkeepers can’t?
(tra mạng)
  Complex Analysis and Interpretation: Accountants analyze financial data to identify
trends, patterns, and insights beyond basic record-keeping. They can assess performance,
make forecasts, and provide strategic financial advice to management.
 Compliance and Regulation Expertise: Accountants stay updated on complex financial
regulations and ensure the organization adheres to relevant accounting standards, tax
codes, and legal requirements.
 Planning and Strategy: Accountants contribute to financial planning and budgeting
processes, assessing risks, advising on investments, and helping executives make
informed strategic decisions.
 Advanced Financial Expertise: Accountants possess deeper understanding of taxation,
corporate finance, investment analysis, and other specialized areas, allowing them to
handle complex financial situations and transactions.
4. What is the significance of the double entry system for accounting? What other
accounting methods do you know?
Double-entry bookkeeping:
By using double-entry you can prove the accuracy of the records to ensure that the two sides
agree.
The double entry system works by recording two sides to each income or expenditure
transaction. For example, if you buy a new computer for the office, the two sides would be that:
The amount of money in your bank account would decrease and the value of assets in the office
would increase.
Other accounting method: Single-entry bookkeeping
In the single-entry system, each transaction is recorded only once. This means that the record
does not accurately show the effect of the transaction and as such is less effective. Single-entry
bookkeeping is often used by sole traders starting out in business as it requires little expert
knowledge.

For accountants, effective writing skills can be as important as the ability to crunch the numbers.
Your professional development and competitive edge depend as much on your ability to
communicate what you’ve found as the findings and recommendations themselves.
Write an essay of 300 words about the key writing challenges accountants face when trying to
do this?

In a world obsessed with balance sheets and bottom lines, accountants are often seen as the silent
translators of financial realities. Yet, their value transcends mere number crunching. Effective
communication, particularly through writing, is the bridge that connects the intricate world of
figures to the decisions that shape businesses. But for accountants, this bridge can be fraught
with challenges.
The first hurdle lies in the jargon chasm. Accounting is a language unto itself, rife with
acronyms and technical terms that leave non-financial audiences adrift in a sea of confusion.
Imagine explaining depreciation schedules to a marketing team using only industry jargon. The
result? Glazed eyes and lost opportunities. Accountants must master the art of translating
complex concepts into plain language, using clear explanations and relatable examples to make
their findings accessible.
Then comes the delicate dance of balancing accuracy with readability. Accountants walk a
tightrope between precision and engagement. While adhering to professional standards and
avoiding ambiguity is essential, dense, technical prose can alienate readers. The key lies in
finding the sweet spot, ensuring the message is both technically sound and engaging, perhaps by
employing visuals, storytelling elements, or even humor to keep the audience hooked.
Another challenge arises from the diverse audience spectrum. Accountants write for a
multitude, from executives needing concise summaries to clients seeking detailed analyses. Each
audience has unique needs and varying levels of financial literacy. The ability to tailor writing
style, tone, and level of detail becomes paramount. Imagine explaining the same financial
statement to a CEO and a small-business owner – the approach would be worlds apart.
Furthermore, the very nature of financial information demands meticulous attention to
accuracy and completeness. Even a minor error can have significant consequences.
Accountants must be meticulous fact-checkers, double-checking calculations, and verifying
sources. This meticulousness extends to adhering to formatting and style guidelines, ensuring
clarity and professionalism in presentation.
Finally, the accounting landscape is constantly evolving, with new regulations, technologies, and
communication tools emerging regularly. Accountants must stay abreast of these changes and
adapt their writing styles and approaches accordingly. Failure to do so can leave them
communicating in a bygone era, their message lost in the winds of change.
In conclusion, the writing challenges faced by accountants are as diverse as the numbers they
wrangle. Yet, by mastering the art of clear communication, accountants can transform from silent
translators to trusted advisors, adding immense value to their organizations and navigating the
ever-changing world with confidence. The next time you see an accountant, remember – they're
not just number-crunchers; they're storytellers, educators, and influencers, shaping the future one
articulate word at a time.

Unit 5: THE PRINCIPLES AND STANDARDS OF ACCOUNTING

1. What is the importance of applying accounting principles and standards in preparing
reports?
Accuracy and Reliability:
These principles and standards act as a framework for consistent and accurate recording of
financial transactions. This ensures the reports reflect the true financial health of the entity,
allowing users to rely on the information confidently.
They minimize discrepancies and subjectivity, reducing the risk of errors and manipulation, thus
enhancing the overall trustworthiness of the reports.
Transparency and Comparability:
By establishing a common language for financial reporting, accounting principles and standards
facilitate transparency. Anyone reading the reports can readily understand the information
presented, regardless of their accounting background.
This standardization allows for easy comparison of financial performance across different
companies or within the same company over time. Investors, creditors, and other stakeholders
can make informed decisions based on such comparisons.
2. Should accounting principles be standardized across the world?
Arguments for standardization:
 Increased comparability: Standardized accounting principles would make it easier to
compare the financial performance of companies from different countries. This would be
beneficial for investors, lenders, and regulators.
 Reduced costs: Companies would only need to comply with one set of accounting
standards, which would save them time and money.
 Improved transparency: Standardized accounting principles would make it more
difficult for companies to hide financial problems. This would improve the overall quality
of financial reporting.
 Greater efficiency: A single set of accounting standards would make it easier for
international businesses to operate. This could boost economic growth.
Arguments against standardization:

 Loss of flexibility: Different countries have different needs and priorities. Standardized
accounting principles might not be appropriate for all countries.
 Increased complexity: Developing and implementing a single set of accounting
standards would be a complex and time-consuming process.
 Cost of implementation: Small businesses and developing countries might not be able to
afford to comply with standardized accounting principles.
 Cultural differences: Accounting practices can be influenced by cultural factors.
Standardized accounting principles might not be sensitive to these differences.
3. How could GAAP be made simpler
4. Is it necessary to have two systems for accounting for tax? Why/why not?
Difference between tax accounting and GAAP

Tax accounting GAAP

Location

Primary Focus on transaction which have an All financial transactions must be

difference impact on the tax situation recorded and accounted for
 Objective Levy taxes against net earnings or Provide accounting principles,
taxable income (Taxable income standards and practices, which as
differs from revenue as defined by a result of being standardized,
GAAP) provide financial statements
capable of being compared among
each other.

Depreciation Modified Accelerated Cost Recovery Straight line & reducing balance
System, or MACRS, which uses depreciation
declining percentages defined by the
IRS. In addition, the IRS allows
taxpayers to expense a fixed asset in
the year of the purchase.

Cash, accrual or modified basis Only accrual basis accounting

accounting

Do not need an accrual basis unless Unpaid due expenses accrue on

you report your company tax return the balance sheet. This result in an
as an accrual basis taxpayer expense accrual, which is a
liability to be paid at a later date.

