Lecturer:
Phung Thi Thu Ha
Unit 4
Auditing
Topics of the lessons
Role of auditors
Types of audits
Auditor-client relationship
Describing graphs
An auditor’s report
Useful language and skills
Telephone phrases
Making appointments
Talking about trends
Talking about causes and results
Time 5 periods
What does an auditor do? Look at the following
activities and decide which ones are normally done
internally or externally.
Janet Hendley, a partner in an audit firm, calls
1 Claude Bernaud, the CFO of a French company.
Listen to the dialogue, and then decide if the
statements which follow are true or false.
1. Janet wants to talk to Claude about a report.
2. Janet thinks that capitalization of costs should be expenses in the
P&L.
3. Claude agrees with Janet on this point.
4. Claude thinks capitalization of costs should be classed under machine
upgrades.
5. Claude’s reasoning is that the upgrades are really investments in the
future.
6. Janet agrees to reconsider her opinion.
Put the letters into the correct order to make words
2 used in the conversation that have a similar meaning
to the words on the right.
1. L-P-Y-E-R-R-I-I-M-A-N preliminary initial
2. S-D-S-I-S-U-C discuss talk about
3. G-D-U-E-P-A-R upgrade improvement
4. T-V-E-I-Y-R-A variety range
5. B-E-S-I-A-Z-L-E sizeable big
6. G-U-F-E-R-I figure amount of money
7. S-C-O-D-I-N-R-E consider think about
8. E-E-B-A-R-S-N-O-L-A reasonable sensible
Now listen again and check your answers.
Find the sentence on the right which is closet in
3 meaning to the sentence on the left.
1. We have to keep up with a. We can ignore the competition.
the competition. b. We can’t ignore the competition.
2. You can’t really justify a. We can’t defend your actions.
spending so much money on b. We can defend your actions.
office equipment.
3. This plan is designed to a. This is a plan to start a business.
keep us in business. b. This is a plan to get business.
4. This was a sizeable a. We spent very little money on this.
investment on our part. b. We spent a lot of money on this.
Find the sentence on the right which is closet in
3 meaning to the sentence on the left.
5. These figures are too a. These figures are very high.
material for us to ignore. b. These figures are very low.
6. I suggest you consider a. Have another think about it.
this again. b. Forget it.
7. I’m sure you’ll find it’s a. You think this is fair.
reasonable. b. I think this is fair.
Here is the follow-up conversation between Claude
4 and Janet, but the sentences are in the wrong order.
Re-arrange them so that the conversation makes
sense.
9
5
11
3
13
7
12
14
10
6
4
8
Work with a partner to practise making a phone call.
5 Use phrases from the box below.
Partner A page 50
PARTNER FILES
Partner B page 52
Two colleagues from an auditing firm are discussing
6 the latest financial scandal. Listen to part 1 of the
dialogue and answer the following questions.
a. What is Heidi worried about?
That the scandals with Megacorp PLC will mean that they are going to
have to change the way they do their job.
b. What does Phillip think?
That their role is only to give an opinion based on estimates, and that
they can’t review every detail.
c. What does Heidi think investors should get?
Correct financial information.
d. What example of inaccurate information does she give?
Overstating assets by 50%.
Now listen to part 2 of the dialogue and complete the
6 gaps.
overstate anything.
Philip: We don’t ………………….
Heidi: But we’re expected to find these things. That’s what we’re paid
to do.
review the information
Philip: Hang on a minute. Our job is to ……………..
provided to us by the management of a company. We have to assume
honest . We’re not police officers.
that they’re being …..………….
Heidi: But…
legal mechanisms to deal
Philip: Let me finish. Look, there are …………..
with people who commit ……………….fraud . The auditing profession has
regulations
it’s own ………………………… and investors trust this. It’s tried and
tested.
Now listen to part 2 of the dialogue and complete the
6 gaps.
rely
Heidi: All I’m saying is that investors have a right to ……….…….. on
check
the financial information they read, and we’re paid to ………….…….
Self-regulation
exactly that. ……………………………. may not be enough. And the
trend is ...
Philip: I agree that it’s a bit strange that we’re paid by the same people
audit
who we .……………, but it’s always been this way and I don’t see
how that can be changed, do you?
Whose opinion do you agree with? What responsibilities do
auditors have in their relationship with their clients? How is this
regulated in your country or in a country you know? Is the
regulation strong enough?
Auditors often have to write or present reports on the
7 financial information they have audited. This is
especially important for enterprises with branches or
subsidiaries in foreign countries. Look at the
following sentences and decide which graph or chart
goes best with the description.
a g
c
j h
b i
f e
d
Now choose the option which makes most sense.
8
rose
Have a look at this. Last year was really good. Profits fell/rose
dramatically after we launched Glenogen. And here you can see how it
stable
affected the rest of the market. CFL remained stable/ gradual, which
was a bit of a surprise, but Junfil was hit quite badly – sales
decreased
increased/decreased to almost non-existent. Now look here. This next
graph shows what we think will happen next year. Good news again.
up
Everything’s going up/down.
Work with a partner to practise describing graphs or
9 trends. Use phrases from Exercise 7.
Partner A page 51
PARTNER FILES
Partner B page 53
Now write a report on some figures from your
10 company or from one of your clients. Explain the
movement from one year to the next, giving the cause
and the result. Here are some phrases which might
help.
Read this example of an extract from an independent
Out auditors’ report in the USA and answer the questions.
put
Over
to
you
According to the report, an audit does several things. What is
mentioned?
What documents did the auditors look at? In what ways this report
different to those used in your country?