paid for in advance should be classified as current assets
a) insurance
b) plant and equipment
c) property
5. Non-current … include debts of a business that fall due more than one year ahead, beyond the normal operating cycle, or are to be paid out of non-current assets.
a) assets
b) accounts
c) liabilities
Exercise 10.4
Read the last two paragraphs of the text again and fill in the gaps. Then read and translate:
| proprietorship; assets; section;resources; paid-in capital; debts; credit; liabilities; pensions; mortgages; |
Liabilitiesare made up of …1…, payable long-term notes, bonds payable, employee …2…, long-term and current obligations. They are also split into current and non-current (long-term) liabilities. Current …3… usually consist of overdrafts, taxes due, but not yet paid, and goods supplied on …4…. Non-current or long-term liabilities comprise …5… of a business that fall due more than one year ahead, beyond the normal operating cycle, or are to be paid out of non-current …6….
Owner's equitycan be defined as the …7…invested by the business. To put it differently, «owner's equity = assets – liabilities». It should be noted that the owner's equity …8… of the balance sheet will be different depending on whether the business is a sole …9… , a partnership, or a corporation. The owner's equity section of a corporation is called stockholders' equity and has two parts: contributed or …10… and earned capital or retained earnings.
Exercise 10.5
Read the whole text again and choose the best answer:
1. What is balance sheet?
a) It’s a document which shows a company’s assets and the sources of their financing.
b) It’s a document which shows the company's financial position for the last four years.
2. What belongs to current assets?
а) equipment.
b) cash.
3. Which assets fall into non-current assets category?
а) which are expected to remain in the balance sheet for less than one year.
b) which are expected to be in the balance sheet for more than one year '.
4. What do current liabilities usually consist of?
а) debts of a business that fall due more than one year ahead, beyond the normal operating cycle, or are to be paid out of non-current assets.
b) overdrafts, taxes due, but not yet paid, and goods supplied on credit
5. What is the name of owner's equity section of a corporation?
a) stockholders' equity.
b) shareholders’ equiry.
UNIT 4
AUDITING AND AUDITORS
TEXT 1. THE DISTINCTION BETWEEN AUDITING AND ACCOUNTANCY
TEXT 2. SETTING ACCOUNTING AND AUDITING STANDARDS INTERNATIONALLY
TEXT 3. WHAT IS AUDITING
TEXT 4. AUDITING AND AUDITORS
TEXT 5. AUDIT PROCESS
TEXT 6. AUDIT REPORT
TEXT 7. BIG FOUR AUDITORS
TEXT 1
THE DISTINCTION BETWEEN AUDITING
AND ACCOUNTANCY
Exercise 1.1
Study the vocabulary:
| а course | курс | ||
| acute | гострий | ||
| available | наявний | ||
| applicants | претенденти | ||
| CIS countries | країни СНД | ||
| to date from | відноситися до певного часу | ||
| entry | вступ | ||
| ethics | етика | ||
| extramural | заочний | ||
| to exceed | перевищувати | ||
| external | зовнішній | ||
| full-time students | студенти денного відділення | ||
| goods management | товарознавство | ||
| internal | внутрішній | ||
| IT systems | системи інформаційних технологій | ||
| theory | теорія | ||
| valuation techniques | методи оцінки |
Exercise 1.2
Read and translate the text:
Auditing may be defined as the examination and testing of financial statements. In all countries of the world society relies heavily auditors for credible financial reports. In Britain, for example, all public corporations and many companies applying for sizable loans must have their statements audited. The same holds true for Russia as well.
The main objective of auditing is to give the auditor's professional opinion as to whether the company's financial reports correctly present its financial position Auditors are known to check and test all accounting records. In order to do that they must prove cash balances, confirm physical inventories and verify the amounts owed by customers Apart from that auditors must also decide whether the company's records are kept in accordance with accepted accounting practice.
It should be said that an audit can start only once necessary accounting work has been completed. However, in practice, especially 'in the case of small companies, the distinction, between auditing and accounting work is not clearly appreciated. This is determined by the fact, that small companies have very often limited book-keeping capabilities. So, it is always tempting for them to leave things to the auditor to complete. It should be clearly understood that preparation or completion of accounts is the accountant's task and not the auditor's.