Many small and medium-sized enterprises (SMEs) use the tax accounting system over GAAP.
- Tax accounting is significantly simpler than GAAP, as instead of having to record every
single transaction, only those which impact the tax situation are taken into consideration.
- GAAP is expensive. Many firms use professional accountants to prepare tax returns and
financial statements. When the basis of the taxed differs from the financial statements,
more time is spent on the process, resulting in higher fees.
- Tax accounting (regulations) use everyday language and easily understandable examples
as they are not just meant for experienced accountants but also business owners.

In the present years, there has been raised the debate on the conversion of GAAP (Generally
Accepted Accounting Principles) to IFRS (International Financial Reporting Standards).
Companies are using a system of inconsistent accounting standards for their financial reporting.
Compare and contrast GAAP and IFRS

The GAAP vs. IFRS Debate: A Tale of Two Accounting Worlds

In the ever-evolving landscape of global finance, the debate surrounding the conversion of
Generally Accepted Accounting Principles (GAAP) to International Financial Reporting
Standards (IFRS) has raged on for years. At the heart of the matter lies the question: which
system of accounting standards provides a more accurate and transparent representation of a
company's financial health?
GAAP: The American Standard Bearer
Born in the United States, GAAP has long been the bedrock of financial reporting for companies
listed on American stock exchanges. Developed by the Financial Accounting Standards Board
(FASB), GAAP emphasizes a principles-based approach, focusing on the underlying substance
of transactions rather than rigid rules. This flexibility has been lauded for its adaptability to
complex business models, but also criticized for a lack of specificity, potentially leading to
inconsistencies in application.
IFRS: The Global Challenger
Emerging from a collaborative effort by international accounting standard-setters, IFRS has
rapidly gained traction in recent years. Adopted by over 120 countries, IFRS offers a
standardized set of rules that aim to provide a more comparable view of companies across
different jurisdictions. Proponents of IFRS highlight its focus on transparency and comparability,
arguing that it fosters greater investor confidence in the global marketplace.
Clash of the Titans: Key Differences
While both GAAP and IFRS share the goal of providing useful financial information, key
distinctions exist in their approach:

 Revenue Recognition: GAAP generally follows a realization principle, recognizing

revenue when it is earned. IFRS, on the other hand, allows for earlier recognition under
certain conditions, potentially inflating reported earnings in the short term.
 Leases: GAAP traditionally classifies leases as either operating or capital, with different
accounting implications. IFRS requires most leases to be capitalized on the balance sheet,
potentially impacting reported debt levels.
 Intangibles: GAAP allows for the amortization of goodwill over a period of up to 20
years. IFRS, however, requires goodwill to be tested for impairment annually, potentially
leading to more volatile reported earnings.
Finding the Right Fit: The Conversion Conundrum
The decision to convert from GAAP to IFRS is a complex one, with no easy answers. Proponents
of conversion argue that IFRS would:

 Enhance comparability: By providing a standardized set of rules, IFRS would make it

easier to compare companies across borders, potentially attracting more foreign
investment.
 Reduce costs: Companies with international operations would face reduced compliance
burdens under IFRS, potentially freeing up resources for other areas.
 Increase transparency: IFRS's focus on fair presentation and disclosure could lead to a
more transparent and informative view of a company's financial health.
However, opponents of conversion raise concerns about:

 Implementation costs: The transition to IFRS can be expensive and time-consuming,

requiring significant changes to accounting systems and processes.
 Loss of flexibility: IFRS's rules-based approach may not be as adaptable to complex
business models as GAAP's principles-based approach.
 Potential for earnings manipulation: The flexibility inherent in IFRS could be exploited
by companies to manipulate reported earnings.
The Road Ahead: A Convergence in Sight?
The debate over GAAP versus IFRS is likely to continue for the foreseeable future. However,
there are signs of convergence on the horizon. The FASB and the International Accounting
Standards Board (IASB) have been working together to narrow the differences between the two
sets of standards. In 2012, they issued a joint convergence roadmap, outlining areas where they
will focus their efforts in the coming years.
Ultimately, the goal is to create a single set of high-quality global accounting standards that can
be used by companies around the world. Whether this goal will be achieved remains to be seen,
but the ongoing dialogue between the FASB and the IASB is a positive step in the right direction.
In conclusion, the GAAP vs. IFRS debate highlights the challenges of creating a single set of
accounting standards that can be applied effectively in a globalized world. While both systems
have their own merits and drawbacks, the ongoing efforts to converge GAAP and IFRS offer
hope for a future where financial reporting is more transparent, comparable, and informative for
all stakeholders.

Unit 6: FINANCIAL STATEMENT

1. What are the advantages and disadvantages of computerized accounting programs over
traditional manual accounting?
Advantage:
With the development of computerized accounting programs such as SAGE, the double-entry
system has been automated and the user needs only enter the transaction once and the second
side will be automatically posted into the correct account. These systems make the process of
report generation much faster as all of the data is stored and can be extracted in a variety of
methods, by various criteria thus reports for any given period can be generated almost instantly.
Disadvantage:
Difficulty in cross-checking journal entries for irregularities as the data is presented as a list of
transactions rather than being clearly visible as a set of T-accounts.
2. Why do you think companies are changing to a paperless office?
Accounting especially for larger corporations generates a lot of paperwork. The actual accounts
are only a small portion of the accounting records. To start with each transaction has to be
meticulously recorded which before computerized programs meant a large number of ledgers.
All in all, a lot of paperwork was generated by the act of accounting which was not a problem
unitl it came time to find a certain piece of information from a previous year. Then, accoutants
were completely reliant on the filing clerks who knew the system.
- Enhanced Efficiency and Productivity
- Reduced Costs and Paper Waste
- Increased Accuracy and Security
3. Do you think it is important to keep a hard copy of financial records even if you are
using a computerized system? Why/why not
Disadvantage:
Difficulty in cross-checking journal entries for irregularities as the data is presented as a list of
transactions rather than being clearly visible as a set of T-accounts. As such many experienced
accountants still use hard copies for ledger control.
4. What are the different types of financial statements?
Balance Sheet:
- This document provides a snapshot of the company's financial position at a specific point
in time, typically the end of an accounting period.
- It shows the company's assets (things it owns), liabilities (money it owes), and
shareholder equity (owner's investment).
- The basic equation of the balance sheet is: Assets = Liabilities + Equity.
Income Statement:

