ACCA Strategic Professional · Advanced Audit and Assurance (International) · The audit of performance information (pre-determined objectives) in the public sector
An auditor has concluded that, for one of the agency's six material objectives, the reported achievement of 'training 5,000 teachers' is overstated because only 3,800 attendance records exist. The remaining five objectives are fairly reported. The auditor is reporting on performance information in a separate section of the audit report. Which approach is most appropriate?
The auditor should report a finding in the performance information section, identifying the specific objective, the reliability issue and the size of the overstatement, here 1,200 of 5,000 teachers unsupported. Fair reporting on other objectives does not cure it, and the financial statements opinion is not automatically modified.
- AIssue no finding, as five of six objectives are fairly reported
- BInclude a finding in the performance information section identifying the objective and the reliability problem, with the extent of the misstatementCorrect
- CWithdraw from the engagement because the agency has misreported
- DQualify the opinion on the financial statements automatically
Explanation
Material findings on performance information are reported in a dedicated section identifying the objective and the problem, here an overstatement of 1,200 teachers (24%) against records. Passing on the basis of five of six objectives would ignore a material misstatement. The financial statements opinion is separate and is not automatically affected.
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