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financia/ english 2.

JJ a e e o 1111ti11g basics

Auditing
EXERCISE 1
Number the following words or expressions with their underlined equivalents in the text:

accuracy (1) externa!


Annual General Meeting implemented
board of directors ratified
checking shareholders (GB) or stockholders(US)
deficiencies standard operating procedures
determine subsidiaries
deviations a synonym
directives transnational corporations

The traditional definition of auditing is a review and an evaluation of financia! records by a second set
of accountants. An interna! audit is a control by a company's own accountants, checking for
completeness, (1) exactness and reliability. Among other things, interna! auditors are looking for
(2) departures from (3) a firm's established methods for recording business transactions. In most
countries, the law requires ali firms to have their accounts audited by an outside company. An
( 4) independent audit is thus a review of financia! statements and accounting records by an accountant
not belonging to the firm. The auditors have to (5) judge whether the accounts give what in Britain
is known as a "true and fair view" and in the US as a "fair presentation" of the company's [corporation's]
financia! position. Auditors are appointed by a company's (6) most senior executives and advisors,
whose choice has to be (7) approved by the (8) owners of the company's equit;y at the (9) company's
yearly assembly. Auditors write an official audit report. They may also address a "management letter"
to the directors, outlining (10) inadequacies and recommending improved operating procedures. This
leads to the more recent use of the word "audit" as (11) an equivalent term for "control": (
12) multinational companies, for example, míght undertake inventory, marketing and technical
audits. Auditing in this sense means (13) verifying that general management (14) instructions are
being (15) executed in branches, (16) companies which they control, etc.

EXERCISE 2
Add appropriate words to these phrases:
l. Auditors companies' accounts.
2. Accounts have to a fair presentation.
3. Auditors write a . . . . . . . . . . . .
4. It's the directors who the auditors.
5. Auditors sometimes better accounting procedures.
6. Using externa! auditora is a requirement.

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fi11a11cia euglisli 2.J4 accou11li11g basics

Annual General Meetings


EXERCISE 1
Write tbe questions about AGMs to whích tbese are the answers:

l.
All the shareholders.

2.
No, only che shareholders with voting shares. Sometimes there are categories of share that do
not give their holder voting rights.

3.
To approve (or reject) the company's accounts, and the auditors' and directors' reports of the year's
activities; to elect ( or re-elect) directors and auditors for the coming year; and to vote on the size
of the divídend that will be paid.

4.
The company general\y sends them the Annual Report befare they come to the meeting.

5.
They can be represented by proxy; that means they can nominare someone else, called a proxy, to
attend the meeting and vote for thern.

6.
There has to be a quorum - a mínimum number of directors and shareholders present. The size of
the quorum is usually specifíed in the company's Artícles of Association, along with ali rhe exact
rules concerning shares, general meetings, the powers of directors, thc election of officers, the
approval of accounts, etc.

The following question starters may help you:

l. Who is eligible to ?
2. Are ali the shareholders entitled to ?
3. What is che purpose of ?
4. What infonnation ?
5. What happens if ?
6. How many shareholders ?

EXERCISE2
Complete the following phrases:

l. The receive a copy of the .

2. At the AGM, they have to the company's accounts.

3. They also the company's directors and .


4. They vote on the size of the to be distributed,

5. Shareholders can appoint to vote in their place.

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