- This statement summarizes the company's revenues and expenses over a specific period,
usually a quarter or a year.
- It shows how much money the company has earned from its operations, how much it has
spent on expenses, and its net income (profit or loss).
- Key components of the income statement include:
o Revenue: Income earned from selling goods or services.
o Cost of Goods Sold (COGS): Direct costs associated with producing the goods or
services.
o Operating Expenses: Indirect expenses incurred to run the business, such as rent,
salaries, and marketing.
o Net Income: Profit or loss remaining after all expenses have been deducted from
revenue.
Cash Flow Statement:
- This statement summarizes the company's cash inflows and outflows over a specific
period.
- It shows how much cash the company has generated from its operating, investing, and
financing activities.
- The cash flow statement helps stakeholders understand the company's ability to generate
cash and meet its financial obligations.
In your experience, what do people think of the work done by accountants? What do they
generally think about financial statements? How can accountants make the numbers they
produce easier to understand?
Perceptions of accountants:
Positive:

 Reliable and trustworthy: Accountants are often seen as individuals who handle
finances with accuracy and integrity, making them valuable assets to businesses and
individuals.
 Good at handling finances: Their expertise in financial matters inspires confidence in
their ability to manage budgets, track expenses, and ensure financial compliance.
 Essential for businesses: From startups to large corporations, businesses rely on
accountants for bookkeeping, tax preparation, and financial analysis, making them crucial
for smooth operations.
Negative:

 Seen as boring or nerdy: The stereotype of accountants being obsessed with numbers
and paperwork can portray them as lacking excitement or creativity.
 Jargon-heavy and difficult to understand: Financial terminology can be complex and
opaque to those without accounting knowledge, creating a communication barrier.
 Not always seen as creative or innovative: Accounting is often perceived as a rule-
based field, potentially downplaying the problem-solving and analytical skills involved.
Perceptions of financial statements:
Positive:

 Provide important information about a company's health: Financial statements offer

valuable insights into a company's financial performance, stability, and future prospects.
 Used by investors to make informed decisions: Investors heavily rely on financial
statements to evaluate potential investments and assess risks before making investment
decisions.
 Required by law for transparency: Publicly traded companies are obligated to publish
financial statements, ensuring transparency and accountability to stakeholders.
Negative:

 Can be complex and difficult to interpret: Financial statements can be overwhelming

for non-professionals, filled with technical jargon and intricate formatting.
 Open to manipulation and fraud: While accounting standards aim for accuracy, there
can be potential for creative accounting practices or outright fraud, leading to
misrepresented financial information.
  May not tell the whole story: Financial statements are a snapshot in time and may not
capture all aspects of a company's health, like employee morale or brand reputation.
How accountants can make numbers easier to understand:

 Use plain language and avoid jargon: Translating complex financial terms into simpler
language can make information more accessible to a wider audience.
 Provide clear explanations and context: Supplementing numbers with explanations and
context can help users understand the underlying meaning and significance of the data.
 Use visuals and charts: Representing data through charts, graphs, and infographics can
make complex information more visually appealing and easier to grasp.
 Engage in storytelling: Framing financial information through stories or relatable
scenarios can make it more engaging and memorable for non-financial audiences.
 Offer educational resources and workshops: Providing resources like explainer videos,
blog posts, or even financial literacy workshops can empower individuals to better
understand financial statements and make informed decisions.
By making conscious efforts to communicate effectively and simplify complex financial
information, accountants can bridge the gap between the world of numbers and the general
public, fostering trust and understanding.

Unit 7: THE ACCOUNTING EQUATION

1. What are the functions of an accounting department? Would you like to work there?
- Tracking transactions: Recording every financial move, from sales to bills.
- Keeping accounts tidy: Ensuring timely payments and smooth cash flow.
- Reporting the results: Creating financial statements that paint a clear picture of the
organization's health.
- Planning for the future: Budgeting for expenses and anticipating income.
- Keeping things legal: Complying with tax regulations and safeguarding against fraud.
- Providing financial wisdom: Acting as advisors, offering insights and promoting financial
literacy.
2. Is it difficult to prepare a balance sheet? Why
Difficulty of preparing a balance sheet depends on several factors:
- Complexity of the business: Simple businesses require less effort, while intricate ones
involve more data and calculations.
- Experience and tools: Experienced accountants with software handle it smoothly, while
beginners might find it challenging.
- Availability of information: Accuracy and ease depend on organized financial records
and clear accounting practices.
Overall, it's not inherently difficult for experienced professionals with proper tools and
information. For beginners or complex businesses, it can be challenging but manageable with
guidance and learning.
3. Why might intangible assets be hard to quantify?
*Intangible assets: An asset which does not have a physical nature
Intangible assets can be hard to quantify as we often unable to compare them with the market.
4. Why is the accounting equation so important?
*The accounting equation is how double-entry bookkeeping is established. The equation
represents the relationship between the assets, liabilities, and owner’s equity of a small business.
It is necessary to understand the equation to learn how to read a balance sheet.
The accounting equation shows what the firm owns (its assets) are purchased by either what it
owes (its liabilities) or by what its owners invest (its shareholder equity or capital). The
relationship is expressed in the form of an equation.

(tra mạng)
- Balance check: It ensures everything balances, like a double-entry bookkeeping system
where every debit has a matching credit. This verifies the accuracy of transactions and
prevents errors.
- Financial snapshot: It gives a quick picture of the company's financial health. Assets
show what it owns, liabilities what it owes, and equity what's left for owners.
- Decision-making tool: By understanding the relationships between assets, liabilities, and
equity, stakeholders can make informed decisions about investments, loans, and business
strategies.
- Transparency and trust: It promotes transparency in financial reporting, building trust
with investors, creditors, and other stakeholders.
5. What are the typical assets and liabilities connected to a SME?
Assets:
Current assets:
- Cash and equivalents: Petty cash, bank accounts, short-term investments.
- Accounts receivable: Money owed by customers for goods or services sold on credit.
- Inventory: Raw materials, work-in-progress, finished goods held for sale.
- Prepaid expenses: Insurance premiums, rent, or utilities paid in advance.
Non-current assets:
- Property, plant, and equipment (PP&E): Buildings, machinery, vehicles, furniture,
computers, etc.
- Intangible assets: Intellectual property (patents, trademarks, copyrights), goodwill, brand
reputation, customer relationships.
Liabilities:
Current liabilities:
- Accounts payable: Money owed to suppliers for goods or services purchased on credit.
- Short-term loans: Bank overdrafts, lines of credit, payable within a year.
 - Accrued expenses: Expenses incurred but not yet paid, such as salaries or utilities.
Non-current liabilities:
- Long-term loans: Mortgages, bank loans, equipment loans, payable over multiple years.
- Deferred tax liabilities: Taxes payable in future years based on current accounting
practices.

