In order to get prepared for participation in the class discussion of the questions, write several paragraphs on the following:

a) Types of audit mentioned in this unit.

b) What are government auditors responsible for?

c) What do professional audit organizations do for auditors?

Ex. 15. Prepare a short talk on the following:

a) If you have a job with an auditing firm (or want to be an auditor), what sort of personal characteristics do you think are most important for auditors? Compare them with the personal features necessary for other financial professions.

b) If you have a job with an auditing firm, say how the Chamber of Auditors provides you with information about possibilities to upgrade professional skills (courses being offered by different organizations). Is the information, if any, accurate, timely, complete and relevant?

c) How is the work of auditors monitored?

Ex. 16. Talk to professional auditors to find out what they think about their professional organizations in Russia. Consider different aspects of their activities.

Reading practice

Ex. 17. a) Look through the text below to find the names of bodies responsible for continuing professional education in the UK.

b) Read the text carefully to say what CPE implies.

Continuing Professional Education

The Audit Registration Committees of the Institutes of Chartered Accountants in Britain are extremely interested in and concerned about continuing professional education (CPE). CPE is essential for all principals and employees who deal with audit work. Indeed, it is more than essential, it is compulsory. It is there to ensure that firms maintain their competence to do audit work and maintain the high professional standards expected of firms of chartered accountants.

Principals and employees must keep up-to-date with changes in company law, accounting and auditing standards, etc.

The amount of CPE is not expressed as an absolute total, but a target of 150 points. One point is given for each "unstructured" hour of CPE (e.g. reading) and three points for each "structured" hour (e.g. course attendance). Of the target of 150 at least 60 points should be structured activities. For auditors, half those amounts (i.e. 75 points of total and 30 points of structured education) should be audit-related. Thirty structured CPE points is, for example, 10 hours of course attendance.

The current system of CPE has been in place since 1991. There are no exemptions due to the age of the practitioner or the volume of audit work undertaken.

The ARCs accept that in any particular year the targets may not be met. It is important that auditing firms should take a conscientious approach to CPE. However, the ARCs are becoming increasingly concerned about firms who have done little, if any, CPE.

In the Committees' view, there is a wealth of CPE available. Courses are run by the institutes, district societies and commercial training organizations. There should be no excuse for not doing CPE. Firms should be aware that ARCs will take a firm line with firms who do inadequate CPE.

Ex. 18. a) Read through the text for general information.

b) Reread the text more carefully and pick out information about the JMU.

The EU 8th Company Law Directive set out the requirements for each member state to have a common minimum regulatory system for auditors of limited companies. The United Kingdom enacted this through the Companies Act 1989 and added a requirement for monitoring. Since 1 October 1991, a firm must be a Registered Auditor to conduct company audit work.

In 1990 the Department of Trade and Industry granted the status of Recognized Supervisory Body to ICAEW, ICAS and ICAI, thus allowing these institutes to register and regulate Registered Auditors.

Specifically, this work is done by Audit Registration Committees which register auditors and then organise monitoring.

Monitoring is conducted on behalf of the Institutes by the Joint Monitoring Unit, which was set up in 1987 to monitor the compliance of firms authorized to conduct investment business and whose role was extended in 1991 to include monitoring the work of Registered Auditors.

The monitoring activities of the JMU involve:

• issuing and reviewing firms' Annual Returns,

• conducting visits to firms,

• reporting the results of visits to the ARCs.

Activities of the JMU aim to assess whether or not the firm has complied with Audit Regulations and Standards. The JMU seeks to assist firms by making practical suggestions for improvements of their audit performance.

Words you may need:

ICAEW – Institute of Chartered Accountants of England and Wales Институт дипломированных бухгалтеров Англии и Уэльса

ICAS – Institute of Chartered Accountants of Scotland Институт дипломированных бухгалтеров Шотландии

ICAI – Institute of Chartered Accountants of Ireland Институт дипломированных бухгалтеров Ирландии