Part 1 Financial Accounting

Unit 1 Accounting and Accounting Information

If a man empties his purse into his head, no one can take it from him.

——Benjamin Franklin

如果一个人为求知而倾其所有，那么其财富是任何人也拿不走的。

——本杰明·富兰克林

Learning Objectives

After studying this unit, you should be able to:

1. Begin to familiarize yourself with the concept of financial accounting and technical terms of accounting in English.

2. Identify the two major groups of information users.

3. Explain the quality characteristics of accounting information.

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1.1 Introduction to Accounting

Accounting is an information system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities that can be expressed in monetary terms. Identifying business activities requires selecting transactions and events relevant to an organization. Recording business activities requires keeping a chronological log of transactions and events measured in monetary unit and classified and summarized in a useful format. Communicating business activities requires preparing accounting reports such as financial statements. It also requires analyzing and interpreting such reports. Careful analysis of these reports and trends may suggest the ways in which the business may grow in the future. Expansion or reorganization should not be planned without the proper analysis of the accounting information; a new product and the campaign to advertise and sell them should not be launched without the help of accounting expertise. Accounting information affects many aspects of our lives. When we earn money, pay taxes, invest savings, budget earnings, and plan for the future, we are influenced by accounting.

Note 1-1　transactions and events

交易与事项。交易是指企业与外部主体之间的价值交换行为，如购买商品、销售商品等；事项是指企业内部有关部门之间发生的价值转移行为，如生产部门领用原材料等。

1.2 Information Users

Accounting is often called the language of business because all organizations set up an accounting information system to communicate data to help people make better decisions. Financial accounting is the area of accounting aimed at serving external users by providing them with financial statements. These statements are known as general-purpose financial statements. The term general-purpose refers to the broad range of purposes for which external users rely on these statements.

External users of accounting information are not directly involved in running the organization. Almost all of us are users of accounting information. They include shareholders (investors), lenders, non-executive directors, customers, suppliers, regulators, lawyers, brokers, and the press. Each external user has special information needs depending on the types of decisions to be made. External users have limited access to an organization's information. Yet their business decisions depend on information that is reliable, relevant, and comparable.

Accounting information is also useful to internal users. Company managers are the primary internal users of accounting information. Managers need an information system that will identify problems, such as possible cost overruns or a department's inability to implement a plan properly. The selection and implementation of solutions can occur only after problems have been identified. Accounting information is used to pinpoint problems and to help select appropriate solutions. Managers also use accounting information as they make business decisions.

Note 1-2　general-purpose financial statements

通用目的财务报表也称一般目的财务报表，即按照一般目的报告标准编制的财务报表。所谓一般目的报告标准是指为满足各类财务信息使用者的共同需要而制定的标准，也是符合会计准则和相关法律法规要求。

1.3 Quality Characteristics of Accounting Information

Quality characteristics are qualitative criteria which are used to evaluate the possible measurement options and choose the most appropriate accounting policies for the given situation. The most widely recognized quality criteria include relevance, reliability, understandability, and comparability.

Relevance. Theoretically, relevance is the most important qualitative characteristic. If accounting information is to be of any use, it must be relevant for its intended use. Relevance relates to the objectives of financial reporting. The concept refers to the capacity of accounting information to make a difference to the external decision-makers who use financial reports.

Qualities relate to relevance include predict value, feedback value and timeliness.

Predict value. Accounting information should be helpful to external decision-makers by increasing their ability to make predictions about the outcome of future events. Decision-makers working from accounting information that has little or no predictive value are merely speculating intuitively.

Feedback value. Accounting information should be helpful to external decision-makers who are confirming past predictions or making updates, adjustments, or corrections to predictions.

Timeliness. Accounting information should be reported soon enough for it to be useful for decision-making. Like the news of the world, stale financial information has less impact than fresh information. Lack of timeliness reduces relevance.

