3.Answer the questions:

1. What is auditing?

2. What does auditing involve?

3. What does a presence of an auditor suggest?

4. What types of auditing are there?

5. How many internal controls should a business use?

6. What do internal auditors do?

7. What do internal auditors seek for?

4.Fill in blanks with missing words: Audit auditor/s auditing

1. ______ is an accounting function.

2. The internal______ make suggestions to management.

3. An independent _____ examines a company’s records.

4. Let’s enumerate the major steps of the ______ process.

5. _______ is an analytical process.

6. The system and the data it produces are covered by the _____ process.

7. The_____ tests underlying accounting data.

8. One key justification for independent____ is the economy.

9. The local _____is cheaper.

10. ______can help the business set up a reliable accounting system.

11. Independent _____ is done by accountants who are not employees of the company.

5.Agree or disagree with the following, use the phrases: Absolutely, Perhaps, you are right…, Probably not…, That’s not exactly so…:

1. Auditing is done by any member of a staff.

2. Outside audits are normal part of business practice.

3. Companies need to maintain a system of internal control.

4. Companies employ only their own accountants to maintain an internal audit.

5. Greater attention may be paid to the auditor's suggestions.

6. The auditor deals with marketing, production, and purchasing.

Unit 12

1. Memorize the following words and word combinations:

public accounting - государственный учет, державний облік

refinement - усовершенствование, удосконалення

designation - обозначение, позначення

compliance - соответствие, відповідність

to comply with - подчиняться, підпорядковуватися

conformity - соответствие, відповідність

conduct - проведение, проведення

to attain - достигать, досягати

gauge - мера, міра

2. Read and translate the text:

Auditing standards

In the early history of public accounting, the quality of audit examinations often varied widely, depending on the skill, understanding, and judgment of the particular audit involved. Even at this early stage in its development, the profession quickly recognized that standards were needed. Accordingly, the profession began drawing up a number of authoritative statements that have now undergone several decades of refinement and interpretation.

A set of “generally accepted auditing standards” – to use their official designation – was issued. It is essential that every auditor has a thorough understanding of these standards. The auditor’s report refers directly to generally accepted auditing standards. The lack of compliance with generally accepted auditing standards is a violation of the Code of Professional Conduct. Thus, in conducting an audit, an independent auditor must comply with generally accepted auditing standards. Independent auditing firms themselves must comply with generally accepted auditing standards in conducting an audit practice. Such conformity involves the establishment of quality control practices and procedures.

Note that there is a clear distinction between auditing standards and auditing procedures. The term procedures in auditing refers to the methods and techniques used by the auditor in the conduct of the examination. The audit procedures used will vary according to the particular circumstances of the individual audit examination. In contrast, auditing standards deal with measures of the quality of the auditor’s performance of the procedures and the objectives to be attained by the use of the procedures undertaken. Auditing standards rarely change, and then only by official decree. Generally accepted auditing standards are important for several reasons: they define the broad objectives for every independent audit; they provide a gauge for judging an auditor’s performance; and they are recognized throughout the business and legal world as the standards of the profession.

Auditing standards are issued in the form of Statements on Auditing Standards (SASs). In most cases, each SAS covers a specific area or issue (e.g., internal control structure or analytical procedures). However, SASs can also represent several more technical issues combined into a single statement. In many cases, the actual procedures performed by an auditor exceeds the requirements of auditing standards.

There are 10 generally accepted auditing standards, which are developed into three broad categories: general standards, standards of audit work, and standards of reporting.