Study the balance sheet sample of any Vietnamese company and translate the main items of it.
Annual Report of Vinamilk 2022
Assets:
Total Assets: VND 49,652,828 million (approximately USD 2.13 billion)

 Current Assets: VND 15,301,684 million (31% of total assets)

o Cash and cash equivalents: VND 4,583,209 million
o Trade receivables: VND 3,605,501 million
o Inventories: VND 3,748,574 million
 Non-Current Assets: VND 34,351,144 million (69% of total assets)
o Property, plant, and equipment: VND 15,790,730 million
o Intangible assets: VND 5,645,172 million
o Long-term investments: VND 7,759,891 million

Liabilities:

Total Liabilities: VND 16,262,813 million (33% of total liabilities and equity)

 Current Liabilities: VND 15,301,684 million (94% of total liabilities)

o Borrowings: VND 4,867,130 million
o Trade payables: VND 9,674,710 million
o Tax payable: VND 418,101 million
 Non-Current Liabilities: VND 961,129 million (6% of total liabilities)
o Borrowings: VND 66,029 million
o Lease liabilities: VND 460,632 million

Equity:
Total Equity: VND 33,390,015 million (67% of total liabilities and equity)

 Share capital: VND 20,899,554 million

 Retained earnings: VND 3,883,739 million
 Unit 8: DEPRECIATION AND AMORTIZATION
1. Why do you think depreciation and amortization are so important in accounting?
Both depreciation and amortization are key aspects of accrual accounting and need to be
mastered by anyone wanting to make a career in accountancy. The aim of both depreciation and
amortization is to allocate the cost of an asset over the life of the asset. To be this they need to
carry over an expense account containing each year’s depreciation figure.
Depreciation deals with tangible assets nd amortization deals with intangible assets.
2. Are there any assets that you think should not be depreciated? Why
- Land: Land generally appreciates in value over time, unlike most physical assets that
deteriorate. Depreciating land would not accurately reflect its potential for increasing
value.
- Natural resources: Similar to land, natural resources like oil, minerals, and timber often
hold a fixed or even increasing value over time. Depreciating them wouldn't accurately
represent their potential future value or extraction costs.
- Works of art and collectibles: Art and collectibles can also gain value over time,
potentially appreciating significantly. Depreciating them wouldn't capture their potential
for future price increases.
- Goodwill: Goodwill, which represents the intangible value of a company's reputation or
brand, can fluctuate but doesn't typically deteriorate in the same way as tangible assets.
Depreciating it could be misleading and create unnecessary volatility in financial
statements.
- Investments held for long-term appreciation: Investments like stocks or bonds
intended for long-term capital gains are not depreciated. Their value fluctuates in the
market, but depreciation wouldn't accurately reflect their potential for future growth
3. Which types of assets are best depreciated using:
a) The straight line method
Straight line depreciation, in which the company calculates the salvage value of the asset and
then depreciates a set percentage over the useful life of that asset until the net book value
reaches the salvage value.
Assets that are best depreciated using the straight-line method share several key characteristics:
- Predictable and even wear and tear: The asset should lose its value predictably and
evenly over its useful life. This means the physical deterioration or obsolescence happens
at a consistent rate throughout its usage.
- Relatively simple value: The asset should have a clear initial cost and a readily
determinable salvage value (the estimated value at the end of its useful life). Complex
valuation methods are not necessary for straight-line depreciation.
- Long lifespan: The straight-line method works well for assets with long lifespans, as the
depreciation expense is spread evenly over many years. For shorter-lived assets, other
methods might be more appropriate.
Examples of assets well-suited for straight-line depreciation:
 - Buildings: Their value typically declines gradually due to wear and tear and potential
obsolescence.
- Furniture and equipment: While they might eventually need replacement, they often
deteriorate at a consistent rate.
- Vehicles: They lose value with mileage and age, and their depreciation can be easily
calculated based on expected lifespan.
- Software licenses: If they have defined lifespans before becoming obsolete, straight-line
depreciation can be suitable.
b) The sum-of-years-digits method
The sum-of-years-digits depreciation method is based on time passing but it is considerably
more complicated than the straight line method. It is used because it results in accelerated
depreciation of an asset. When using this method, the first hing to do is to determine the year’s
digits figures. For example, on an asset with a useful life of five years these would be: 5, 4, 3, 2,
1. Then calculate the sum of the figures, in this case 15. To get the depreciation rate we then
divide the years digits figures by the sum of figures, so in the first year the depreciation rate
would be 5/15, in the second year 4/15 etc. The result of this is that the asset depreciates quicker
at the start of its useful life than at the end.
Assets with rapid initial decline in value: This method is ideal for assets that experience
significant wear and tear or face rapid technological obsolescence in the early years of their use.
Examples include:
- Computers and technology: Their value often plummets quickly due to rapid
advancements in technology.
- Certain machinery and equipment: They might undergo heavy usage initially, leading
to faster deterioration.
- Delivery vehicles: They rack up mileage and wear and tear early in their service life.
c) The annuity method
Annuity depreciation is a method which is not based on time, but rather on cost. When the asset
is purchased its useful life is established and from this the ‘number of uses’ estimated. This could
be miles traveled in the case of a vehicle or cycle turns in the case of a production machine. This
figure is then divided by the difference between the cost and the salvage value of that asset,
which gives a unit cost. Each year, the depreciation is calculated on the actual usage of that
asset by multiplying the unit cost.

The Units of Production Depreciation method is most suitable for assets whose wear and tear or
obsolescence is directly related to their level of production or usage. This method ties the
depreciation expense to the actual output or usage of the asset, making it an appropriate choice
for assets where the correlation between usage and depreciation is significant. Here are types of
assets that are best depreciated using the Units of Production method:
Manufacturing Equipment:
Machinery used in manufacturing processes, such as production lines, presses, and industrial
equipment, may experience wear and tear directly proportional to the number of units produced.
Units of Production Depreciation allows for a more accurate matching of depreciation with the
level of production.
Fleet Vehicles:
Vehicles used for delivery services, transportation, or any other operations where mileage or
hours of operation correlate with wear and tear are suitable for Units of Production Depreciation.
This is especially relevant for businesses with a fleet of vehicles where some may be used more
intensively than others.
4. (Bonus) Problem with depreciation and amortization:
The total cost the asset is paid full in the first year but is accounted for over the useful life of the
asset. Therefore the company’s actual current cash flow situation can be misrepresented in the
accounts during this time.
5. (Bonus) How can intangible assets be amortized?
- Assets with infinite life cannot be amortized
- Assets with finite life: using straight line method until net book value reaches zero at the
end of its useful life.