Reliability. A commonly stated criterion for accounting measurements is that of reliability. Information is reliable if users can depend on it as a sufficiently accurate measure of what it is intended to measure. Reliability is closely related to the general concept of usefulness, but has additional sub-components. To ensure reliability, accounting information must be free from error and bias and faithfully represent what it claims to represent. It must not mislead or deceive. There are three components to reliability:

Truthfulness. This attribute is also sometimes called validity. Information must give a faithful picture of the facts and circumstances involved, as a city map should accurately represent the layout of the city that it represents.

In accounting, the balance sheet is considered to be a “statement of financial position”, but it represents the financial position of the organization faithfully only if it really does portray all of the assets and liabilities of the business. If our accounting assumptions and measurement models do not show all of the assets or liabilities, then the balance sheet does not represent faithfully the financial position of the business.

Verifiability. If knowledgeable and independent observers can apply an accounting measurement and obtain essentially the same result, the measurement is said to be verifiable. This is considered a component of reliability. Verifiability of a measurement does not, however, mean that the measurement was necessarily objective or non-arbitrary, but only that its computation can be reproduced or replicated.

Neutrality. The term neutrality indicates the characteristic of freedom from bias. Accounting information is biased if the measurements result in consistent overstatements or understatements of the items being measured. Preparers of financial reports should not attempt to induce a predetermined outcome or a particular mode of behaviour. However, the concept of neutrality is sometimes taken to mean that reported accounting information should be neutral in its impact and should not influence economic decisions. If accounting information has no impact on economic decisions, then it is essentially useless.

Understandability. Information must be understandable to be useful to users in their decision-making process. Understandability does not mean that all information has to be reduced to the lowest common level or simplified so that the least sophisticated users should understand it. The assumption is that investors and creditors have a reasonable understanding of business and economic activities, as well as some understanding of accounting. These users are expected to study the information with reasonable diligence. The user groups have been defined to include those who provide advice to investors and creditors; users who lack expertise are assumed to be properly advised.

Comparability. Comparability is a characteristic of the relationship between two pieces of information rather than of a particular piece of information by itself. There are two aspects of comparability—consistency, which entails using the same accounting policies from year to year within a firm, and uniformity, which means that companies with similar transactions and similar circumstances use the same accounting treatments.

Consistency. Consistency involves applying accounting concepts and principles from period to period in the same manner. There is a presumption that an accounting principle once used should not be changed. The purpose of this concept is to allow meaningful inter-period comparisons of results of an entity. Without consistency in accounting procedures, management could manipulate a firm's reported results merely by changes in accounting procedures. Under these circumstances inter-period comparisons would have to be treated with skepticism. However, if consistency is carried too far, it adversely affects relevance. The consistency convention does not mean that accounting methods cannot be changed. A change to a preferred accounting principle is permitted, even though this would impair consistency. A change should be made where a new procedure would result in financial statements with improved ‘truth and fairness’. If a justifiable change is made, the fact and the effect of the change should be disclosed. The convention only requires that capricious changes in procedure which cannot be justified by reference to a ‘true and fair’ view should not be made.

Uniformity. Uniformity requires that companies in the same industry use the same accounting policies and procedures. This results in comparable information that is helpful in contrasting organizations. The purpose of financial accounting is to communicate information, and information is useful only if it can be used to make decisions. Accounting is often a matter of making choices among possible accounting policies and accounting estimates. Every financial reporting choice that an accountant makes has the potential power to influence someone's or some group's behaviour. There is increased demand by external users for comparability in accounting reports. Therefore accountants must follow accounting standards in preparing financial statements. Accounting standards aim to create more harmony among accounting practices of different businesses. These standards represent the consensus at a particular time on how accounting information should be recorded, what information should be disclosed, how it should be disclosed, and which financial statements should be prepared.

