Exercise 8. Study Figures 1, 2 and discuss.

1. The difference between definitions of reserves “booked” (Fig.1)

2. Classification of petroleum fiscal systems (Fig.2)

Definitions of reserves “Booked” Royalty/tax Production sharing Gross recoverable reserves Gross recoverable reserves x Working interest (%) x Working interest (%) = Working-interest reserves = Working-interest reserves - Royalty - Royalty = Net-revenue-interest bbl - Government profit oil = Contractor entitlement*   *The contractor share of profit oil is usually taxed.   Fig.1    

Words and expressions

dramatically	эффектно, поразительно
fiscal systems	налоговая система
recoverable reserves	извлекаемые запасы
net-revenue-interest	доля чистого дохода компании от общего дохода по проекту
working-interest	процент участия
take title to	брать право собственности на товар
wellhead	устье скважины
to pay in cash	платить наличными
to pay in kind	платить товаром
fee	плата

Exercise 9. Discuss the following points.

1. Have you ever heard or read that a particular company has problems with revenue authorities? What company was it? What was the problem?

2. Do all businesses in Russia pay taxes in full? Why do you think some of them try to avoid taxes? What should the authorities do with such companies? Do you know what the auditors deal with?

Auditors and their reports

Auditors are usually independent certified accountants who review the financial records of a company. These reviews are called audits. They are usually performed at fixed intervals - quarterly, semiannually or annually. Auditors are employed either regularly or on a part-time basis. Some large companies maintain a continuous internalaudit by their own accounting departments. These auditors are called internal auditors.

Not so many years ago the presence of an auditor suggested that a company was having finacial difficulties or that irregularities had been discovered in the records.

Currently, however, outside audits are a normal and regular part of business practice. Auditor's see that current transactions are recordered promptly and completely. Their duty is to reduce the possibility of misappropriation, to identify mistakes or detect fraudulent transactions. Then they are usually requested to propose solutions for these problems.

Thus auditors review financial records and report to the management on the current state of the company's fiscal affairs in the form of Auditor's Report or Auditor's Opinion.

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