Self-study Exercise 1 Auditors and their reports

_Self-study

Exercise 1

Auditors and their reports

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

Auditors check that current transactions are recorded 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.
Exercise 2

Define whether these statements are TRUE or FALSE:
Audits are conducted when the management of the company wish.

T

F

Auditors can be employed regularly or on a part-time basis.

T

F

Companies cannot perform internal audit by their own departments.

T

F

Auditors check that current transactions are recorded accurately.

T

F

Exercise 3

Fill in blanks with a suitable word from the box:


internal audited standards

independent conducted Auditor’s Opinion

1. 
   We have……………………the consolidated balance sheets of your Company and Subsidiaries at December 31, 2003.
   
2. 
   We………………………….our audit in accordance with generally accepted auditing…………....…………………………………….…….. .
   
3. 
   An……………………audit is a process conducted by a company’s own accountants.
   
4. 
   At the end of the auditing an auditor offers………………..……..……… .
   
5. 
   An external auditor is an……………………………………..expert who checks financial statements of the company.