Thus, although many accountants readily undertake both accounting and audit work, these tasks are undertaken with different objectives in view. It would, however, be quite wrong to infer from this that accounts preparation work provides no audit assurance. It is now generally accepted that the assurance derived by auditors from preparing accounts contributes greatly to the overall assurance required. And that in its turn allows reduced testing in other areas.
Exercise 1.3
Read the text again and choose the best variant:
1. Auditing is defined as…
a) the examination and testing of financial statements
b) the science about tax revenues
2. The main objective of auditing is…
a) to give partly information about the financial reports of a company
b) to prove cash balances and verify the amounts of the companies
c) to give the auditor’s professional opinion in this sphere
3. Auditors are known …
a) to describe the financial situation of a company or a firm
b) to check and test all accounting records
c) to prove cash balance
4. Preparation or completion of accounts is…
a) the auditor’s task
b) the financier’s task
c) the accountant’s task
5. The assurance is derived by auditors from preparing…
a) balance-sheets
b) financial reports
c) accounts contributes to the overall assurance required
Exercise 1.4
Fill in the gaps from the table. Then read and translate:
| reports auditors reports accordance inventories corporations records testing objective practice |
Auditing may be defined as the examination and …1… of financial statements. In all countries of the world society relies heavily …2…for credible financial …3…. In Britain, for example, all public …4…and many companies applying for sizable loans must have their statements audited. The same holds true for Russia as well.
The main …5…of auditing is to give the auditor's professional opinion as to whether the company's financial …6…correctly present its financial position Auditors are known to check and test all accounting. In order to do that they must prove cash balances, confirm physical …8…and verify the amounts owed by customers Apart from that auditors must also decide whether the company's records are kept in …9… with accepted accounting …10….
Exercise 1.5 Read the whole text again and choose the best answer:
1. How may auditing be defined?
a) as the science about financial reports
b) as the science of examination and testing of financial statements
2. What is always expected from auditors?
a) auditors have to check and test accounting records
b) auditors have only decide whether the company’s records are kept
3. What is the main objective of auditing?
a) to give the auditor’s professional opinion in auditing
b) to prove cash balances and verify the amounts of the companies
4. What must auditors do to check and test records?
a) they must prove cash balances only
b) they must not only prove cash balances but confirm physical inventories and verify the amounts owed by customers
5. Is preparation or completion of accounts the auditor’s task?
a) preparation of accounts is the auditor’s task
b) preparation or completion of accounts is the accountant’s task
TEXT 2
SETTING ACCOUNTING AND AUDITING
STANDARDS INTERNATIONALLY
Exercise 2.1
Study the vocabulary:
| accurate | точний | ||
| analogy | аналогія, схожість | ||
| acceptable | прийнятний | ||
| audit | аудит | ||
| assure | гарантувати | ||
| certified | дипломований | ||
| chartered accountant | незалежний бухгалтер | ||
| comparability | порівнянність | ||
| conformity | узгодженість, адекватність; схожість | ||
| contain | містити | ||
| define | визначати | ||
| evidence | дані, факти, ознаки | ||
| extent | ступінь, міра | ||
| to form an opinion | формувати думку | ||
| GAAP(generally accepted accounting principles) | Загальноприйняті принципи бухгалтерського обліку | ||
| Ingredient | складова, компонент | ||
| Interrelated | взаємопов’язаний | ||
| Inherent | властивий, притаманний | ||
| Message | повідомлення | ||
| to result in | призводити до чого-небудь |
Exercise 2.2
Read the text to find out how accounting and auditing standards are interrelated:
Accounting standards are the rules for preparing financial statements. They are called generally accepted accounting principles and they specify: first, the type of information that financial statements ought to contain; and second, how that information ought to be prepared. Accounting standards define what acceptable and unacceptable financial accounting practices are.