Note 1-3　relevance

相关性是衡量会计信息质量的一项重要标准。相关性是指会计信息与使用者的决策需求相关。为了使信息具有相关性，信息的提供必须是及时的（timeliness）、必须具有预测价值（predictive value）、反馈价值（feedback value）。

Note 1-4　reliability

可靠性是一项重要的信息质量特征。可靠性指会计信息的可信赖程度。可靠的会计信息必须真实反映企业的经济活动（truthfullness）；具有相同专业资格的不同人员处理同一经济业务应能得到相同的结果，即信息是可验证的（verifiability）；提供信息者必须保持中立的立场，客观地反映经济活动，即中立性（neutrality）。

Note 1-5　understandability

可理解性，明晰性。它是会计信息的一项质量标准，指会计所使用的概念和名词以及财务报表的列报必须让报表读者容易理解。当然，报表读者本身必须具备一定的会计知识以便透彻地理解财务报表。

Note 1-6　comparability

可比性。它是会计信息的一项质量要求，指不同企业提供的财务报表、企业在不同期间提供的会计报表具有可比性，这就要求不同企业在处理同类经济业务时要遵循相同的会计准则，即具有统一性（uniformity）。一个企业所选用的会计政策和程序应在各会计期间连续使用，即保持一贯性（consistency），除非有合理的原因支持变更。

Note 1-7　truth and fairness

真实性和公允性。它是英国用词。在英国的审计报告中，注册会计师要就财务报表是否真实公允地反映了企业一定时间的财务状况和相关期间的经营成果及现金流量表达审计意见。在美国则使用“公允反映”的表达方式，即“present fairly”。

Words and Expressions

1. accounting n. 会计（核算），会计学

2. identify v. 识别，确认

3. record v. 记载，记录，登记

4. communicate v. 传达，交流

5. transaction n. 交易，经济业务

6. chronological a. 按时间顺序的

7. log n. 日志

8. classify v. 分类

9. summarize v. 概括，总结，汇总

10. format n. 格式，形式

11. interpret v. 说明，解释

12. reorganization n. 重组

13. campaign n. 活动，运动

14. launch n. 发动，开办，投入

15. expertise n. 专门技术或知识

16. supplier n. 供给者，补充者，供应商

17. regulator n. 管理者，监管者

18. have access to 可以接触到……，可以获得……

19. overrun n. 超支，滥用

20. implement v. 履行，实行，提供工具

21. pinpoint v. 确定位置，准确描述，指出，确认

22. criteria（复数） n. 标准，准则，规则。单数形式为criterion

23. speculate v. 思索，推测，沉思

24. intuitively ad. 凭直觉地，直观地

25. stale a. 不新鲜的，旧的

26. attribute n. 品性，性质，特质，属性

27. validity n. 确实性，合法性

28. layout n. 布局，设计，版面安排

29. portray v. 描绘，描述，表现

30. replicate v. 重复

31. induce v. 说服，招致，促使，引起

32. diligence n. 勤勉，勤奋

33. entail v. 需要，使负担

34. skepticism n. 怀疑态度

35. impair v. 损害，伤害，削弱

36. capricious a. 反复无常的，任性的

37. consensus n. 一致，全体意见

Key Terms

reorganization（重组，改组）　relevance（相关性）　reliability（可靠性）　understandability（可理解性，明晰性）　comparability（可比性）　truth and fairness（真实性和公允性）

Review and Discussion Questions

1. What kind of information can be defined as relevant information?

2. Explain the qualities of reliable information. What are the three components of reliability?

3. Explain understandability.

4. Specify the two aspects of comparability. Describe how consistency and uniformity promote comparability.

5. Give an example of trade-off between qualitative characteristics.

Exercises

Ⅰ. Fill in the blanks with the words and phrases given below, and change the form when necessary.

The predictive and (1) _________ roles of information are interrelated. For example, information about the current level and structure of asset holdings has value to users when they endeavour to predict the ability of the entity to take (2) _________ of opportunities and its ability to react to (3) _________situations. The same information plays a confirmatory (4) _____ in respect of past predictions about, for example, the (5) _______ in which the entity would be structured or the outcome of planned operations.

Information may be (6) _________ but so unreliable in nature or representation that its (7) _________ may be potentially misleading. For example, if the validity and amount of a claim for damages under a legal (8) ________ are disputed, it may be inappropriate for the (9) ________ to recognize the full amount of the claim in the balance sheet, although it may be appropriate to(10) _________the amount and circumstances of the claim.

Ⅱ. Phrase and accounting term translation from Chinese into English.

