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

An audit team is engaged to report on performance information in the annual report of a national transport agency. The agency has published its pre-determined objective as 'improve rail services'. Its indicator is 'customer satisfaction', with no stated measurement method or target. Which conclusion about the suitability of the criteria is most appropriate?

The criteria are unsuitable because the indicator has no defined measurement method or target. Suitable criteria must be specific, measurable and allow consistent evaluation, and 'customer satisfaction' as stated cannot be consistently measured or assessed against anything, whatever its link to the mandate.

  1. AThe criteria are suitable because the objective is linked to the agency's statutory mandate
  2. BThe criteria are unsuitable because the indicator is not specific or measurable, so the information cannot be consistently evaluatedCorrect
  3. CThe criteria are suitable because customer satisfaction is a widely used indicator in the public sector
  4. DThe criteria are unsuitable only if the agency fails to meet the target

Explanation

Suitable criteria must be relevant, measurable, specific and capable of consistent evaluation. An indicator with no method or target cannot be measured or assessed consistently. Linkage to a mandate or common usage does not cure this, and there is no target to be missed.

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