Academic Year: Length: 50min

2020/2021 English Written Test - 3rd Term - 11th grade

Area: Accounting and Administration Test B
June, 2021
Name:_______________________________Class______

Read the following email:

Career Path -
Accounting
Vocabulary:
Adjustment - Ajuste Manufacturing - Produção
Capitalize - Capitalizar Revenue - Receita
Depreciate - Desvalorizar Surpass - Superar

FROM; Patrick Stevens, Auditor, Thomas and Riley LLP

TO: Jack River, Thomas and Riley LLP

Mr. Riley,
I have completed my audit of Endless Magic Toy Company. Unfortunately, I cannot give a clean opinion
of this company without material adjustment to the financial statements. I found a few anomalous entries in
its books that should be attended to.

First, I noticed that he reported sales figures do not match the actual revenue. At first, I thought it could
have been a simple clerical error. But then I recalled something I had read earlier about bonuses for sales
people. Sure enough, it appears the sales people reported erroneous sales figure – sales that won’t actually
occur until next quarter. I believe they did thus in order to surpass the bonus cutoff point.

The second impropriety that I found had to do with some new manufacturing equipment. As you know,
these assets should have been capitalized and depreciated over their useful life. But someone chose to write
the entire purchase price off as an expense. Any government tax department employee would see this
immediately in an audit.

I am surprised by the lack of professional skepticism on the part of Endless Magic Toy Company’s internal
auditor. I have a meeting with the Chief Operating Officer tomorrow, and I found plan to discuss these
issues with her.

Regards,
Patrick Stevens
 I - TEXT COMPREHENSION

1- Mark True (T) or False (F) in the sentences below, and correct the false ones:
a) The Endless Magic’s Salespeople falsified the sales information. ______. ________________________
_____________________________________________________________________________________
_____________________________________________________________________________________

b) Patrick Stevens thinks that the Endless Magic Toy Company’s internal auditor is very professional. ___.
______________________________________________________________________________________
______________________________________________________________________________________

c) It could have been a simple clerical error because the reported sales figures really match the actual
revenue.______. _____________________________________________________________________
____________________________________________________________________________________

d) Since Patrick didn’t find any anomalous, he could give a clean opinion about the company. ____. ____
_____________________________________________________________________________________
_____________________________________________________________________________________

2- Match the words / expressions below with their definitions:

- Impropriety + The level that must be reached to receive some reward

- Professional skepticism + out of the ordinary
- Chief operating officer + any activity that is unethical
- Cutoff point + a critical attitude an auditor must have
- Anomalous