Describe the depreciation method companies can use on their assets and the reasons for
choosing that method.
Companies have several depreciation methods to choose from when allocating the cost of assets
over their useful lives. The selection of a particular depreciation method depends on factors such
as the nature of the asset, its usage pattern, and financial reporting requirements. Here are some
common depreciation methods used by companies:
Straight-Line Depreciation:
Method: Under the straight-line method, an equal amount of depreciation is charged each year
over the asset's useful life.
Reasons for Choosing:
- Simplicity: Straight-line depreciation is straightforward and easy to calculate.
- Uniform Expense: It provides a consistent and predictable expense, making it suitable for
assets that offer a relatively constant benefit over time.
Units of Production Depreciation:
Method: Depreciation is based on the actual usage or production of the asset. The cost per unit of
production is multiplied by the actual units produced or hours used.
Reasons for Choosing:
- Variable Usage: Ideal for assets whose usage varies significantly over time.
- Accurate Matching: Aligns depreciation with the actual level of asset utilization.
Sum-of-the-Years-Digits Method:
Method: The sum-of-the-years-digits method involves a formula that considers the sum of the
digits of the asset's useful life. The depreciation expense is then calculated based on the
remaining digits each year.
Reasons for Choosing:
- Accelerated Depreciation: It accelerates depreciation relative to the straight-line method.
- Balances Acceleration: Provides a balance between straight-line and double-declining
balance methods.

Unit 9: MANAGEMENT ACCOUNTING

1. How can management accountants help a business?
Management accountant helps shape company policy and the direction that the company will
take in the future.
Managerial accounting focused on increasing knowledge inside a company and as a result
reducing risks connected with the decision making. Accountants can draft reports of … and
managers may then utilise these reports to measure the difference between the expected and
actual results, or to compare performance to other benchmarks.
- Controlling: The majority of managerial accounting functions produce information
which is used to make decisions about the future and to evaluate the effectiveness of past
decisions. Monitoring financial results and measuring the outcome is called “controlling”.
- Budgeting: Management planning. The controller supervises the creation of budgets.
Budgets are often prepared for individual teams and departments within a company as
well as for the company as one entity.
- Forecasting: Management accountants can create special reports which are used to help
make decisions about proposed projects or possible takeovers. Reports are created to
analyse cost and benefit relationships connected to different variables. These reports
usually include the collection of outside data as well as forecasting.
2. Do you agree that management accounting is more valuable to a company than financial
accounting? Why/why not
Whether management accounting is more valuable than financial accounting depends on your
perspective and the specific needs of the company. Both disciplines play crucial roles, but in
different ways:
Financial Accounting:
- External Focus: Provides standardized financial reports to stakeholders like investors,
creditors, and regulators.
 - Compliance & Accountability: Ensures adherence to accounting standards and
regulations, fostering trust and transparency.
- Historical Performance: Tracks past financial results, offering a benchmark for evaluating
progress and identifying trends.
Management Accounting:
- Internal Focus: Generates reports and analyses for internal decision-making by managers
and executives.
- Planning & Control: Supports budgeting, forecasting, cost analysis, and performance
evaluation to optimize operations.
- Future Performance: Focuses on predicting future outcomes and informing strategic
decisions for growth and profitability.
3. “Accounting records the past while management accounting predicts the future” Do you
agree? Why/why not
I mostly agree with the statement "Accounting records the past while management accounting
predicts the future," but it's important to add some nuance to this simplistic view. Here's why:
Accounting:
- Does indeed record the past: It tracks financial transactions and events chronologically,
providing a historical record of a company's financial performance.
- But it's not merely passive record-keeping: Accountants analyze past data to identify
trends, assess financial health, and calculate key metrics like profitability and solvency.
This analysis can inform future decisions to some extent.
- Financial statements, the outputs of accounting, are used for both historical analysis
and future projections: By understanding past performance, investors and managers can
make informed predictions about future growth and risk.
Management accounting:
- Primarily focuses on the future: It leverages historical data from accounting and other
sources to forecast future trends, predict financial outcomes, and inform strategic
decisions.
- But it doesn't operate in a vacuum: The quality of its predictions depends heavily on
the accuracy and completeness of the historical data provided by accounting.
- Management accounting techniques don't guarantee perfect foresight: The future is
inherently uncertain, and even the most sophisticated models can be disrupted by
unforeseen events.
Overall:
- Accounting provides the foundation: It establishes the historical context and data that
management accounting uses to make predictions.
- Management accounting builds upon this foundation: It analyzes data, identifies
patterns, and uses modeling techniques to predict future outcomes and guide decision-
making.
With the rise of artificial intelligence, a wide variety of professions are be at risk of becoming
obsolete. So just what is the future of accounting?
The rise of artificial intelligence (AI) is a double-edged sword for accounting. While it threatens
the routine tasks of data entry and bookkeeping, it also unlocks a future filled with exciting
possibilities. The question isn't "will accountants become obsolete?" but "how will the role of
accountants evolve to thrive alongside AI?"
Redefining the Role: AI will automate many of the mundane tasks currently performed by
accountants, freeing them to focus on more strategic and analytical aspects. Tax filing, auditing,
and financial reporting will be streamlined and optimized by AI algorithms, leaving human
accountants to interpret data, offer insights, and make informed decisions.
Data-Driven Decision Making: As AI crunches vast amounts of financial data, accountants will
become expert interpreters, uncovering hidden patterns and trends. They will translate complex
data into actionable insights, guiding businesses towards better financial decisions. Imagine
optimizing pricing strategies based on real-time market analysis or predicting future cash flow
with AI-powered models.
Advisory Services Take Center Stage: With routine tasks handled by AI, accountants can shift
their focus towards providing valuable advisory services. They will become trusted advisors,
helping businesses navigate the complexities of tax laws, regulations, and financial planning.
Imagine crafting customized investment strategies, negotiating complex contracts, or ensuring
compliance with ever-changing regulations.
Building the Human Advantage: The skills that will set future-proof accountants apart are far
from the traditional number-crunching. Critical thinking, problem-solving, communication, and
collaboration will be key. Accountants will need to understand the nuances of business
operations, be able to translate data into actionable stories, and build strong relationships with
clients.
The Future is Collaborative: The future of accounting is not a battle between humans and
machines, but a seamless partnership. AI will handle the heavy lifting, while human accountants
will provide the strategic vision and human touch. This collaboration will lead to a more
efficient, insightful, and value-driven accounting profession, ensuring businesses make informed
decisions and thrive in the ever-changing economic landscape.
The future of accounting is bright, but it requires embracing change and upskilling. Accountants
who see AI not as a threat but as a powerful tool will be the ones who shape the future of this
dynamic and evolving profession.
 Unit 10: COST ACCOUNTING
1. Cost accounting definition
Cost accounting is a method of evaluating the overall costs, both actual and notional, which are
attributable to conducting business. This could be per unit cost on goods produced or per hour
cost for services provided. Generally, based on standard accounting practices, it is one of the
tools that managers use to determine what type of and how much expense is involved in
maintaining the current business model.
2. How can cost accounting help business
- Provide up-to-date data when measuring how intelligently company resources are being
used. By identifying production costs and then defining the cost of production for
successive business cycle, it is possible to note any underlying trends that indicate a rise
in production costs without any appreciable changes or increase in the production of
goods and services. This approach makes it possible to identify the reason for the
change and take steps to contain the situation and limit the costs incurred before profits
are impacted to a greater degree.
- For product development & marketing strategies: ascertain if a new product can be
produced at a reasonable price, considering the cost of raw materials and the labour and
equipment necessary to produce a finished product and as such establish a breakeven
point. Maketing protocols can make use to project if the product will sell enough units to
make production a viable option.
- Show which option would be the most profitable by comparing the expected incomes
when comparing several options for development
- If a company is planning on expanding into a new market, cost accounting tools can
analyze the relative historic profitability of each market in order to find the best option
3. Differences between cost and financial accounting
The way that cost are classified: Financial accounting classifies based on the transaction, cost
accounting can classify in many different ways which gives the possibility of analyzing the effect
on the cost on each step of the process.