1. 经济活动

2. 交易与事项

3. 财务报表

4. 一般目的财务报表

5. 会计信息质量特征

6. 外部决策者

7. 预测价值

8. 反馈价值

9. 会计信息的可验证性

10. 真实性和公允性

Ⅲ. Oral English practice.

You are going through an interview process for a position of assistant accountant in a manufacturing company. You are required to explain your understanding of accounting to the company officer.

参考译文

第1单元 会计与会计信息

1.1 会计概述

会计是一个信息系统，它通过对一个组织的可以货币计量的经济活动进行确认、记录和反映，为使用者提供相关、可靠和可比的信息。对经济活动的确认要求选择与该经济组织相关的交易与事项。对经济活动的记录是将这些交易和事项按照发生的时间顺序，用统一的货币单位和对使用者有帮助的形式进行分类和汇总。对经济活动信息的反映包括编制不同形式的会计报告，如财务报表等，并对这些报告进行分析和说明。对会计报告和数据走势进行详尽的分析可有助于预测企业未来的发展趋势。在没有对企业的会计信息进行认真的分析之前不宜进行企业扩张或重组规划工作，新产品的开发和促销活动都应在咨询了会计专业人士之后方可进行。会计信息与我们的生活息息相关。在我们获取劳动报酬、缴纳税金、将储蓄用于投资、进行收入预算，以及对未来进行规划时，都会受到会计信息的影响。

1.2 信息使用者

任何单位都有自己的会计信息系统，用以传递数据并帮助信息使用者更好地做出相关的经济决策，因而，会计也常被称为“商业语言”。财务会计是会计中的一个门类，用于向组织外部的信息使用者提供财务报表，这种财务报表被称为“通用目的的财务报表”，其中“通用”一词指外部使用者可以为达到不同的目的而使用相同的财务报表。

会计信息的外部使用者并不直接参与组织的经营和管理活动。我们可以这样说，几乎每一个人都是会计信息的使用者。外部信息使用者包括股东（投资人）、债权人、非执行董事、客户、供应商、监管机构、律师、经纪人和新闻媒体等。由于外部信息使用者需要做出的决策类型不同，因而都有特定的信息需求。虽然外部信息使用者只能获得关于一个企业有限的信息，但他们所做的经济决策都需要以可靠、相关且具有可比性的信息为依据。

会计信息对内部使用者也是非常重要的。公司的经理人员是会计信息的主要内部使用者。管理人员需要依靠一个信息系统来发现经营中出现的问题，如可能发生的成本超支或是某个部门无法很好地实现某一项计划等，只有明确了问题所在，才能选择并实施解决的方案。会计信息不但可帮助查明问题，而且有助于选择适当的解决方案。管理人员在做经营决策时也需要利用会计信息。

1.3 会计信息的质量特征

所谓会计信息的质量特征是指用于对可选择的计量属性进行衡量的质量性的标准，以便针对特定的情况选择最适当的会计政策。已被广泛认可的质量标准包括相关性、可靠性、可理解性和可比性。

相关性。从理论上来看，相关性是信息质量特征中最为重要的一个内容。会计信息要想成为有用的信息，就必须与其应用的目的相关。信息的相关性与财务报告的目的有关，体现的是会计信息影响外部使用者依据这些信息所做的经济决策的能力。

与相关性有关联的几个特征包括预测价值、反馈价值和及时性。

预测价值。会计信息应该有助于外部使用者更好地对企业未来经营活动的结果进行预测。若会计信息没有预测价值，则使用者在做经济决策时只能靠直觉来猜测。

反馈价值。会计信息应有助于外部使用者对以往所做的预测进行确认、更新、调整或更正。

及时性。会计信息只有及时地提供给使用者才有助于决策的制定，如同国际新闻一样，陈旧的财务信息比起最新的信息来，对决策的影响力将大大减小，缺乏及时性会削弱信息的相关性。

可靠性。衡量会计计量的一个常用的标准是看信息是否具有可靠性。如果使用者可以将信息作为实际情况的准确反映并将其作为决策的依据，则可认为信息具有可靠性。会计信息的可靠性与一般意义上的信息有用性概念密切相关，但还包含其他组成部分。要保证会计信息具有可靠性，就必须确保信息的准确性、无偏见性，并能够客观反映实际情况。可靠的会计信息不应对使用者有误导甚至欺骗的作用。可靠性有三个组成部分：

