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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 the performance information of a government health agency against its pre-determined objectives. One objective is to 'reduce average outpatient waiting time to 30 minutes'. Which of the following is the most appropriate first step in assessing whether the reported indicator for this objective can be audited?

The auditor should first test whether the objective and indicator are specific, measurable and clearly defined, with a documented calculation method. Without suitable criteria, reported performance cannot be verified. Budget variances, supplier terms or website publication do not establish whether the indicator itself is auditable.

  1. ATest whether the objective and its indicator are well defined, specific and measurable, with clear criteria for how the result is calculatedCorrect
  2. BRecalculate the agency's total budget variance for the year
  3. CInterview the agency's external suppliers about their payment terms
  4. DConfirm that the agency has published its annual report on its website

Explanation

Performance information can only be audited against suitable criteria. The auditor therefore first considers whether the objective and indicator are clearly defined and measurable, and how the reported result is derived. The other options relate to financial or administrative matters, not the usefulness and verifiability of the indicator.

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