Comment the following quotations:

a) Poverty is the parent of revolution and crime
The stark assertion that "poverty is the parent of revolution and crime" demands not just
attention, but nuanced critique. While it undeniably holds water in highlighting the link between
material hardship and social unrest, it risks oversimplification and overlooks crucial contributing
factors.
Poverty can indeed be a potent incubator for both revolution and crime. When basic needs go
unmet, and economic inequality casts long shadows, desperation breeds. The hunger for food
spills over into a hunger for justice, a yearning for a system that provides not just bread, but
dignity. It's no surprise that revolutions, from the French to the Arab Spring, have often
blossomed in fertile ground of social and economic exclusion.
Similarly, poverty can push individuals towards criminality. Lack of legitimate opportunities,
coupled with the ever-present specter of hunger and homelessness, can make crime appear to be
the only path to survival. The allure of quick gains, however ill-gotten, becomes difficult to resist
when the alternative stares back as an empty plate or a cold corner.
However, equating poverty solely with revolution and crime paints a reductive picture. It
diminishes the resilience and resourcefulness of those trapped in its clutches. Countless
individuals rise above their circumstances, building lives of integrity and accomplishment
despite the odds. Moreover, attributing social unrest solely to material deprivation ignores the
role of political factors like oppressive regimes, systemic discrimination, and lack of social
mobility.
Therefore, while poverty plays a significant role in shaping the contours of societal discontent, it
alone cannot be crowned the singular parent of revolution and crime. Examining the complex
interplay of economic hardship, political structures, and individual agency is crucial in
understanding the roots of social upheaval. Only then can we move beyond simplistic
pronouncements and formulate solutions that address the multifaceted causes of human suffering
and societal unrest.
In conclusion, while "poverty is the parent of revolution and crime" offers a stark reminder of the
consequences of unchecked economic inequality, it is only one piece of a complex puzzle.
Understanding the true genesis of both social unrest and individual choices requires a nuanced
appreciation of the factors that shape human behavior and the systems that either nurture or
suffocate hope.
b) A fool and his money are soon parted
The adage "A fool and his money are soon parted" encapsulates a universal truth about the perils
of imprudent financial behavior. In an era characterized by rapid consumerism and easy access to
credit, the importance of financial wisdom cannot be overstated. This proverb serves as a
poignant reminder that individuals who neglect to exercise prudence in their financial dealings
are susceptible to the swift erosion of their wealth.
In the contemporary context, where the allure of instant gratification and impulsive spending is
pervasive, the consequences of financial recklessness are evident. Individuals who succumb to
the temptations of frivolous expenditures or speculative investments often find themselves facing
dire economic consequences. Credit card debt, high-interest loans, and failed ventures are
common pitfalls for those who disregard the principles of sound financial management.
Furthermore, the adage highlights the significance of financial education. A fool, in this context,
is not a reflection of intelligence but rather of a lack of financial literacy. Governments and
educational institutions must recognize the imperative of equipping individuals with the
knowledge and skills necessary to make informed financial decisions. An educated populace is
better equipped to navigate the complexities of budgeting, saving, and investing, thus reducing
the likelihood of financial downfall.
In conclusion, "A fool and his money are soon parted" serves as a timeless admonition against
hasty financial decisions. Embracing prudence in financial matters is not merely a matter of
personal responsibility; it is a societal imperative. By fostering financial literacy and encouraging
prudent financial habits, we can empower individuals to build a secure and prosperous future,
safeguarding against the all too real risk of being parted from their hard-earned money.

Unit 11: INTERNATIONAL ACCOUNTING

You work for an accountancy firm and one of your clients is a small airline. This airline is
considering purchasing a new aircraft within the next twelve months to expand its operations.
The airline has asked your firm for advice concerning this purchase and you have considered the
airlines financial position. Write a report for the airline. Your report should:
- explain which internal financial indicators most accurately show the financial position of
this airline
- summarize the airlines current financial position
- outline what risks there would be in expansion
- advise the airline on what steps to take next
Write your answer in 200 to 250 words in an appropriate style on the following pages.

Report on the Financial Feasibility of Aircraft Purchase for [Airline Name]

Executive Summary:
This report provides a comprehensive analysis of your airline's current financial position and
offers guidance on the potential purchase of a new aircraft for operational expansion. The
internal financial indicators that most accurately reflect the airline's financial health include
liquidity ratios, leverage ratios, and profitability metrics.
Current Financial Position:
As of the latest financial statements, your airline exhibits robust liquidity with a favorable
current ratio and quick ratio, ensuring short-term obligations can be met efficiently. However, a
thorough analysis of leverage ratios, such as debt-to-equity, is essential to gauge the airline's
capacity to take on additional debt for the aircraft acquisition. Profitability indicators, like net
profit margin and return on investment, provide insights into the company's ability to generate
earnings and maximize shareholder value.
Expansion Risks:

 Market Uncertainty: Fluctuations in fuel prices, economic downturns, and geopolitical

instability can significantly impact air travel demand and revenue.
 Competition: Increased competition from established or new airlines can squeeze market
share and profitability.
  Debt Burden: Taking on additional debt to finance the aircraft purchase could strain the
airline's financial health and increase its vulnerability to economic downturns.
 Operational Challenges: Integrating a new aircraft into existing operations requires
careful planning and execution to avoid disruptions and cost overruns.
Recommended Steps:

 Financial Due Diligence: Conduct a detailed financial due diligence to assess the
potential impact of the aircraft purchase on liquidity, leverage, and profitability.
 Risk Mitigation Strategy: Develop a robust risk management strategy that includes fuel
price hedging, compliance with aviation regulations, and scenario planning for economic
uncertainties.
 Financial Modeling: Create detailed financial models to project the return on
investment, factoring in operational costs, revenue projections, and financing terms for
the new aircraft.
 Stakeholder Communication: Clearly communicate the expansion plan to stakeholders,
including investors and lenders, highlighting the anticipated benefits and risk mitigation
measures.
In conclusion, while expansion offers growth opportunities, a meticulous financial analysis and
risk management strategy are crucial for informed decision-making. We recommend proceeding
with a thorough evaluation of the proposed aircraft purchase, ensuring alignment with your
strategic objectives and financial capacity.

