Audits may be characterized as (a) financial statement audits, (b) compliance audits—audits of compliance with control policies and procedures and with laws and regulations, (c) economy and efficiency audits, and (d) program results audits. The work can be done by independent (external) auditors, internal auditors, or governmental auditors. Below is a list of the purposes or products of various audit engagements.
1. Render a public report on the assumptions and compilation of a revenue forecast by a sports stadium/racetrack complex.
2. Determine the fair presentation in conformity with GAAP of an advertising agency’s financial statements.
3. Report on how better care and disposal of vehicles confiscated by drug enforcement agents might save money and benefit law enforcement.
4. Determine the costs of municipal garbage pickup services compared with the same service subcontracted to a private business.
5. Audit tax shelter partnership financing terms.
6. Study a private aircraft manufacturer’s test pilot performance in reporting on the results of test flights.
7. Conduct periodic examination of a bank for solvency.
8. Evaluate the promptness of materials inspection in a manufacturer’s receiving department.
Prepare a three-column schedule showing:
(1) Each of the engagements listed above;
(2) The type of audit (financial statement, compliance, economy and efficiency, or program results); and
(3) The kind of auditors you would expect to be involved.