diff --git a/common/djangoapps/student/models.py b/common/djangoapps/student/models.py
index 6a5adc388e..8b1c259b48 100644
--- a/common/djangoapps/student/models.py
+++ b/common/djangoapps/student/models.py
@@ -943,17 +943,12 @@ class CourseEnrollmentManager(models.Manager):
 
         return is_course_full
 
-    def users_enrolled_in(self, course_id, mode=None):
-        """
-        Returns a queryset of User for every user enrolled in the course.
-
-        course_id (CourseKey): The key of the course associated with the enrollment.
-        mode (String): The enrolled mode of the users.
-        """
-        _query = {'courseenrollment__course_id': course_id, 'courseenrollment__is_active': True}
-        if mode:
-            _query['courseenrollment__mode'] = mode
-        return User.objects.filter(**_query)
+    def users_enrolled_in(self, course_id):
+        """Return a queryset of User for every user enrolled in the course."""
+        return User.objects.filter(
+            courseenrollment__course_id=course_id,
+            courseenrollment__is_active=True
+        )
 
     def enrollment_counts(self, course_id):
         """
diff --git a/lms/djangoapps/certificates/models.py b/lms/djangoapps/certificates/models.py
index f87b5c7b5d..a375b980a7 100644
--- a/lms/djangoapps/certificates/models.py
+++ b/lms/djangoapps/certificates/models.py
@@ -95,7 +95,9 @@ class CertificateStatuses(object):
     readable_statuses = {
         downloadable: "already received",
         notpassing: "didn't receive",
-        error: "error states"
+        error: "error states",
+        audit_passing: "audit passing states",
+        audit_notpassing: "audit not passing states",
     }
 
     PASSED_STATUSES = (downloadable, generating)
diff --git a/lms/djangoapps/instructor/tests/test_certificates.py b/lms/djangoapps/instructor/tests/test_certificates.py
index a1d5a1acc5..14e404af84 100644
--- a/lms/djangoapps/instructor/tests/test_certificates.py
+++ b/lms/djangoapps/instructor/tests/test_certificates.py
@@ -13,9 +13,11 @@ from django.core.exceptions import ObjectDoesNotExist
 from django.test.utils import override_settings
 from django.conf import settings
 
-from mock import patch, PropertyMock
-
 from course_modes.models import CourseMode
+from capa.xqueue_interface import XQueueInterface
+from lms.djangoapps.grades.tests.utils import mock_passing_grade
+from lms.djangoapps.verify_student.tests.factories import SoftwareSecurePhotoVerificationFactory
+from lms.djangoapps.verify_student.models import SoftwareSecurePhotoVerification
 from xmodule.modulestore.tests.django_utils import SharedModuleStoreTestCase
 from xmodule.modulestore.tests.factories import CourseFactory
 from config_models.models import cache
@@ -351,69 +353,84 @@ class CertificatesInstructorApiTest(SharedModuleStoreTestCase):
             u'the "Pending Tasks" section.'
         )
 
-    @patch(
-        'lms.djangoapps.grades.new.course_grade.CourseGrade.summary',
-        PropertyMock(return_value={'grade': 'Pass', 'percent': 0.75})
-    )
     @override_settings(AUDIT_CERT_CUTOFF_DATE=datetime.now(pytz.UTC) - timedelta(days=1))
     @ddt.data(
-        ('verified', 'ID Verified', True),
-        ('unverified', 'Not ID Verified', False)
+        (CertificateStatuses.generating, 'ID Verified', 'approved'),
+        (CertificateStatuses.unverified, 'Not ID Verified', 'denied'),
     )
     @ddt.unpack
-    def test_verified_users_with_audit_certs(self, expected_cert_status, verification_output, user_verified):
+    def test_verified_users_with_audit_certs(self, expected_cert_status, verification_output, id_verification_status):
         """
-        Test that `verified_users_with_audit_certs` option regenerates certificate for verified users with audit
-        certificates get certificate.
+        Test certificate regeneration for verified users with audit certificates.
 
         Scenario:
-            User enrolled in course as audit,
-            User passed the course as audit so they have `audit_passing` certificate status,
+            Enroll user in a course in audit mode,
+            User passed the course and now he has `audit_passing` certificate status,
             User switched to verified mode and is ID verified,
-            Regenerate certificates for `verified_users_with_audit_certs` is run,
-            Modified certificate status is `verified` if user is ID verified otherwise `unverified`.
+            Regenerate certificate for it,
+            Modified certificate status is `generating` if user is ID verified otherwise `unverified`.
         """
         # Check that user is enrolled in audit mode.
         enrollment = CourseEnrollment.get_enrollment(self.user, self.course.id)
-        self.assertEqual(enrollment.mode, CourseMode.AUDIT)
+        self.assertEquals(enrollment.mode, CourseMode.AUDIT)
 
