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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 planning an audit of a housing agency's performance report. The team finds that several reported targets, such as 'improve housing services', have no quantified measure or time frame. How should this affect the engagement planning?

The auditor should assess whether targets are specific, measurable and time-bound, raise deficiencies with management and consider the effect on the reporting conclusion. Vague targets are harder to audit, the auditor cannot remove them unilaterally, and checking only the publication date does not address their usefulness.

  1. AProceed as normal, since vague targets are easier to confirm
  2. BConsider whether the indicators are specific, measurable and time-bound, discuss deficiencies with management, and consider the impact on the auditor's reporting conclusionCorrect
  3. CRemove the vague targets from the report on the auditor's own authority
  4. DAccept the targets and test only whether the report was published on time

Explanation

Targets lacking specificity, measurability or time frames fail suitable criteria tests. The auditor should raise this with management and consider the effect on reporting, such as a finding on usefulness. Vague targets are harder, not easier, to audit. The auditor cannot delete content, and testing publication timing alone does not address the problem.

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