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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 supreme audit institution is auditing a ministry's performance report. One objective is stated as 'improve educational outcomes significantly'. There is no baseline, target or defined indicator. The ministry reports a pass rate of 74%. Which is the most appropriate conclusion by the auditor?

The objective lacks specificity, a baseline and a target, so the information fails the usefulness criteria even if the 74% figure is accurate. The auditor should report this deficiency rather than redefine the objective, since setting objectives is management's responsibility, and an accurate figure does not cure it.

  1. AThe reported 74% is reliable if the examination board's data agrees, so no further comment is needed
  2. BThe auditor should refuse to accept the engagement because any objective that is vague makes the audit impossible
  3. CThe auditor should redefine the objective with SMART criteria and report against the revised version
  4. DThe objective is not specific or measurable, so the performance information fails the usefulness criteria, and this should be reported even if the 74% figure is accurateCorrect

Explanation

Usefulness requires objectives and indicators that are specific, measurable and time-bound so that performance can be assessed. Accurate data does not cure an unmeasurable objective. The auditor reports on this deficiency rather than rewriting management's objectives, which would impair independence and exceed the auditor's role, and the audit can still proceed.

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