ACCA Strategic Professional · Advanced Audit and Assurance (International) · The audit of performance information (pre-determined objectives) in the public sector
An auditor is completing the audit of a public agency's performance report. Of the 12 reported indicators, three are not well defined, so results cannot be measured consistently. Evidence on two further indicators was destroyed in a flood, and the auditor could not obtain alternative evidence; these two relate to the agency's largest programme. The other seven are supported. The auditor judges the unsupported matters to be material but not pervasive. Which form of conclusion is most appropriate?
A qualified conclusion is appropriate. The poorly defined indicators and the missing evidence are material but not pervasive, because seven indicators are supported. The basis paragraph should describe both issues. An adverse conclusion or disclaimer needs pervasiveness, and an emphasis of matter cannot cure material limitations.
- AAn unmodified conclusion with an emphasis of matter paragraph on the flood
- BA qualified conclusion, with the basis describing the poorly defined indicators and the lack of evidenceCorrect
- CAn adverse conclusion on the whole report
- DA disclaimer of conclusion on the whole report
Explanation
Material but not pervasive matters, including inability to obtain evidence and unreliable indicators, lead to a qualified conclusion ('except for'). Adverse or disclaimer require pervasiveness, and seven indicators are supported. An emphasis of matter cannot replace modification when matters are material.
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