Unit 8 Reading Activity

Listen to the recording as you read the text. Then complete the activities.

Financial Statements

If you walked into any accounts office twenty years ago, you would have seen piles of financial statements and reports in every corner. However, now, there is an increasing trend towards the paperless office.

Accounting teams, much like other office workers, are using electronic copies to replace the traditional hard copies of everything from tax returns to financial statements. But how has this electronic revolution changed the accountant’s working day?

As you can imagine, 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 programmes meant a large number of ledgers. These books were the basis for the accounts so it was essential that they were accurately maintained. Each accounting function would operate a different set of ledgers which would then be reconciled in the process of generating the final accounts.

In each set of accounts, for each company the accounting firm had to prepare the workings, otherwise known as T-accounts, the trial balance summarizing these accounts, the [bank reconciliations] showing the cash in hand, a draft set of accounts and of course the approved set of accounts, with accompanying notes to the accounts and this was just the beginning.

Each company was also expected to keep records of all tax matters, in case of the need to produce them for an audit. This meant hundreds or even thousands of receipts, bills and invoices. All of which were summarized on the tax returns, again more paper.

Additionally if a company made use of management accounting services, the number of reports which were produced increased dramatically. Although these management reports were only internal and as such did not need to be retained by law, it was common practice for companies to store these along with the accounting records for that year thus allowing easy reference.

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