Unit 12: TAXES (Part 1)

1. Types of taxes
- Consumption tax:
o Sales tax is levied against consumer, which means that company has no liability
other than the act of collecting the tax which is calculated on the sale price of a
product. This tax is held by the company until a determined time when it is paid
to the appropriate governmental department.
o VAT is levied on both the consumer and the producer. VAT 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
- Captital gains tax: a tax on the sale of non-inventory that has increased in value since its
purchase. The differenc in value is then treated as a taxable source of income and thus has
tax levied against it.
- Corporation tax: taxation method for taxing the income of a business entity
- Income tax: tax levied on individual wages and salaries
- Capital transfer tax (death duty/inheritance/estate tax): is imposed on inherited money
or property
- National insurance: Companies and employees also have to pay taxed which the
government uses to finance social security spending – unemployment pay, sick pay,..
 - Excise taxes/duties: additional sales tax on commodities like tobacco products,
alcoholuc drinks and petrol
- Tariffs: charged on goods imported from abroad
- Property tax: a tax based on the value of an asset. The focus of property tax is on private
assets in public views, such as your home or car.

The new head of your financial department wants to know about the taxation system in your
country. He also heard that the taxation system is closely connected with the financial
reporting requirements. Write a report to him explaining the major points and referring to the
relevant laws. Write 150-200 words.
To: New Head of Financial Department
From: [Your Name]
Date: December 20, 2023
Subject: Overview of Vietnamese Taxation System and Financial Reporting
As requested, I have prepared this report outlining the key aspects of the Vietnamese taxation
system and its connection to financial reporting requirements.
Major Taxes and Rates:

 Corporate Income Tax (CIT): 20% standard rate, with preferential rates for specific
sectors (e.g., 10% for socialized projects). (Law on Corporate Income Tax 2014)
 Personal Income Tax (PIT): Progressive rates from 5% to 35%, depending on income
level. Non-residents face a flat 20% rate on employment income. (Law on Personal
Income Tax 2019)
 Value-Added Tax (VAT): Generally 10%, with reduced rates of 5% and 0% for specific
goods and services. (Law on Value-Added Tax 2017)
Financial Reporting Requirements:

 Taxable income must be calculated in accordance with accounting standards issued by the
Ministry of Finance, which closely align with International Financial Reporting
Standards (IFRS). (Law on Accounting 2015)
 Companies must submit financial statements audited by independent auditors within nine
months of the fiscal year end. (Law on Auditing 2017)
 Tax authorities utilize financial reports to verify tax returns and may request additional
information or documents for accurate tax assessment.
 Unit 13: TAXES (part Two)
1. What is the difference between retail and wholesale
- Retail: Sells goods directly to individual consumers in smaller quantities at higher per-
unit prices, often with a focus on presentation and customer experience.
- Wholesale: Sells goods in larger quantities to businesses, retailers, or distributors at lower
per-unit prices, with a focus on bulk transactions and efficiency.
2. The vocabulary term “per annum” is borrowed from another language and not really an
English term. What is the story behind this?
3. Can you think of any tax breaks that the government in your country has introduced
recently?
Corporate Income Tax (CIT) Incentives:
- Preferential tax rates: Reduced tax rates of 10%, 15%, or 17% apply to specific industries
and projects, lasting for 10-15 years or even the project's entire lifetime.
- Tax holidays: Complete exemption from CIT for 4-6 years, followed by 50% reduction
for several subsequent years, is available for qualified projects.
- Special investment incentives: Decision 29/2021 outlines special incentives for R&D and
large-scale projects. The most attractive package includes a 5% CIT rate for 37 years, 6
years of tax exemption, and a 50% CIT reduction for 13 years.
Value-Added Tax (VAT) Incentives:
- Zero VAT rate: Applies to certain exports, basic necessities like food and medicine, and
educational services.
- Reduced VAT rate: 5% rate applies to specific goods and services like agricultural
products, fertilizers, and tourism services.
- VAT refunds: Exporters and businesses investing in priority sectors can claim VAT
refunds for imported goods and services.
4. Where can a potential investor go for advice
5. What tax advice would you give to an individual who comes to live and work in your
country?
- Determine your tax residency status: After 183 days in Vietnam or 12 consecutive
months, you'll be considered a tax resident and subject to tax on your worldwide income.
Plan your finances accordingly.
- Research tax treaties: Check if your home country has a tax treaty with Vietnam to avoid
double taxation.
- Consult a tax advisor: Seek professional advice on your specific situation and potential
tax liabilities, especially if you have complex income sources.
- Register for a tax code: Upon arrival, obtain a tax code from the local tax office. You'll
need this for official transactions and tax filing.

Write a short report (10-12 sentences). Find information about taxation in Vietnam. Compare
taxation of your country with taxation in the USA and the UK. Do these systems have much in
common? Is there any differences?
Taxation systems play a pivotal role in shaping the economic landscapes of countries worldwide.
This report provides a concise comparison of the taxation systems in Vietnam, the USA, and the
UK, highlighting both commonalities and differences.
Taxation in Vietnam:
Vietnam operates under a progressive income tax system, with individual tax rates ranging from
5% to 35%. Corporate income tax is generally set at a flat rate of 20%, although certain sectors
may enjoy preferential rates. Value-added tax (VAT) is a key component, set at 10%, with
reduced rates for essential goods. Vietnam also imposes special consumption tax on items such
as alcohol and tobacco.
Taxation in the USA:
The United States employs a progressive income tax system with rates ranging from 10% to
37%. Corporate income tax rates vary from 15% to 21%. Additionally, the U.S. has a complex
system of state and local taxes. Sales tax rates differ by state, and some states levy personal
income tax.
Taxation in the UK:
The United Kingdom utilizes a progressive income tax system with rates ranging from 20% to
45%. Corporate tax is set at a standard rate of 19%, but certain small businesses may benefit
from reduced rates. VAT is a significant component, set at 20%, with reduced rates for specific
goods and services.
Commonalities and Differences:
- Commonalities: All three countries rely on income tax, corporate tax, and value-added
tax as primary revenue sources. They also incorporate progressive tax structures, meaning
higher earners pay a higher percentage of their income in taxes.
- Differences: Tax rates, especially in terms of income tax and corporate tax, vary
significantly among the three countries. Additionally, the specific regulations, deductions,
and exemptions differ, influencing the effective tax burden on individuals and businesses.
While Vietnam, the USA, and the UK share common elements in their taxation systems,
including reliance on income and corporate taxes, there are notable differences in tax rates and
structures. Understanding these distinctions is crucial for businesses and individuals navigating
the complexities of taxation in each respective country.