-        # Generate certificate for user and check that user has a audit passing certificate.
-        with patch('student.models.CourseEnrollment.refund_cutoff_date') as cutoff_date:
-            cutoff_date.return_value = datetime.now(pytz.UTC) - timedelta(minutes=5)
-            cert_status = certs_api.generate_user_certificates(student=self.user, course_key=self.course.id, course=self.course)
-            self.assertEqual(cert_status, CertificateStatuses.audit_passing)
-
-        # Update user enrollment mode to verified mode.
-        enrollment.update_enrollment(mode='verified')
-        self.assertEqual(enrollment.mode, CourseMode.VERIFIED)
-
-        with patch(
-            'lms.djangoapps.verify_student.models.SoftwareSecurePhotoVerification.user_is_verified'
-        ) as user_verify:
-            user_verify.return_value = user_verified
-
-            # Login the client and access the url with 'certificate_statuses'
-            self.client.login(username=self.global_staff.username, password='test')
-            url = reverse('start_certificate_regeneration', kwargs={'course_id': unicode(self.course.id)})
-            response = self.client.post(url, data={'certificate_statuses': ['verified_users_with_audit_certs']})
-
-            # Assert 200 status code in response
-            self.assertEqual(response.status_code, 200)
-            res_json = json.loads(response.content)
-
-            # Assert request is successful
-            self.assertTrue(res_json['success'])
-
-            # Assert success message
-            self.assertEqual(
-                res_json['message'],
-                u'Certificate regeneration task has been started. You can view the status of the generation task in '
-                u'the "Pending Tasks" section.'
+        with mock_passing_grade():
+            # Generate certificate for user and check that user has a audit passing certificate.
+            cert_status = certs_api.generate_user_certificates(
+                student=self.user,
+                course_key=self.course.id,
+                course=self.course,
             )
-            # Check user has a not audit passing certificate now.
+
+            # Check that certificate status is 'audit_passing'.
+            self.assertEquals(cert_status, CertificateStatuses.audit_passing)
+
+            # Update user enrollment mode to verified mode.
+            enrollment.update_enrollment(mode=CourseMode.VERIFIED)
+            self.assertEquals(enrollment.mode, CourseMode.VERIFIED)
+
+            # Create and assert user's ID verification record.
+            SoftwareSecurePhotoVerificationFactory.create(user=self.user, status=id_verification_status)
+            actual_verification_status = SoftwareSecurePhotoVerification.verification_status_for_user(
+                self.user,
+                self.course.id,
+                enrollment.mode,
+            )
+            self.assertEquals(actual_verification_status, verification_output)
+
+            # Login the client and access the url with 'audit_passing' status.
+            self.client.login(username=self.global_staff.username, password='test')
+            url = reverse(
+                'start_certificate_regeneration',
+                kwargs={'course_id': unicode(self.course.id)}
+            )
+
+            with mock.patch.object(XQueueInterface, 'send_to_queue') as mock_send:
+                mock_send.return_value = (0, None)
+                response = self.client.post(
+                    url,
+                    {'certificate_statuses': [CertificateStatuses.audit_passing]}
+                )
+
+                # Assert 200 status code in response
+                self.assertEquals(response.status_code, 200)
+                res_json = json.loads(response.content)
+
+                # Assert request is successful
+                self.assertTrue(res_json['success'])
+
+                # Assert success message
+                self.assertEquals(
+                    res_json['message'],
+                    u'Certificate regeneration task has been started. '
+                    u'You can view the status of the generation task in '
+                    u'the "Pending Tasks" section.'
+                )
+
+            # Now, check whether user has audit certificate.
             cert = certs_api.get_certificate_for_user(self.user.username, self.course.id)
-            self.assertNotEqual(cert['status'], CertificateStatuses.audit_passing)
-            self.assertEqual(cert['status'], expected_cert_status)
+            self.assertNotEquals(cert['status'], CertificateStatuses.audit_passing)
+            self.assertEquals(cert['status'], expected_cert_status)
 
     def test_certificate_regeneration_error(self):
         """
diff --git a/lms/djangoapps/instructor/views/api.py b/lms/djangoapps/instructor/views/api.py
index d4647dc810..fe3484cf9c 100644
--- a/lms/djangoapps/instructor/views/api.py
+++ b/lms/djangoapps/instructor/views/api.py
@@ -2866,8 +2866,8 @@ def start_certificate_regeneration(request, course_id):
         CertificateStatuses.downloadable,
         CertificateStatuses.error,
         CertificateStatuses.notpassing,
-        # verified users with audit passing and not passing certificate statuses.
-        'verified_users_with_audit_certs'
+        CertificateStatuses.audit_passing,
+        CertificateStatuses.audit_notpassing,
     ]
     if not set(certificates_statuses).issubset(allowed_statuses):
         return JsonResponse(
diff --git a/lms/djangoapps/instructor/views/instructor_dashboard.py b/lms/djangoapps/instructor/views/instructor_dashboard.py
index 8621e7a082..8c3327f3a2 100644
--- a/lms/djangoapps/instructor/views/instructor_dashboard.py
+++ b/lms/djangoapps/instructor/views/instructor_dashboard.py
@@ -343,11 +343,6 @@ def _section_certificates(course):
         for certificate in GeneratedCertificate.get_unique_statuses(course_key=course.id)
     }
 
