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 state$-$

ment 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 audi$-$

tor$)$ 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.

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 state$-$

ment, 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.