Toxic Waste Disposal Company, Inc. (TWD) is a not-for-profit organization that receives grants and fees from various state and municipal governments as well as grants from several federal government agencies.

TWD engaged Hall \& Hall, CPAs, to audit its financial statements for the year ended July 31, 19X1, in accordance with Government Auditing Standards. Accordingly, the auditors' reports are to be submitted by TWD to the granting government agencies, which make the reports available for public inspection.

The auditors' separate report on compliance with laws and regulations that was drafted by a staff accountant of Hall \& Hall at the completion of the engagement contained the statements below. It was submitted to the engagement partner who reviewed matters thoroughly and properly concluded that no material instances of noncompliance were identified.

1. A statement that the audit was conducted in accordance with generally accepted auditing standards and with Government Auditing Standards issued by the comptroller general of the United States.

2. A statement that the auditor's procedures included tests of compliance.

3. A statement that the standards require the auditors to plan and perform the audit to detect all instances of noncompliance with applicable laws and regulations.

4. A statement that management is responsible for compliance with laws, regulations, contracts, and grants.

5. A statement that the auditors' objective was to provide an opinion on compliance with the provisions of laws and regulations equivalent to that to be expressed on the financial statements.

6. A statement that the results of the tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.

7. A statement that the report is intended only for the information of the specific legislative or regulatory bodies, and that this restriction is intended to limit the distribution of the report.

Required:

For each of the above statements indicate whether each is an appropriate or inappropriate element within the report on compliance with laws and regulations. If a statement is not appropriate, explain why.