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ACCA Strategic Professional · Advanced Audit and Assurance (International) · The audit of performance information (pre-determined objectives) in the public sector

A public sector audit team is evaluating whether a municipality's reported indicator 'percentage of households with access to clean water' is reliable. Management says the indicator was measured using a household survey. Which procedure would BEST address whether the reported result is reliable?

The best procedure is to inspect the survey methodology, sample selection and source records, and re-perform the percentage calculation on a test basis. This tests whether the reported figure is accurate and supported by sound data, unlike representations, plan agreement or simple year-on-year comparisons.

  1. AInspecting the survey methodology, sample selection and source records, and re-performing the calculation of the percentage on a test basisCorrect
  2. BConfirming that the indicator appears in the approved annual performance plan
  3. CObtaining a written representation from the municipal manager that the figure is accurate
  4. DComparing the indicator to the prior year's figure to see whether it has increased

Explanation

Reliability concerns whether the reported figure can be supported by accurate, complete source data and a sound method. Inspecting methodology and records and re-performing the calculation tests this directly. The other options address whether the indicator was planned, rely on management assertion, or are only a weak analytical comparison.

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