Unit 14: AUDITING

1. Deffinition of audit
Audit, whether internal or external, carefully study the accountants’ work and identify any errors
or abnormalities.
(Chapter 2) 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.
2. Role of internal audit
In large firms, audits are often used as a control for the work of the accounting department.
These internal audits can take two forms: being carried out by the CFO and his/her team or by
a specially commissioned external firm of auditors.
In either of these forms, the auditors are responsible for confirming the validity of the records
produced by the accounting department. This can be done by cross-checking the accounts
workings with the source information or statistical samplying.
3. Function of audit
The primary function of audit is to demonstrate that the company is following all expected
standards whether they be accounting or production. Each department can be audited to confirm
that they adhere to set procedures and to ascertain that each process is as described.

What reponsibilities do auditors have in their relationship with their clients? How is this
regulated in your country or in a country you know? Is the regulation strong enough?
Auditors have a range of responsibilities in their relationship with clients, and these
responsibilities are crucial for maintaining the integrity and reliability of financial reporting. The
responsibilities of auditors can be broadly categorized into several key areas:
Independence and Objectivity:
- Responsibility: Auditors must maintain independence from the client to ensure an
unbiased and impartial assessment of the financial statements. This includes avoiding
conflicts of interest and not being unduly influenced by client management.
- Actions: Auditors are expected to assess and disclose any financial or personal
relationships that could compromise their independence. They should remain objective
and impartial throughout the audit process.
Professional Competence and Due Care:
- Responsibility: Auditors are required to possess the necessary knowledge, skills, and
expertise to perform the audit effectively. Due care involves conducting the audit with
diligence, thoroughness, and professional skepticism.
- Actions: Auditors continually update their knowledge, maintain relevant professional
certifications, and apply professional judgment to ensure the quality and accuracy of their
work.
Confidentiality:
- Responsibility: Auditors must maintain the confidentiality of client information obtained
during the audit. This includes financial data, internal processes, and any sensitive
information related to the client's operations.
- Actions: Auditors are bound by professional standards and legal obligations to keep client
information confidential. They should not disclose any information without the client's
consent, unless required by law.
Communication with Management and Governance:
- Responsibility: Auditors have a responsibility to communicate effectively with the client's
management and, where applicable, with governance bodies. Clear communication
ensures a mutual understanding of audit expectations and findings.
- Actions: Auditors discuss audit planning, scope, and results with management. They also
communicate any significant issues or findings to the audit committee or board of
directors.
Compliance with Ethical Standards:

- Responsibility: Auditors must adhere to ethical principles, including integrity, objectivity,

professional behavior, and professional skepticism. Ethical conduct is fundamental to
maintaining public trust in the auditing profession.
- Actions: Auditors follow ethical guidelines set by professional bodies, such as the
International Ethics Standards Board for Accountants (IESBA) or the relevant national
accounting and auditing standards.
Compliance with Auditing Standards:
- Responsibility: Auditors are required to conduct audits in accordance with applicable
auditing standards. These standards provide a framework for the audit process and help
ensure consistency and quality in audit engagements.
- Actions: Auditors follow established auditing standards, such as the International
Standards on Auditing (ISA) or Generally Accepted Auditing Standards (GAAS), to
guide their audit procedures and reporting.
Risk Assessment and Fraud Detection:
- Responsibility: Auditors are responsible for assessing and addressing the risks of material
misstatement in financial statements, including the risk of fraud.
- Actions: Auditors conduct risk assessments, design audit procedures to address identified
risks, and remain vigilant for signs of fraud throughout the audit process.
Documentation:
- Responsibility: Auditors are required to maintain adequate documentation of their audit
work. This documentation supports the conclusions reached during the audit and provides
evidence of compliance with auditing standards.
- Actions: Auditors document their understanding of the client's internal controls, the
nature and extent of audit procedures performed, and the results of those procedures.
These responsibilities collectively contribute to the auditor's role in providing an independent
and reliable opinion on the fairness of the client's financial statements. Adherence to these
responsibilities is essential for promoting transparency, accountability, and trust in financial
reporting.
 Unit 15: THE FUTURE OF ACCOUNTING
Write an essay of 300 words on the opportunities and the challenges facing those working in
the field of Accounting and Auditing.
The world of accounting and auditing, once the stoic domain of meticulous spreadsheets and
ledger books, is undergoing a seismic shift. Fueled by technological advancements and a
globalized economic landscape, the profession now presents a fascinating dichotomy: a field rife
with exciting opportunities while simultaneously grappled by demanding challenges.
Embracing technology is perhaps the most significant opportunity on the horizon. Automation
and artificial intelligence are rapidly taking over mundane tasks, freeing accountants to delve
deeper into the strategic realm. Imagine crunching numbers not just for compliance, but to
predict market trends, optimize resource allocation, and generate game-changing insights. Data
analytics empowers accountants to transform from number-crunchers to strategic partners,
driving business growth and innovation.
Beyond the digital frontier, globalization opens doors to a broader world. Companies expanding
across borders seek accountants who navigate diverse regulatory environments and understand
regional nuances. Expertise in international financial reporting standards and the ability to
translate financial metrics across cultures become valuable assets, paving the way for rewarding
international careers.
However, these opportunities are not unaccompanied by hurdles. The constant evolution of
technology demands a commitment to lifelong learning. Mastering data visualization,
programming, and other tech skills are no longer fringe pursuits, but prerequisites for staying
relevant. Accountants must remain agile and adaptable, embracing upskilling as a critical
element of professional advancement.
Regulation presents another formidable challenge. Tax codes, accounting standards, and
international reporting requirements mutate with alarming speed. Scrupulous attention to detail
and the ability to interpret labyrinthine documentation become essential. Navigating this
complex regulatory landscape while ensuring compliance can be a daunting task, demanding
constant vigilance and unwavering commitment.
In conclusion, the accounting and auditing landscape is experiencing a renaissance.
Opportunities abound for those who embrace technology, navigate globalization, and maintain
ethical vigilance. However, the path forward is paved with the hurdles of continuous learning,
regulatory complexity, and upholding ethical standards. The future of the profession hangs in the
balance, waiting for those who can master the balancing act between embracing the new and
holding fast to the core values of integrity and accuracy.