Auditing standards are the rules governing how an audit is performed. An audit of financial statements is the technical process by an independent person (the auditor) gathers evidence to form an opinion about the conformity of financial statements to GAAP. In most countries a particular group of accountants is legally sanctioned to conduct financial statement audits. In the US, for example, it is the certified public accountants (CPA). In the United Kingdom it is the chartered accountants, in the Netherlands, the register accountant etc. Financial statements conforming to GAAP are said to be reliable. To put it differently, they provide reliable information which is an important ingredient in good decision making.
Accounting standards and auditing standards are interrelated. Accounting standards presumably define what useful financial information is. Auditing standards guide an auditor in determining whether it is also reliable. Useful and reliable financial information puts investors, creditors and others in a position to make better decisions.
Accounting has been called the language of business. That analogy is accurate, since accounting is a form of communication. As with all types of communication, though, misunderstandings can arise unless meanings are reasonably clear.
It should be remembered that accounting reflects the environment in which it operates. And since environments differ around the world it follows that accounting will also be different around the world.
Unfortunately, this diversity of accounting practices results in a general lack of comparability in financial reports from one country to the next. As a result, there is a risk of misunderstanding when financial statements are communicated transnationally. Problems may arise for both users and preparers there.
The problem of different auditing standards is more subtle. Fundamentally, an audit assures users that they can trust the information communicated by the financial statements. However, if auditors around the world are not comparably trained or if they do not observe comparable standards, then their work varies in quality. As a result the inherent reliability of financial statements also varies.
The existence of different accounting and auditing standards affects the decisions of resource providers to the extent that they fail to understand or trust the messages communicated by financial statements. A number of international and regional organizations recognize this problem and are trying to harmonize accounting and auditing standards to the greatest extent possible.
Exercise 2.3
Match the English words with their Ukrainian equivalents:
| 1. | Audit | a) | дані, факти, ознаки |
| 2. | Conformity | b) | ступінь, міра |
| 3. | Evidence | c) | Аудит |
| 4. | Extent | d) | складова, компонент |
| 5. | Ingredient | e) | узгодження, схожість |
Exercise 2.4
Match the English words on the right with their definitions on the left:
| 1. | Audit | a) | a fundamental or general truth, law or standard |
| 2. | Message | b) | a comparison made to show a similarity |
| 3. | Extent | c) | data on which to base proof or to establish truth or falsehood |
| 4. | Principle | d) | an inspection, correction and verification of business accounts conducted by an independent qualified accountant |
| 5. | Ingredient | e) | a component of a mixture |
| 6. | Conformity | f) | agreement or similarity, especially in a certain limited number of features or details |
| 7. | Evidence | g) | a person qualified to audit accounts |
| 8. | Comparability | h) | a communication, usually brief, from one person or group to another |
| 9. | Analogy | i) | compliance in actions, behaviour,etc., with certain accepted standards or norms |
| 10. | Auditor | j) | the range over which something extends; scope |
Exercise 2.5
Read the text again and put the jumbled words into a correct order:
1. the rules, financial, statements, Accounting, are, for preparing, standards.
2. standards, the rules, how, governing, is, an audit, performed, Auditing, are.
3. standards, and, are, Accounting, interrelated, standards, auditing.
4. has, been, the language, Accounting, of, business, called.
5. statements, GAAP, Financial, to, conforming, are, to be, said, reliable.
Exercise 2.6
Read the text once again and rearrange the sentences into a chronological order:
a) It should be remembered that accounting reflects the environment in which it operates.
b) An audit of financial statements is the technical process by an independent person (the auditor) gathers evidence to form an opinion about the conformity of financial statements to GAAP.
c) Accounting standards presumably define what useful financial information is.
d) Accounting standards define what acceptable and unacceptable financial accounting practices are.
e) The existence of different accounting and auditing standards affects the decisions of resource providers to the extent that they fail to understand or trust the messages communicated by financial statements.
