NICOLESCU BEATRICE MEDINA

Grup 803C CIG ID

Review IV

I.Indicate whether the following statements in Metaphors Used in Auditing are

true (T) or false (F) :
T 1.The client confirms an auditors first responsability of confidentiality to his
client.
T 2.The report suggests auditors must also consider other publics.
F 3.Auditors should always go direct to the regulatory authorities in cases of fraud.
F 4.There are no cases where an auditor is legally obliged to disclose information
to the authorities.
T 5.Most professional people are aware of what auditors do.
T 6.An auditors role is very often confused with that of an accountant.

II. MATCH these three roles ( the expressions are metaphors) with their best
definition: Definitions:
Roles:
1.Watchdog - a.Responsibility for overseeing a companys finances;
2.Bloodhound - c.Responsibility for tracking down the instigators of malpractice.
3.Whistle-blower - b.Responsibility for informing the authorities of malpractice;

III. MATCH the words in the first list with their best synonym in the second one:
1.to alert; - f.to warn;
2.to stumble upon; - e.to come across
3. to spot; - g.to notice;
4. To give a nod and a wink; - c.to consider right;
5.pro-active; - i.initiating;
6.to spell out; - d.to state clearly;
7. to see fit; - h.to inform indirectly;
8.impunity; - l.freedom from punishment.
9.to flout; - j.to openly ignore
10.solace; - b.consolation;
11.to impinge upon; - a.to affect;
12.a gulf. - k.an abyss;

IV.ANSWER the following questions focused on Reporting on Financial

Statements:
1.Which are the two types of banks existing in the U.K.?
- UK incorporated banks
- UK branches of foreign banks
 2.Which are the Acts the banks in the U.K. must refer to in order to prepare their
financial statements?
- Companies Act 1985
- Banking Act 1987

3.Who are the persons employed by the banks to perform work in accordance with
the Acts specified and what are their obligations?
Auditors in the UK have a fundamental duty to comply with UK auditing standards
Banks will be required to appoint reporting accountants > auditors
a) they have been prepared on the basis of acceptable accounting policies that
have been consistently applied and are appropriate to the banks business;
b) the results of operations, state of affairs and other information disclosed in the
financial statements are compatible both with each other and with the auditors
knowledge of the bank;
c) there is adequate disclosure of all appropriate matters and the information
contained in the financial statements is suitably classified and presented; and
d) the financial statements comply with all statutory requirements and other
regulations that are relevant to the bank.

4.Which are the requirements of the Companies Act?

Under the Companies Act, the auditors need to report that:
the financial statements have been audited in accordance with auditing
standards;
in their opinion the financial statements give a true and fair view of the banks
state of affairs, its profit or loss and its cash flows; and
the financial statements have been properly prepared in accordance with the
Companies Act.

5.Can you mention the audit tests used by the auditors to form an opinion on the
financial statements?
- Compliance tests on systems
- Substantive tests

6.Which are the U.K. auditing standards?

Auditors operational standard are issued by the Auditing Practices Committee of
the Consultative Committee of Accountancy Bodies (CCAB):
a) planning, control and recording;
b) accounting systems;
c) audit evidence;
d) internal controls; and
e) review of financial statements.

7.Are there any differences between work performed by the auditors and that
performed by the reporting accountants?
YES. The scope of the work performed by reporting accountants generally differs
in nature and extent from that performed by the auditors
 In addition to their report on the financial statements, the auditors should
communicate to management any significant control weaknesses that they have
identified during the course of their work.

8.Can you specify the control types examined by the auditors and the reporting
accountants?
Auditor examine internal control, risks and control weakness
Reporting accountants preventive controls
The auditors may be content to rely on detective controls, which provide assurance
that any misappropriation or loss is properly reflected in the financial statements. The
reporting accountants may be more concerned with preventative controls, which reduce
the likelihood of loss. The reporting accountants examination of internal controls is
therefore likely to be wider in scope and extent than that of the statutory auditors.