Auditing

The profession of the auditor is considered to be one of the most prestigious and well – paid ones. Auditors are accountants who analyze financial statements of the company and their responsibility is to express an opinion as to whether the accuracy of the company’s financial reporting meets the requirements imposed by the government. In general, auditors deal more with operating efficiency and managerial effectiveness than with the accuracy of the accounting data.

Internal auditors are known to be hired by the company in order to help to identify accounting weakness and correct them before significant errors occur. They are often analytically minded people who make flowcharts of accounting systems and evaluate these flowcharts to suggest improvements in division of labour, paper flow, cash control, or other accounting responsibilities.

Independent auditors are employed by a company’s board of directors to supply the stockholders with the results of checking the financial statements, in order to prove that annual reports are fair representations of the financial position of the company. Performing his work the auditor should follow several principles and assumptions: the company’s accounts must represent a true financial position; generally accepted accounting principles have been used at all accounting steps and accounts can be compared with those of similar companies; the proper amount of information is disclosed in the financial statements. As a result, the auditor’s opinion should be based only on facts and it must be objective. Auditors are expected to maintain a relationship of strict independence and professionalism with the companies for whom they work so they mustn’t hold shares in these companies. On the one hand, the auditor should respect the client’s confidence, so having access to some private information, the auditor must not spread it outside. On the other hand, he should think of public interests, that is why he must publish his opinion in a standard form and the information is to be clear to the stockholders. But he must always carry out his duties under the law and inform authorities about fraud.

Practice 1. Re-read the text and answer the questions.

1. What is the profession of an auditor considered to be ?

2. What do auditors deal with?

3. Why are internal auditors hired by the companies?

4. Are auditors expected to maintain a relationship of strict independence and professionalism with the companies for whom they work ?

Practice 2. Give the Russian equivalents to the word-combinations from the text:

- the most prestigious;

- analyze financial statements;

- managerial effectiveness;

- the accuracy of the accounting data;

- accounting responsibilities ;

- to prove that annual reports;

- a true financial position ;

- to maintain a relationship ;

- independent auditors .

Practice 3. Match up the words on the left with the definitions on the right.

1. share A. a holder of supplies for manufactures

2. identify B. give work to (some one) and pay them for it

3. stockholder C. cause or enable ( a condition or situation) to continue

4 .maintain D. occurring once every year

5 . account E. a part or portion of a lager amount

6. employ F. establish or indicate who or what is

7. .annual G. a report or description of an event or experience

Practice 4. Complete the sentences using the words from the table:

to maintain employed accounts identify

shares stockholder annual

1.All of us have … in this company.

2.Our interests …. in these matters.

3.The … for last year showed a profit of 2 million pounds.

4.A… sold his shares profitably.

5.How long have you been … at this job.

6.He paid … tax for his land.

7.It is enought food … life.

Practice 5. Complete the table:

noun verbs adjective

prestigious

company

indepependent

respect

financial

Text 10

Pre-reading tasks:

1. What do you know about the functions of a commercial bank?

2. Do you know the terms: a balance sheet, assets, liabilities?