Some of you out there may be wondering why the blog has been a bit quiet recently. Tis the season of holidays and as the resident blogger I am afraid I forgot this minor detail when I volunteered to do it back in the spring. This month I hope to make it up to you. In this blog I am going to focus on parts of the Reading Test. For most candidates, Reading Parts 5 and 6 seem to be the most challenging, so I am going to tackle those first. Let’s take a closer look at how we can prepare our students for these sections.

For Part 5, I find it is useful to start by giving students single sentences rather than paragraphs and asking them to predict what information would come prior to this or follow it. Draw their attention to following linking words and references; as well as checking that the sentences fit grammatically.  You can also find suitable financial texts and cut them into paragraphs for jigsaw reading tasks; at the same time further develop the students’ awareness of a range of linking devices.

Finally, move on to exercises similar to those used in the exam, where students match sentences that have been removed from a text. We also need to remind the students of features of the actual test; in part 5 there are three crucial points to remember.

1 H is always the example.

2 There is one extra sentence that is not used.

3 They should leave themselves more time (than Parts 1-4)  to complete this section.

Below are some exercises which follow my suggested format. I will cover  Part 6 of the Reading test later in the week.

Have a good week

Julie

FOLLOWING CLUES IN A TEXT

1 PREDICTING SKILLS

Look at the three sentences about Arthur Andersen below. Predict what sort of information you would expect to find in the sentences before these.

1  Arthur Andersen began using its accounting services as a springboard to sign up clients for Andersen Consulting’s more lucrative business.

2 As a result, in 2001, Andersen Consulting was forced to change its name to Accenture.

3  Since the Securities and Exchange Commission does not allow convicted felons to audit public companies, the firm agreed to surrender its licenses and its right to practice.

2 PREDICTING SKILLS

Now predict what sort of information you would expect to follow the se three sentences about the Worldcom scandal.

1 In 2002, Cynthia  Cooper blew the whistle on the largest corporate fraud in history.

2 In 2004 WorldCom’s CEO pleaded not guilty to charges of fraud and conspiracy in connection with the fraud.

3 After leaving WorldCom, Cooper formed Cynthia Cooper Consulting and started speaking to corporations, associations, and universities about ethics and leadership.

3 MATCHING PAIRS OF SENTENCES

Now match sentences A – C to those in Exercise 1 and D – F to Exercise 2.

A In 2002, Andersen was convicted of witness tampering for shredding documents related to its audit of Enron.

B In 1989, Arthur Andersen and Andersen Consulting became separate units of Andersen Worldwide.

C In 2000 an international arbitrator granted Andersen Consulting its independence.

D In early 2005, he was found guilty by a federal jury of fraud, conspiracy, and filing false documents with regulators.

E Nowadays, she continues to provide advice on corporate ethics, to corporations and business schools throughout North America.

F Cooper discovered that the company had been inflating its profits by classifying operating costs as capital expenditures.

4 INTERPRETATION OF INTERNATIONAL ACCOUNTING STANDARDS

Complete the text below using sentences A – H. Use the words in bold to help you.

(1)……………………………………………….. It is quite another thing to have to interpret it and apply the guidance in the standard to the billions of actual transactions that occur in the business world. This is especially true if the standard provides “broad general principles” to be followed without further implementation guidance. (2)………………………………………………………………………………………………

The FASB does not approve the guidance adopted by the EITFand the EITF is not required to adopt the most transparent accounting from among the alternatives considered. However, the FASB may take formal action and reverse a consensus of the EITF but has only done so once.

(3)……………………………………………. Periodically, when the staff has considered it appropriate, the Chief Accountant has objected to a proposed or final consensus of the EITF being applicable to public companies. The SEC and its staff also exercise their statutory authority when necessary and interpret GAAP. (4) ……………………………

(5)……………………………………………………. The SEC has the statutory authority and mandate to ensure investors are adequately protected through the disclosures and financials information they receive. The International Accounting Standards Survey 2000 written by David Cairns, the former Secretary General of the IASC, cites numerous examples of companies who disclose they are using IAS but who are not in compliance with the standards. (6)……………………………………………………………….

A The SEC and banking regulators will also be interpreting international accounting standards.

B In the United States, the FASB and its Emerging Issues Task Force (EITF) interprets U.S. GAAP.

C It is one thing to write an accounting standard.

D The SEC Chief Accountant is an observer to the EITF and has the right of the floor.

E Accordingly, it is expected the SEC staff will review the financial statements filed with it in order to make sure that the accounting standards used have been properly applied.

F Accordingly, companies who follow IFRS’s standards, as well as their auditors and regulators, will have to interpret them.

G This makes enforcement of principle based standards much more difficult for an auditor.

H Often registrants may request the staff’s interpretation of an accounting standard, especially if they are trying to expedite a filing.

ANSWERS:

EX 2 – 1 B, 2 C, 3 A  EX 3 – 1 F, 2 D, 3 E

EX 4 – 1 C, 2 F, 3 D, 4 H, 5 A, 6 E – G is not used