Answer (C) is correct . In a functional audit, the auditor follows a function from beginning to end, even if that function involves more than one organizational subunit. The auditor emphasizes the operation more than its administrative or personnel activities.
Answer (A) is incorrect because A program audit would entail evaluating educational benefits. A program audit evaluates the costs and effectiveness of an activity funded by the organization that is ancillary to its main operations.
Answer (B) is incorrect because An organizational audit applies to a single “organization” within the entity, e.g., personnel. An organizational audit is primarily concerned with management control, that is, with how well managers are applying management principles.
Answer (D) is incorrect because A contract audit involves evaluation of a project undertaken for the organization by an outside entity, such as construction of a building.
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