I. Read and translate the text.

Of all the business disciplines, probably none has the universal reach of accounting, which is found in nearly every community in the world. Within most businesses, accountants play a role in virtually all

activities.

Accounting is a system that collects and processes (analyzes, measures, and records) financial information about an organization and reports that information to decision makers.

Managers throughout the organization (internal decision makers) and parties outside the firm such as investors, creditors, suppliers, customers, etc. (external decision makers) use reports produced by this system. Internal managers typically require continuous detailed information because they must plan and manage the day-to-day operations of the organization. Developing accounting information for internal decision makers is called managerial or management accounting. Accounting for external decision makers is called financial accounting. That branch of accounting is concerned with the production of information for persons not concerned with the day-to-day running of the business. The products of the financial accounting process are financial statements.

It is the accountant's responsibility to keep records of such financial transactions as taxes paid, income received, and expenses incurred. Even more important is the accountant's analysis of how these transactions affect a particular business. By sorting, analyzing, classifying, and recording thousands of transactions, accountants can determine how well a business is being managed and how financially strong it is.

Bookkeeping, a term that is sometimes confused with accounting, is just one phase of accounting - the recording of accounting transactions. Clearly accounting is much more comprehensive than bookkeeping because accounting involves more than just the recording of information.

Because businesses engage in many thousands of transactions. Accounting systems are mandatory to ensure reliable, consistent, and dependable financial information. An accounting system is an organized means by which accounting information about a company's activities is identified, measured, recorded, and retained so that it can Ik- used in accounting statements and management reports. The system includes accountants, bookkeepers, computers, reports, and all the procedures for keeping track «/"financial transactions. At the head of the accounting system is the controller, the person who manages all of the firm's accounting activities. As the chief accounting officer, the manager is responsible for ensuring that the accounting system provides the reports and statements that are needed for the planning, controlling, and decision-making activities of others in the company.

To meet these needs, accountants must design reports that are reliable, accurate, and complete. The reports must also be timely, understandable, and - most importantly - relevant to the types of decisions that must be made. This broad range of accounting activities requires different types of accounting specialists.

Although public accountants are not the most common type of accountants, they are probably the best known. Certified public accountants (CPAs) derive their name from the fact that they are members of firms that offer their accounting services lo the public. CPAs are licensed at the state level after passing a rigorous examination.

While some CPAs work as individual practitioners, many join with one or more other CPAs in a partnership or professional corporation.

Virtually all CPA firms - whether they boast 10,000 employees and 100 offices or just one person in a tiny office - provide three types of services: audit services, tax services, and management services. The larger CPA firms earn about 60 to 70 percent of their revenue from audit services. Smaller firms typically earn most of their income from tax services and management services.

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