TEXT 3
WHAT IS AUDITING
Exercise 3.1
Study the vocabulary:
| fairness and truth | законність та чесність | ||
| audit is conducted | аудит здійснюється | ||
| an internal audit | внутрішній аудит | ||
| an independent | незалежний аудит | ||
| illegal activity | незаконна діяльність | ||
| embezzlement | привласнення чужих грошей | ||
| implement measures | приймати міри | ||
| inaccuracy | помилка, огріх | ||
| profitability | прибутковість | ||
| to lessen the risk | зменшувати ризики | ||
| to assess | визначати суму податку | ||
| identify areas | визначає напрямки | ||
| to uncover | розкривати | ||
| to evaluate | оцінювати | ||
| to meet their objectives | досягати своїх цілей |
Exercise 3.2
Read and translate the text:
Auditing is the inspection of the accounting records and procedures of a business or organization, by a trained accountant, mainly for the purpose of forming an opinion on the fairness and truth of the financial statements. Usually an audit is conducted by someone from the company itself, an internal audit or by a third-part auditor - an independent or external audit.
An independent audit examines not just the finances of a business, but every other area as well. This is generally to make sure that the company’s procedures are being followed, and to determine whether illegal activity such as embezzlement took place. A tax audit determines whether the appropriate tax was paid.
The benefits of an audit are numerous. Audits can improve a company’s efficiency and profitability by helping the management better understand their own working and financial systems. The management, as well as shareholders, suppliers and financers, is also assured that the risks in their organization are well-studied, and effective systems are in place to handle them.
Audits can also identify areas in an organization’s financial structure that need improvement, and how to implement the proper changes and adjustments. Having an audit also lessens the risk and therefore the cost of capital.
An audit can uncover inaccuracies and discrepancies within an organization’s records, which may be indications of weak financial organization or even internal fraud, although fraud detection is not the main purpose of an audit.
The benefits of an audit:
· Analyze and understand your company’s financial records.
· Identify key areas for improvement in your company.
· Assess risks, economy, efficiency and quality.
· Evaluate new technology.
· Uncover fraudulent or other illegal activities within your company.
· Reinforce and strengthen internal control.
Auditors have a unique broad perspective of a company which they apply to deliver effective analyses and relevant information. Management can use this information to evaluate the company and implement measures necessary to meet their objectives.
Exercise 3.3
Match the words with the definitions:
| improvement | a | to make or become less | |
| adjustment | b | right or suitable; fitting | |
| illegal | c | an illogical or surprising lack of compatibility or similarity between two or more facts | |
| appropriate | d | a control for regulating | |
| to lessen | e | the act of improving or the state of being improved | |
| to evaluate | f | the members of the executive or administration of an organization or business | |
| the management | g | to judge or assess the worth of; appraise | |
| to reinforce | h | obtained, done by, or involving deception, especially criminal deception | |
| Fraudulent (adj.) | i | to give added strength or support to | |
| discrepancy | j | forbidden by law; unlawful; illicit |
Exercise 3.4
Fill in the gaps. Then read and translate:
| profitability examines well-studied tax shareholders procedures to determine embezzlement benefits improve |
An independent audit …1… not just the finances of a business, but every other area as well. This is generally to make sure that the company’s
…2… are being followed, and …3…whether illegal activity such as …4… took place. A tax audit determines whether the appropriate …5… was paid.
The …6… of an audit are numerous. Audits can …7… a company’s efficiency and …8… by helping the management better understandtheir own working and financial systems. The management, as well as …9… , suppliers and financers, are also assured that the risks in their organization are …10… , and effective systems are in place to handle them.
Exercise 3.5
Read the text again and put the sentences into a chronological order:
1. The management, as well as shareholders, suppliers and financers, are also assured that the risks in their organization are well-studied, and effective systems are in place to handle them
2. An independent audit examines not just the finances of a business, but every other area as well.
3. Auditors have a unique broad perspective of a company which they apply to deliver effective analyses and relevant information.
4. Usually an audit is conducted by someone from the company itself, an internal audit or by a third-part auditor - an independent or external audit.
5. A tax audit determines whether the appropriate tax was paid.
Exercise 3.6
Read and translate:
The benefits of an audit:
Ø Analyze and understand your company’s financial records.
Ø Identify key areas for improvement in your company.
Ø Assess risks, economy, efficiency and quality.
Ø Evaluate new technology.
Ø Uncover fraudulent or other illegal activities within your company.
Ø Reinforce and strengthen internal control.
