Organizational Independence of Audit and its Role in Internal Control

To perform their role effectively, internal auditors require organizational independence from management, to enable unrestricted evaluation of management activities and personnel. Although internal auditors are part of company management and paid by the company, the primary customer of internal audit activity is the entity charged with oversight of management's activities. This is typically the Audit Committee a sub-committee of the Board of Directors. To provide independence, most Chief Audit Executives report to the Chairperson of the Audit Committee and can only be replaced with the concurrence of that individual.

Internal auditing activity is primarily directed at improving internal control. Under the COSO Framework, internal control is broadly defined as a process, effected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following internal control categories:

• Effectiveness and efficiency of operations.

• Reliability of financial reporting.

• Compliance with laws and regulations.

Послетекстовые упражнение (The exercises to be done after reading the text)

Упражнение 6.Ответьте на вопросы.

1.What do internal auditors requite to perform their role effectively?

2.What is the primary customer of internal audit?

3.What do the Chairperson of Audit Committee do to provide independence?

4.What is internal auditing activity directed at?

5.What is the main role of internal audit?

Упражнение 7.Заполните пропуски соответствующими предлогами.

1.To perform their role effectively, internal auditors require organizational independence…management.

2.This is typically the Audit Committee a sub-committee…the Board of Directors.

3.Although internal auditors are part of company management, they are paid … the company.

4.Internal auditing activity is primarily directed…improving internal control.

5… the COSO Framework, internal control is defined as a process, effected by an entity’s board of directors.

Упражнение 8.Закончите предложение, выбрав соответствующее по смыслу слово.

1.To perform their role effectively,… require organizational independence from management.

a)managers

b)government

c)internal auditors

2.Although internal auditors are part of company management are paid by the company,… of internal audit activity is charged of management’s activity.

a)the primary customer

b)banks

c)factories

3.To provide…,most Chief Audit Executives report. To the Chairperson of the Audit Committee and can be replaced with the concurrence of that individual .

a)entity

b) independence

c)freedom

4.Internal auditing is…at improving internal control.

a)directed

b)writing

c)reading

5.Under the COSO Framework, internal control is defined as…,effected by an entity’s board of directors and others personnel.

a)process

b)work

c)capital

Unit 3

Role in risk management

Предтекстовые упражнения

(The exercises to be done before reading the text)

Упражнение 1.Прочтите слова и словосочетания ,постарайтесь запомнить их русские эквиваленты.

1. auditing professional standards – ревизирующие профессиональные стандарты.

2.to evaluate - оценивать

3.to relate - иметь отношение к …

4.to set - устанавливать

5.to respond - отвергать, реагировать.

6.to impact - воздействовать, влиять

7.enterprise - предприятие

8.report - отчет

9.to perform - выполнять, исполнять

10.assessment - оценка

11.budget - бюджет

12.hedging - риск (предусмотрение риска)

13.comprehensive - всесторонний

14.current - текущий

15.litigation - тяжба

16.to focus - сосредоточится

17.to advise - советовать

18.regarding - относительно

19.to emerge - возникать, неожиданно появляться

Упражнение 2.Прочитайте вслух слова и сопоставьте их с русским значением:

To impact, to relate, to evaluate, to set, to respond, assessment, budget, comprehensive, hedging, litigation , to emerge, regarding, to focus, current, to advise, incentive, to report , impact , regarding

Упражнение 3.Переведите предложения на русский язык. Обратите внимание на новые слова и словосочетания.

1. Internal auditing professional standards require the function to monitor evaluate of the organization`s risk management processes.

2. Risk management relates to how organization sets objectives.

3. Management performs risk assessment activities as part of ordinary course of business.

4. Examples include: strategic planning, marketing planning, budgeting.

5. Internal auditors can advise management regarding the reporting of forward- looking operating measures to the Board, to help identify emerging risks.

Упражнение 4.Прочитайте и переведите слова на русский язык, обращая внимание на суффиксы и префиксы.

to evaluate – evaluation

to assess- assessment

to report- reporter

to emerge- emergence

to measure- measurement

to litigate – litigation

to regard – regarding

to relate – relation

enterprise - enterprising

Упражнение 5. Найдите в правой колонке русские эквиваленты английских слов.

1	to evaluate	a	предприятие
2	report	b	выполнить, исполнить
3	litigation	c	советовать
4	incentive	d	мера
5	hedging	e	сосредоточить
6	enterprise	f	оценить
7	to focus	g	риск
8	to perform	h	отчет
9	measure	i	стимулирующий
10	to advise	j	тяжба

Text

Прочтите текст и переведите на русский язык.