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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 testing a municipal housing department's reported result: 'Of 800 households that applied, 640 received serviced plots, an 80% delivery rate against a target of 75%'. The department's records show 640 plots allocated, but only 520 have water and electricity connections confirmed by the utility. Which conclusion should the auditor reach on this indicator?

The reported 80% result is misstated and a reliability finding should be reported. The indicator relates to serviced plots, and only 520 of 800 households, or 65%, were confirmed as serviced. That is below the 75% target, so the reported achievement is not supported by evidence matching the indicator.

  1. AThe reported result is reliable because the target of 75% was exceeded
  2. BThe reported result is materially misstated against the indicator definition, and a finding on reliability should be reportedCorrect
  3. CThe result should be ignored because performance indicators cannot be audited
  4. DOnly the target should be criticised, since the achievement figure is supported by allocation records

Explanation

The indicator is 'serviced' plots, so the supported result is 520/800 = 65%, below the 75% target, not 80%. Allocation records support a different measure. Exceeding the target is irrelevant when the reported figure is not supported by evidence consistent with the indicator definition.

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