真实性。这个特征有时候也被称为有效性。就好比一个城市的地图应该呈现这个城市真实的布局一样，会计信息对它要反映的客观事实和情况必须给出真实的表达。

在会计中，资产负债表被看作对企业财务状况的描述，但资产负债表只有在列示了企业全部的资产和负债的情况下才能真实地反映企业的财务状况。如果我们采用的会计假设和计量模式不能够全面地反映企业全部的资产和负债，则资产负债表没有真实地反映企业的财务状况。

可验证性。如果由具有会计知识和独立性的外部人员采用相同的会计计量方法可以得出相同结论的话，则企业所选择的会计计量方法具备可验证性，这一特征被认为是可靠性的一个组成要素。但是，信息的可验证性并不意味着这一会计计量一定是客观的或者是不带主观性的，它只是说这一计量结果是可以重复获得或者是可复制的。

中立性。中立性一词表明会计信息具有无偏见的特征。如果会计对某一会计要素的计量结果产生持续性的高估或低估，会计信息就不具有中立性。财务报表的编制者不应试图取得事先确定的结果，或者是产生特定形式的变化。然而，也有人将中立性这一概念理解为会计信息不应对经济决策造成任何影响。但是，如果会计信息对经济决策没有任何影响的话，那它基本上就是无用的了。

可理解性。会计信息只有在能被理解的前提下才能有助于使用者做出正确的决策。信息的可理解性特征不意味着所有的信息都必须简单到极点，以至于不具备任何专业知识的人都可以理解。信息的可理解性是基于投资人和债权人对相关的业务和经济活动有相当程度的了解，且具备一定的会计知识的基础之上的，而且这样的信息使用者还必须认真地对会计信息加以研究才行。信息的使用者也包括那些为投资人和债权人提供建议的人，不具备专业知识的信息使用者则被认为获得了适当的专业指导。

可比性。可比性质量特征是针对两种信息的关系而言的，不适用于考察一种信息本身的质量。可比性包括两个方面，其一，一贯性，指一个企业在不同的会计期间连续使用相同的会计政策；其二，统一性，指在相似的环境下从事相似的交易活动的企业采用相同的会计处理方法。

一贯性。一贯性是指企业在不同的期间以相同的方式运用所选择的会计惯例或原则，即企业一旦选定了一种会计方法，以后就不能随意变更。采用一贯性概念的目的是保证一个企业对不同期间的会计信息可以进行有意义的比较。如果会计程序的使用不坚持一贯性原则，则企业管理者可通过改变会计程序而轻松地操纵企业的会计信息。在这种情况下，在对不同时期的会计信息进行比较时就必须保持怀疑的态度。但是，如果一贯性的概念被过度使用的话，则会对信息的相关性产生不利的影响。一贯性原则并不意味着会计方法永远都不能改变，如果变更后的会计方法更有利，虽然违背了一贯性原则也是被允许的。如果采用新的会计方法可以改进财务报表的“真实公允性”，那么这种变更就应当实施。当企业的会计政策发生了合理的变更时，则企业应披露变更的事实和变更的影响。一贯性原则禁止的是在无益于改善财务报表的“真实公允性”的情况下对会计政策的随意变更。

统一性。统一性的概念要求在同一行业中经营的企业要采用相同的会计政策和方法，这有利于将同一行业不同企业之间的经营结果进行比较。财务会计的目的在于对外提供信息，只有能帮助制定经济决策的信息才能被称之为有用的信息。会计核算往往涉及在可供选择的会计方法和估计中做出选择，会计人员做出的任何一种选择都可能对某些人或组织的决策产生影响。外部信息使用者对具有可比性的会计报告的需求越来越强烈，因此，会计人员在编制财务报表的过程中必须遵守会计准则。制定会计准则的目的是促使不同企业的会计实务更加协调，因为会计准则反映了在一定时期大家对如何记录会计信息、应该披露哪些会计信息、如何披露这些信息以及应该编制哪些财务报表等方面所达成的共识。