-    # Get the count of all course verified users with audit passing and audit not passing statuses.
-    verified_users_with_audit_certs = CourseEnrollment.objects.users_enrolled_in(course.id, mode='verified').filter(
-        generatedcertificate__status__in=[CertificateStatuses.audit_passing, CertificateStatuses.audit_notpassing]
-    ).count()
-
     return {
         'section_key': 'certificates',
         'section_display_name': _('Certificates'),
@@ -359,7 +354,6 @@ def _section_certificates(course):
         'html_cert_enabled': html_cert_enabled,
         'active_certificate': certs_api.get_active_web_certificate(course),
         'certificate_statuses_with_count': certificate_statuses_with_count,
-        'verified_users_with_audit_certs': verified_users_with_audit_certs,
         'status': CertificateStatuses,
         'certificate_generation_history':
             CertificateGenerationHistory.objects.filter(course_id=course.id).order_by("-created"),
diff --git a/lms/djangoapps/instructor_task/api.py b/lms/djangoapps/instructor_task/api.py
index 79b8ecc1bc..a412daf3b9 100644
--- a/lms/djangoapps/instructor_task/api.py
+++ b/lms/djangoapps/instructor_task/api.py
@@ -33,7 +33,7 @@ from lms.djangoapps.instructor_task.tasks import (
     export_ora2_data,
 )
 
-from certificates.models import CertificateGenerationHistory, CertificateStatuses
+from certificates.models import CertificateGenerationHistory
 
 from lms.djangoapps.instructor_task.api_helper import (
     check_arguments_for_rescoring,
@@ -507,11 +507,6 @@ def regenerate_certificates(request, course_key, statuses_to_regenerate):
     task_type = 'regenerate_certificates_all_student'
     task_input = {}
 
-    # Update task_input for verified users with audit passing and not passing certificate statuses.
-    if 'verified_users_with_audit_certs' in statuses_to_regenerate:
-        task_input.update({"student_set": 'verified_users_with_audit_certs'})
-        statuses_to_regenerate = [CertificateStatuses.audit_passing, CertificateStatuses.audit_notpassing]
-
     task_input.update({"statuses_to_regenerate": statuses_to_regenerate})
     task_class = generate_certificates
     task_key = ""
diff --git a/lms/djangoapps/instructor_task/tasks_helper.py b/lms/djangoapps/instructor_task/tasks_helper.py
index ea3102e70e..bd05443d01 100644
--- a/lms/djangoapps/instructor_task/tasks_helper.py
+++ b/lms/djangoapps/instructor_task/tasks_helper.py
@@ -1429,10 +1429,6 @@ def generate_students_certificates(
         specific_student_id = task_input.get('specific_student_id')
         students_to_generate_certs_for = students_to_generate_certs_for.filter(id=specific_student_id)
 
-    # Verified users with audit passing and not passing certificate statuses.
-    elif student_set == "verified_users_with_audit_certs":
-        students_to_generate_certs_for = CourseEnrollment.objects.users_enrolled_in(course_id, mode='verified')
-
     task_progress = TaskProgress(action_name, students_to_generate_certs_for.count(), start_time)
 
     current_step = {'step': 'Calculating students already have certificates'}
diff --git a/lms/templates/instructor/instructor_dashboard_2/certificates.html b/lms/templates/instructor/instructor_dashboard_2/certificates.html
index e4efe57662..ce9e955289 100644
--- a/lms/templates/instructor/instructor_dashboard_2/certificates.html
+++ b/lms/templates/instructor/instructor_dashboard_2/certificates.html
@@ -130,8 +130,14 @@ from openedx.core.djangolib.js_utils import dump_js_escaped_json, js_escaped_str
                 </div>
                 <div>
                     <label>
-                        <input id="certificate_status_verified_users_with_audit_certs}" type="checkbox" name="certificate_statuses" value="verified_users_with_audit_certs">
-                        ${_("Regenerate for verified learners with audit certificates. ({count})").format(count=section_data['verified_users_with_audit_certs'])}
+                        <input id="certificate_status_${section_data['status'].audit_passing}" type="checkbox" name="certificate_statuses" value="${section_data['status'].audit_passing}">
+                        ${_("Regenerate for learners with audit passing state. ({count})").format(count=section_data['certificate_statuses_with_count'].get(section_data['status'].audit_passing, 0))}
+                    </label>
+                </div>
+                <div>
+                    <label>
+                        <input id="certificate_status_${section_data['status'].audit_notpassing}" type="checkbox" name="certificate_statuses" value="${section_data['status'].audit_notpassing}">
+                        ${_("Regenerate for learners with audit not passing state. ({count})").format(count=section_data['certificate_statuses_with_count'].get(section_data['status'].audit_notpassing, 0))}
                     </label>
                 </div>
                 <div>