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❑ PROVA DE LÍNGUA INGLESA:
- CESPE-2014-CÂMARA DOS DEPUTADOS-ANALISTA LEGISLATIVO-13/04/2014.
❑ ESTRUTURA-PROVA:
• 15 TFQs (True False Questions)
• Texto (1) – | Internal auditing: history, evolution, and prospects. | https://na.theiia.org |
• Texto (2) – | Shining a light on the auditors | The Economist |
• Texto (3) – | Internal auditing: history, evolution, and prospects. | https://na.theiia.org |
❑ GABARITO:
01-E, 02-C, 03-E, 04-E, 05-C
06-E, 07-E, 08-E, 09-X, 10-E
11-C, 12-E, 13-C, 14-C, 15-C
❑ PROVA:
As far back as 4000 B.C., historians believe, formal
record-keeping systems were first instituted by organized
businesses and governments in the Near East to allay their concerns about correctly accounting for receipts and
disbursements and collecting taxes. Similar developments
occurred with respect to the Zhao dynasty in China (1122-256
7 B.C.). The need for and indications of audits can be traced
back to public finance systems in Babylonia, Greece, the
Roman Empire, the City States of Italy, etc., all of which developed a detailed system of checks and counterchecks.
Specifically, these governments were worried about
incompetent officials prone to making bookkeeping errors and inaccuracies as well as corrupt officials who were motivated to
perpetrate fraud whenever the opportunity arose. Even the
Bible (referring to the period between 1800 B.C. and A.D. 95) explains the basic rationale for instituting controls rather
straightforwardly: "…if employees have an opportunity to steal
they may take advantage of it." The Bible also contains examples of good internal control practices, such as dual
custody of assets, restriction of access to assets, and
segregation of duties, as well as examples of the need for competent and honest employees. Historically then, the
emergence of double-entry bookkeeping in circa 1494 A.D. can
be directly traced to the critical need for exercising stewardship and control. Throughout European history, for instance, fraud
cases — such as the South Sea bubble of the 18th century, and
the tulip scandal — provided the justification for exercising more control over managers.
- S. Ramamoorti. Internal auditing: history, evolution, and prospects. p. 3. Internet: <https://na.theiia.org> (adapted).
According to the text above, judge the following items.
01. The author points to a discontinuity in the history of financial bookkeeping from the end of the 15th century to the 18th century.
02. The word "allay" (R.3) is used as a verb and it means reduce or ease.
03. People have inherited from the Bible the notion that auditing is necessary because of the inherently dishonest nature of human beings.
04. Without changing the meaning of the text, the fragment "explains the basic rationale for instituting controls rather straightforwardly" (R.16-17) could be correctly replaced with explains a common-sense approach to retain control instead of simply handing it over.
➧ TEXT II:
Shining a light on the auditors
Every financial meltdown prompts a hunt for scapegoats. In the wake of the most recent one, calls to reform accounting have grown particularly loud, and action is on the way. In the coming months both America and the European Union are expected to introduce new rules aimed at enhancing auditors’ independence. But for all the heated debate over the changes, any improvement is likely to be modest.
America's bean-counters were effectively self-regulating until 2002. That year, following a wave of accounting scandals, Congress passed the Sarbanes-Oxley act to reform corporate governance. It limited the consulting work firms could do for their audit clients and set up a new regulator, the Public Company Accounting Oversight Board. At a meeting on December 4th it outlined three policies it expects to implement by the end of 2014.
One aims to make audit reports more useful by requiring a section highlighting “critical audit matters” — the high-stakes judgment calls that keep accountants up at night, such as how the business being audited has valued its intangible assets. Another would cut the share of an audit that accounting firms can outsource without disclosure from 20% to 5%. Such information is valuable in emerging markets, where local accountants vary widely in quality. The most controversial reform would identify by name the lead partner responsible for each audit.
Although identifying partners does not increase their legal liability, it does put their reputation on the line. This seems to make accountants more cautious.
- The Economist, December 7th 2013, p. 68 (adapted).
05. If the expression "for all the" (R.6) were replaced by despite the, the text would still be correct and the meaning of the sentence would be maintained, something that would not occur if it were replaced by if there is.
06. In line 8, "bean-counters" is a derogatory expression used to describe second-class accountants who deal specifically with agribusiness.
07. The idea expressed in the second paragraph can be correctly explained by the following sentence: In 2002 a draft bill was voted by the American Congress proposing the setting of enhanced standard for all US state-owned-company boards, management and public accounting firms.
08. According to the text, Congress’ underlying motivation to pass the Sarbanes-Oxley act was its indignation over the shameful behaviour of some corporations in early 21st century.
08. Assessing the criteria businesses apply to set a price to their intangible assets is the kind of job that makes auditors highly anxious.
10. The title of the text refers to the fact that it is necessary to start regarding auditors as key players in today's globalized world.
11. One of the premises of the text is that every time there is a sudden economic crisis, we tend to quickly try to find a culprit.
➧ TEXT III:
A compelling case can be made for mandatory audit rotation that auditors who keep the same client for too long get excessively cosy with its management. As somebody has put it, "When the same incumbent firm has been in place for 100 years, to me that's not an audit, that’s a joint venture."
Most academic studies have either found no linkVbetween the length of a relationship and its quality, Vor determined that longer tenures yield better results, because theVaccountants have time to master the intricacies of clients' businesses. Obliging companies to solicit bids at regularVintervals, as Britain does, has shaken up the business: HSBCVsaid in August that it will drop KPMG in favour of PwC; on
December 2nd Unilever announced that it is making theVopposite switch. Indeed, the big accounting firms argue that forced rotation would reduce competition by preventing the incumbent from bidding.
Proponents counter that the accounting giants, and academics whose research is often financed by them, have good reason to resist change. Among the reform’s strongest supporters are smaller firms that hope to break the Big Four’s stranglehold.
Yet even the most vocal advocates of mandatory rotation concede that it is no magic bullet. Auditors have a conflict of interest at the heart of their business — they are paid by the companies they are supposed to assess objectively. Unless that changes, there will be no substitute for investors doing their own due diligence.
- Idem (adapted).
12. The author accuses some firms of bribing unscrupulous academics to put forward compelling arguments hereby they could block proposals to create mandatory audit rotation.
13. The fragment "longer tenures yield better results" (R.8) indicates that it is necessary a considerable amount of time for an auditing company which has been hired to sharpen its auditing skills and deliver superior results.
14. In "to me that’s not an audit, that’s a joint venture" (R.5), the word "that" refers to the situation mentioned before, that is, the same auditing firm being responsible for a client for too long a period of time.
15. The expression "magic bullet" (R.23) could be correctly replaced by cure-all, wonder drug or perfect solution, without any change in its meaning.
➧ TERMINOLOGIA TÉCNICA:
(1) DOUBLE-ENTRY BOOKKEEPING (Translation) – MÉTODO DAS PARTILHAS DOBRADAS.
(2) DOUBLE-ENTRY BOOKKEEPING (Definition: the accounting system in which each transaction is recorded twice, as a debit in one account and as a credit in another. For example, a sale is recorded as a credit in one account and the money owed by the buyer is recorded as a debit in another.)
(3) DOUBLE-ENTRY BOOKEEPING (Definition: the system of people and organizations that are involved in getting a product from the place where it is made to customers)