TEXT 4
AUDITING AND AUDITORS
Exercise 4.1
Study the vocabulary:
| may be defined | може бути визначений | ||
| to rely | покладатися, довіряти | ||
| credible | гідний довір'я | ||
| sizable loans | велика позичка | ||
| professional opinion | висновок фахівця | ||
| the main objective | головна задача | ||
| the distinction | відмінність | ||
| limited capability | обмежені здібності | ||
| auditing | аудит, ревізія | ||
| different objectives | різні завдання | ||
| tempting | спокусливо | ||
| prove cash balances | підверджувати баланс готівки | ||
| financial statements | фінансові звіти | ||
| in accordance with | у відповідності з | ||
| to confirm | підтверджувати |
Exercise 4.2
Read and translate the text:
Auditing may be defined as the examination and testing of financial statements. In all countries of the world society relies heavily auditors for financial reports. In Britain, for example, all public corporations and many companies applying for sizable loans must have their statements audited. The main objective of auditing is to give the auditor's professional opinion as to whether the company's financial reports correctly present its financial position. Auditors are known to check and test all accounting records. In order to do that they must prove cash balances, confirm physical inventories and verify the amounts owed by customers. Apart from that auditors must also decide whether the company's records are kept in accordance with accepted accounting practice.
It should be said that an audit can start only once necessary accounting work has been completed. However, in practice, especially in the case of small companies, the distinction, between auditing and accounting work is not clearly appreciated. This is determined by the fact, that small companies have very often limited book-keeping capabilities. So, it is always tempting for them to leave things to the auditor to complete. It should be clearly understood that preparation or completion of accounts is the accountant's task and not the auditor's.
Thus, although many accountants readily undertake both accounting and audit work, these tasks are undertaken with different objectives in view. It would, however, be quite wrong to infer from this that accounts preparation work provides no audit assurance. It is now generally accepted that the assurance derived by auditors from preparing accounts contributes greatly to the overall assurance required. And that in its turn allows reduced testing in other areas.
Exercise 4.3
Read the text again and choose the best answer to the question:
1. How may auditing be defined?
Auditing may be defined as …
a)the preparation and checking of financial statements.
b) the examination and checking of financial records.
c) the examination and testing of financial statements.
2. What is always expected from auditors?
In all countries of the world society relies heavily auditors for …
a) financial reports.
b) financial data.
c) accounting information.
3. What is the condition for receiving sizable loan?
All public corporations and many companies applying for sizable loans …
a) must have their accountants audited.
b) must have their balance sheets audited.
c) must have their statements audited.
4. What is the main objective of auditing?
The main objective of auditing is to give the auditor's professional opinion …
a) as to whether the company's financial reports correctly present its financial position.
b) about future business plans.
c) as to whether the company's annual balance correctly present its current financial position.
5. What must auditors do to check and test accounting records?
In order to do that they must …
a) prepare cash flow forecast, confirm physical inventories and verify the amounts owed by accountants.
b) accept cash balances, confirm physical inventories and verify the amounts owed by accountants.
c) prove cash balances, confirm physical inventories and verify the amounts owed by customers.
6. Is preparation and completion of accounts an auditing task?
It should be clearly understood that preparation or completion of accounts …
a) is the accountant's task and not the auditor's.
b) both the accountant's task and the auditor's.
c) nether the accountant's task nor the auditor's.
Exercise 4.4
Fill in the gaps. Then read and translate:
| accepted main public financial position confirm test loans society opinion |
Auditing may be defined as the examination and testing of …1… statements. In all countries of the world …2… relies heavily auditors for financial reports. In Britain, for example, all …3…corporations and many companies applying for sizable …4… must have their statements audited. The …5… objective of auditing is to give the auditor's professional …6… as to whether the company's financial reports correctly present its financial …7… . Auditors are known to check and …8… all accounting records. In order to do that they must, prove cash balances, …9… physical inventories and verify the amounts owed by customers. Apart from that auditors must also decide whether the company's records are kept in accordance with …10… accounting practice.
