ACCA Strategic Professional · Advanced Audit and Assurance (International) · Specific assignments

A government audit office is conducting a value for money audit of a state hospital's procurement of medical equipment. The auditor finds the equipment was bought at the lowest price available but sits unused in storage because staff were not trained to use it. Which value for money element is most clearly failed?

Effectiveness is most clearly failed, because the equipment was cheap but sits unused and so did not achieve the intended outcome of improving patient care. Economy was met by buying at the lowest price, while effectiveness measures whether objectives were actually achieved.

1. AEconomy only, because the price was too low
2. BEffectiveness, because the purchase did not achieve the intended outcome of improved patient careCorrect
3. CCompliance, because lowest-price purchasing is always unlawful
4. DEfficiency only, because inputs were minimised relative to outputs