Megillah, Chapter Two, Mishnah 1. The Mishnah opens with the law of the order of the reading: "HaKorei es haMegillah lemafrei'a - lo yatza" - one who reads the Megillah out of order has not fulfilled his obligation.
The source of this law is the verse "And these days are remembered and observed," from which we derive a comparison between the remembering and the observing: just as the events themselves cannot be done out of order, and it is impossible for the fifteenth to precede the fourteenth, so too the recounting of the events of the Purim story must follow their proper order, and may not be done out of sequence.
The Language of the Reading and Its Script:
The Mishnah continues and lists additional ways in which one does not fulfill his obligation:
"Kara al peh" - he recited it by heart, without a written Megillah lying before him.
"Kara Targum" - he read it in Aramaic, a language he does not understand.
"Bechol lashon" - and likewise in any other language: even if the Megillah is written in that language, as long as he does not understand it, he has not fulfilled the mitzvah.
The Mishnah, however, adds a qualification: "Aval korin osah lalo'azos bela'az" - it is permitted to read the Megillah to speakers of a foreign language in that foreign language which they understand.
"VehaLo'ez sheshama Ashuris - yatza" - a speaker of a foreign language who does not understand Hebrew, and who heard the Megillah read in Hebrew and in Hebrew script (Ashuris), has fulfilled his obligation.
The principle that emerges is this: a reading in Hebrew and in Hebrew script is effective for everyone, even for those who do not understand the language; whereas a reading in any other language is effective only for one who understands that language.
In summary: in this Mishnah we learned two fundamentals of the reading of the Megillah: one who reads out of order has not fulfilled his obligation, as derived from the comparison to the verse "remembered and observed"; and one who reads by heart, or in Aramaic or any language he does not understand, has likewise not fulfilled his obligation. On the other hand, for speakers of a foreign language we read in that language, and a foreign speaker who heard it in Ashuris has fulfilled his obligation - for a reading in the holy tongue and in Hebrew script fulfills the obligation for all.