Exercise 4.5
Match the term with the definition:
| a report | a | a statement, assertion, etc., intended to inspire confidence or give encouragement | |
| a loan | b | having a limit; restricted; confined | |
| an opinion | c | to examine, investigate, or make an inquiry into (facts, a product, etc.) for accuracy, quality, or progress, esp rapidly or informally | |
| a record | d | an account prepared for the benefit of others, esp. one that provides information obtained through investigation | |
| to check | e | judgment or belief not founded on certainty or proof | |
| to confirm | f | an account in permanent form, esp. in writing, preserving knowledge or information about facts or events | |
| limited | g | to prove to be true or valid; corroborate; verify | |
| assurance | h | property lent, esp. money lent at interest for a period of time | |
| auditor | i | the quality of being capable; ability | |
| capability | j | a person qualified to audit accounts |
TEXT 5
AUDIT PROCESS
Exercise 5.1
Read and translate the text:
Every successful audit is based on sound planning and an atmosphere of constructive Involvement and communication between the client and the auditor. Although every audit project is unique, the audit process is similar for most engagements and normally consists of four stages: Planning (sometimes called Survey or Preliminary Review), Fieldwork, Audit Report, and Follow-up Review. Client involvement is critical at each stage of the audit process. As in any special project, an audit results in a certain amount of time being diverted from your department's usual routine. One of the key objectives is to minimize this time and avoid disrupting ongoing activities. Following are some sample flowcharts of the process from other organizations that you may find helpful:
Planning
During the planning portion of the audit, the auditor notifies the client of the audit, discusses the scope and objectives of the examination in a formal meeting with organization management, gathers information on important processes, evaluates existing controls, and plans the remaining audit steps.
Announcement Letter
The client is informed of the audit through an announcement or engagement letter from the Internal Audit Director. This letter communicates the scope and objectives of the audit, the auditors assigned to the project and other relevant information.
Initial Meeting
During this opening conference meeting, the client describes the unit or system to be reviewed, the organization, available resources (personnel, facilities, equipment, funds), and other relevant information. The internal auditor meets with the senior officer directly responsible for the unit under review and any staff members s/he wishes to include. It is important that the client identify issues or areas of special concern that should be addressed.
Preliminary Survey
In this phase the auditor gathers relevant information about the unit in order to obtain a general overview of operations. S/He talks with key personnel and reviews reports, files, and other sources of information.
Internal Control Review
The auditor will review the unit's internal control structure, a process which is usually time-consuming. In doing this, the auditor uses a variety of tools and techniques to gather and analyze information about the operation. The review of internal controls helps the auditor determine the areas of highest risk and design tests to be performed in the fieldwork section. Click here for an annual internal control review plan.
Audit Program
Preparation of the audit program concludes the preliminary review phase. This program outlines the fieldwork necessary to achieve the audit objectives.
Fieldwork
The fieldwork concentrates on transaction testing and informal communications. It is during this phase that the auditor determines whether the controls identified during the preliminary review are operating properly and in the manner described by the client. The fieldwork stage concludes with a list of significant findings from which the auditor will prepare a draft of the audit report.
Transaction Testing
After completing the preliminary review, the auditor performs the procedures in the audit program. These procedures usually test the major internal controls and the accuracy and propriety of the transactions. Various techniques including sampling are used during the fieldwork phase.
Advice & Informal Communications
As the fieldwork progresses, the auditor discusses any significant findings with the client. Hopefully, the client can offer insights and work with the auditor to determine the best method of resolving the finding. Usually these communications are oral. However, in more complex situations, memos and/or e-mails are written in order to ensure full understanding by the client and the auditor. Our goal: No surprises.
Audit Summary
Upon completion of the fieldwork, the auditor summarizes the audit findings, conclusions, and recommendations necessary for the audit report discussion draft.
Working Papers
Working papers are a vital tool of the audit profession. They are the support of the audit opinion. They connect the client’s accounting records and financials to the auditor’s opinion. They are comprehensive and serve many functions.
TEXT 6
AUDIT REPORT
Exercise 6.1
Read and translate the text:
Our principal product is the final report in which we express our opinions, present the audit findings, and discuss recommendations for improvements. To facilitate communication and ensure that the recommendations presented in the final report are practical, Internal Audit discusses the rough draft with the client prior to issuing the final report.
