Audit report

1. Vocabulary

Accompanying (adj.) following; going with something

Ex: This story and the accompanying evidence support my assumption that she
had died in a car accident.

Consolidated (adj.) - Combined (a number of financial accounts or funds) into a

single overall account or set of accounts
Ex: It is appropriate to report shares issued by subsidiaries in consolidated
financial statements.

Affiliate (n.) - an organization that is connected with or controlled by another,

usually larger, organization; associate
Ex: Our college is an affiliate of the university.

Equity (noun) - the value of a company, which is divided into many equal parts
owned by the shareholders, or one of the equal parts into which the value of a
company is divided
Ex: Mr Yuzo sold his equity in the company last year.

Material (adj.) (formal) important or having an important effect

Ex: If you have any information that is material to the investigation, you should
state it now.

Misstatement (noun) wrong or inaccurate statement about something

Ex: I had to displace many misstatements and do additional research so as to
write the most accurate report.

Aforementioned (adj.) (formal) mentioned earlier

Ex: The aforementioned Mr Yuzo then entered the building and indulged in a
game of pachinko.

In accordance with/in conformity with following or obeying rules/law/wish

Ex: In accordance with her wishes, she was buried in France.

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 2. Listening

Listen to an extract from an independent auditors report in the U.S.A. and

answer the following questions:

1. According to this report an auditor does several things. What is mentioned?

2. What documents did the auditors look at?

3. In what ways is this report different to those used in your country?

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 3. Reading

Independent Auditors Report

To Share Owners and Board of Directors of Megatrap Corp

We have audited the accompanying statement on financial position of Megatrap

Corp and consolidated affiliates as of December 31, 2007 and 2006, and the
statements of earnings, changes in share owners equity and cash flows for each
of the years in the three-year period ended December 31, 2007. These
consolidated financial statements are the responsibility of the Companys
management. We have to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally

accepted in the United Stated of America. Under these standards we have to
plan and perform the audit to obtain reasonable assurance that the financial
statements do not have any material misstatement. We examined on a test
basis the evidence supporting the figures and disclosures in the financial
statements. We also assessed the accounting principles used and significant
estimates made by management, and we evaluated the presentation of the
statements.

In our opinion, the aforementioned financial statements present fairly, in all

material respect, the financial position of Megatrap Corp and consolidated
affiliates on December 31, 2007 and 2006, and the results of their operations
and their cash flows for each of the years in the three-year period ended
December 31, 2007, in conformity with accounting principles generally accepted
in the United States of America.

Anderson and Jackson, CPAs

April 4, 2008

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Questions:

1. In your own words define an audit report?

2. Who renders the opinion on the financial statement?

3. What are the key topics that each paragraph in the audit report covers?

4. Speaking

Present the audit report on the performance of the ABC Corp using the key
points and key vocabulary from the previous pages.