The external audit

To see the company’s internal audit in perspective, the directors should place it in the context of the wider environment. Whereas the internal audit examines factors over which the company has some control, the external audit looks at factors in the external market that the company may be able to influence but cannot control.

These include:

1. The operating or narrow external picture, covering elements such as the total size of each of the markets or segments, competition, paths to market, and the trends in these elements.

2. The broader picture, covering all the social, economic, political, legal, environmental and cultural factors that can have an impact on the company.

The external audit should give a clearer view of the markets as a precursor to identifying where the best opportunities are and where the most likely threats to the company’s market position might lie.

This information should help to determine the strength of the company’s position, compared with that of competitors, in supplying the benefits sought by the target customers.

Exercise 9. Read the text once again and express the contents of every passage in one sentence.

Exercise 10. Fill in the gaps in this passage with the words under the line; learn all the new words to expand your vocabulary on the topic.