Discussion Draft
At the conclusion of fieldwork, the auditor drafts the report. Audit management thoroughly reviews the audit working papers and the discussion draft before it is presented to the client for comment. This discussion draft is prepared for the unit's operating management and is submitted for the client's review before the exit conference.
Exit Conference
When audit management has approved the discussion draft, Internal Audit meets with the unit's management team to discuss the findings, recommendations, and text of the draft. At this meeting, the client comments on the draft and the group works to reach an agreement on the audit findings.
Formal Draft
The auditor then prepares a formal draft, taking into account any revisions resulting from the exit conference and other discussions. When the changes have been reviewed by audit management and the client, the final report is issued.
Final Report
Internal Audit prints and distributes the final report to the unit's operating management, the unit's reporting supervisor, the Vice President for Administration, the University Chief Accountant, and other appropriate members of senior University management. This report is primarily for internal University management use. The approval of the Internal Audit Director is required for release of the report outside of the University.
Client Response
The client has the opportunity to respond to the audit findings prior to issuance of the final report which can be included or attached to our final report. However, if the client decides to respond after we issue the report, the first page of the final report is a letter requesting the client's written response to the report recommendations. In the response, the client should explain how report findings will be resolved and include an implementation timetable. In some cases, managers may choose to respond with a decision not to implement an audit recommendation and to accept the risks associated with an audit finding. The client should copy the response to all recipients of the final report if s/he decides not to have their response included/attached to Internal Audit's final report.
Client Comments
Finally, as part of Internal Audit's self-evaluation program, we ask clients to comment on Internal Audit's performance. This feedback has proven to be very beneficial to us, and we have made changes in our procedures as a result of clients' suggestions.
Audit Follow-Up
Within approximately one year of the final report, Internal Audit will perform a follow-up review to verify the resolution of the report findings.
Follow-up Review
The client response letter is reviewed and the actions taken to resolve the audit report findings may be tested to ensure that the desired results were achieved. All unresolved findings will be discussed in the follow-up report.
Follow-up Report
The review will conclude with a follow-up report which lists the actions taken by the client to resolve the original report findings. Unresolved findings will also appear in the follow-up report and will include a brief description of the finding, the original audit recommendation, the client response, the current condition, and the continued exposure to Indiana University. A discussion draft of each report with unresolved findings is circulated to the client before the report is issued. The follow-up review results will be circulated to the original report recipients and other University officials as deemed appropriate.
Exercise 6.2
Write down 10 clue words and word combinations from the text:
Exercise 6.3
Continue the following sentences:
1. The client has the opportunity to respond to …
2. However, if the client decides to respond after we issue the report…
3. In the response, the client should explain how…
4. In some cases, managers may choose to respond …
5. The client should copy the response to all recipients …
Exercise 6.4
Write a short Audit plan. Do you still want to be an Auditor?
Exercise 6.5
Read and translate the joke:
Did you pay taxes?
A nervous taxpayer was unhappily conversing with the IRS Tax auditor who had come to review his records.
At one point the auditor exclaimed, «Mr. Carelton, we feel it is a great privilege to be allowed to live and work in the USA. As a citizen you have an obligation to pay taxes, and we expect you to eagerly pay them with a smile.»
«Thank goodness,» returned Mr. Carelton, with a giant grin on his face, «I thought you were going to want me to pay with cash.»
TEXT 7
BIG FOUR AUDITORS
Exercise 7.1
Read and translate the text:
The Big 4, sometimes written as the Big Four, are the four largest international accountancy professional service firms, which handle the vast majority of audits for publicly as well as many private companies. The Big Four firms are shown below, with their latest publicly available data:
| Firm | Revenues | People |
| Deloitte | $27.0bn | 160,000 |
| PricewaterhouseCoopers | $25.2bn | 146,700 |
| Ernst & Young | $21.1bn | 130,000 |
| KPMG | $19.8bn | 123,000 |
In its fiscal year 2010, the Deloitte member firm network became the largest private professional services network in the world. Approximately 170,000 professionals in more than 140 countries demonstrated their commitment to a single vision: to be the standard of excellence. This review shares results and examples illustrating that commitment. Collectively, they tell a story of success and leadership.
