Chapter $02$ Problem $2-24$ LO $2-1,2-2$

Audits can be categorized into five types: $(1)$ financial statement audits, $(2)$ audits of internal control, $(3)$ compliance audits, $(4)$ operational audits, and $(5)$ fraud audits.

Required:

For each of the following descriptions, indicate which type of audit $($financial statement audit, audit of internal control, compliance audit, operational audit, or fraud audit$)$ best characterizes the nature of the audit being conducted. Also indicate which type of auditor $($external auditor, internal auditor, government auditor, or fraud auditor$)$ is likely to perform the audit engagement. If more than one type of auditor might perform the audit engagement, include every appropriate type of auditor in your answer.

Note: If more than one option is appropriate for one of the dropdowns below, select the choice that represents all applicable options.

a$.$ Evaluate the policies and procedures of the Food and Drug Administration in terms of bringing new drugs to market.

b$.$ Determine the fair presentation of Ajax Chemical's balance sheet, income statement, and statement of cash flows.

c$.$ Review the payment procedures of the accounts payable department for a large manufacturer.

d$.$ Examine the financial records of a division of a corporation to determine if any accounting irregularities have occurred.

e$.$ Evaluate whether funds for a low$-$income public housing project are being used in an efficient manner by the project manager in maintaining and upgrading the property.

f$.$ Evaluate a company's computer services department in terms of the efficient and effective use of corporate resources.

g$.$ Audit the partnership tax return of a real estate development company.

h$.$ Investigate the possibility of payroll fraud in a labor union pension fund.

$\backslash$table$[[$Item Number,Type of Audit,Type of Auditor$],[$a$.,$Compliance,Government$],[$b$.,$Financial statement,External$],[$c$.,$Operational,Internal$],[$d$.,$Fraud,Internal$],[$e$.,$Operational,Government and internal$],[$f$.,$Operational,Internal$],[$g$.,$Compliance,External$],[$h$.,$Fraud or Financial statement,$-$ External and fraud$]]$