What is auditing

Auditing is a very ancient activity. «Audit» is a Latin word that means “he hears”. In ancient times auditing was the process whereby the owner heard the account given by his steward of the use of the owner's resources. The origin of stewardship goes back into the Middle Ages. It was the original purpose of accounting and was also called “accountability”. Kings or lords who were away at war or for other purpose usually left their estates in the hands of the steward. The steward kept an account of the payments and receipts of the estate so that he could be discharged of responsibility when the owner returned. As a rule, the steward used to tender an account to the owner, who might be illiterate and had to hear it («audit» — «he hears»).

Auditing is an accounting function that involves the review and evaluation of financial records. It is done by someone other than the person who entered the transactions in the records. This work can be done both by internal auditors and outside ones.

Many companies employ their own accountants, to maintain an internal audit. They continuously review operating procedures and financial records and report to management on the current state of the company's fiscal affairs. They check the accounting records in regard to completeness and accuracy, making sure that all irregularities are corrected. Overall, the internal auditors seek to ensure that the various departments of the company follow the policies and procedures established by management.

Currently, outside auditing is a normal and regular part of business-practice. Independent auditing is done by accountants who are not employees of the organization whose books they examine. The independent accountant is a highly qualified specialist. He or she review the business operating activities, examine financial statements, the accounting records, and supporting business papers usually known as evidential matter. It is performed in order to determine the accuracy, authenticity and completeness of the records. The accountant's judgment or opinion on the fairness of the records is contained in a document sent to the client upon completion of the audit. There are 4 major companies that compete in the financial audits arena. They form what is known as the Big Four. These companies are international forms and are the most well known outside auditors in the industry. They are as follows in order of size:

1)PricewaterhouseCoopers, also known as PwC;

2)KPMG, used to be known as Klienveld Peat Marwick Gordeler;

3)DeloitteTouche Tohmatsu, also known as Deloitte;

4)Ernst & Young, also known as E & Y.

There are many other audit firms competing with big four. In the US, mid-tier firms such as Grant Thorton and Moss Adams serve many mid-size companies while smaller entities may contract the services of local CPA firms. In the UK the medium sized firms are also referred to as mid-tier. Many of these firms are international and increasingly are competing for work against the big four.

XXV. Answer the following questions.1.How can you define auditing?

2.What is the origin of the word «audit»?

3.Who is usually auditing done by?

4.What is the aim of internal auditors?

5.What are the duties of independent accountants?

6. What are the most famous companies that compete in the
financial audits arena?

UNIT VIII

Text A : Management and managers

Text В : Kinds of management

I. Practise the pronunciation of the following words.

a) stress the first syllable :

capture, input, utilize, various, process, subject, purpose, common, area, principle, concept, theory, human, follow, verbal, certain, industry, factor, discipline, probably, monetary, primary, specify, leadership, willingly, governor, contact, satisfy, designate, manage, object (n);

b) stress the second syllable:

apply, attainable, concise, affect, complexity, involve, simplistic, anticipating, objective, object (v), efficient, effective, achieve, attract, competitive, define, perhaps, activity, environment, include, facility, ongoing, unable, decision, important, result, determine, ensure, society, provide.

II. Before you read answer the following questions:

1.What does the term «management» mean?

2.What are the most important skills of manager?

3.What kind of a person managerial career demands today?

III. Read and memorize the words and word —combinations:

to achieve goals — досягати мети

to anticipate future trends — передбачати майбутні тенденції

concise — чіткий, стислий

facilities and equipment — пристрої та обладнання

major purpose of studying — основна мета вчення

to link together — зв'язувати разом

ongoing and long-term — тимчасові та довгострокові

organizational objectives — організаційні цілі

simplistic — спрощений

utilize basic kinds — використовувати основні види

various tasks — різноманітні завдання

verbal skills — вміння володіти мовою.

IV. Text А