Exercise 7.2
Put down 10 key words and phrases, relating to the text:
Exercise 7.3
Make a short summary: “Will the business change you? Or will you change the business?”
AN AUDITITOR’S FUNCTIONS
Exercise
What does an auditor do? Look at the following activities and decide which ones are normally done internally or externally:
· 
Spends time getting to know the business as well as the environment and the industry in which it operates
· Analyses the internal business and financial systems used to make and record transactions
· Gathers evidence on the financial control systems and the figures in the financial statements.
· Gives advice on the business methods and transactions of the company
· Examines financial statements to determine whether they conform to generallyaccepted accounting principle
· Prepares the financial statements in accordance with the generally accepted accountingprinciples of the country where the enterprise operate
· Examines the management report and determines whether it conforms to the financial statements.
· Guarantees the correctness of the figures presented in the accounts
· Provides consulting services
· Presents a written report to the management of the company, describing whether the accounting records, financial statements and management reports conform tolegal requirements
· Maintains confidentiality and independence
REFERENCE LIST
1. Основи методики створення і застосування комп’ютерних програм у навчанні іноземних мов / [Асоянц П.Г., Сердюков П.І., Чекаль Г.С. та інші]. – Київ: КДПІІМ, 1993.
2. Гатальська В.І. Технологія групового навчання англійської мови з використанням комп’ютеризованого програмно-методичного комплексу ElanTes в середніх закладах освіти / В.І. Гатальська // Іноземні мови. – 2003. – № 3. – С. 56–59.
3. Енциклопедія педагогіних технологій та інновацій / автор-укладач Н.П. Наволокова. – Х.: Вид. група «Основа», 2010. – 176 с. – (Серія «Золота педагогічна скарбниця»).
4. Міжнародний форум «Мовна освіта: шлях до євроінтеграції»: тези доповідей / за ред. С.Ю. Ніколаєвої, К.І. Оніщенко. – К.: Ленвіт, 2005. – 290 с.
5. Программа по английскому языку для профессионального общения / [Г.Э. Бакаева, О.А. Борисенко, И.И. Зуенок и др.]. – Киев: Ленвит, 2005. – 119 с.
6. Радецька С.В. Методика навчання майбутніх економістів професійно спрямованого читання англійською мовою з використанням комп’ютера: автореф. дис. на здобуття наукового ступеня к.пед.н.). – Київ, 2005.
7. Соловова Е.Н. Методика обучения иностранным языкам. Продвинутый курс / Е.Н. Соловова. – М.: АСТ: Астрель, 2008. – 271 с.
8. Тер-Минасова С.Г. Личность, язык, культура / С.Г. Тер-Минасова // Современные теории и методики обучения иностранным языкам ; [под ред. Федоровой Л.М., Рязанцевой Т.И.]. – М. : Экзамен, 2004. – 318 с.
9. Щукин А.П. Обучение иностранным языкам. Теория и практика / А.Н. Щукин. – М. : Филоиатис, 2004. – 408 с.
10. Master P. Responses to English for Specific Purposes. – San Jose State University, 2006. – P. 31–33.
11. Portfolio. Video Resource Book. – Pearson Education Limited, 2002. – Р. 1–46.
12. Evan Frendo, Sean Mahoney. English for Accounting. – Oxford University Press, 2007. – P. 1–64.
Навчальне видання
Пернарівська Тетяна Петрівна, Фоканова Людмила Віталіївна,
Олешко Наталія Митрофанівна, Зацерковний Олег Анатолійович,
Перфілова Ганна Петрівна
ENGLISH
FOR ACCOUNTING
Навчальний посібник
Редактор І. Є. Бойко
Форматування та
комп’ютерна верстка О. В. Лисенко
Здано до друку 15.08.2013 р. Формат 60×84/16.
Папір офсетний № 1. Гарнітура «Times New Roman».
Ум. друк. арк. 7.6. Друк. арк. 8.8.
Наклад 300 прим. Замовлення № 431.
Підготовлено до друку Видавничо-інформаційним центром
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до державного реєстру видавців, виготівників і
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Серія ДК № 4336 від 12.06.2012 р.