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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 auditor is engaged to provide reasonable assurance on a national education department's performance report. The department's legislation requires only that it 'report on performance'. The department proposes to use criteria it has developed internally, which are not published and are known only to its staff. Which action is MOST appropriate for the auditor?

The auditor should assess whether the department's criteria are suitable and ensure they are available to intended users, for example by describing them in the report. Accepting them unquestioned, replacing them with the auditor's own, or disclaiming immediately is not the correct response.

  1. AAccept the criteria because management developed them and is responsible for the report
  2. BDetermine whether the criteria are suitable and available to intended users; if they are not made available, the auditor should ensure users are told how the criteria can be accessed or have them described in the reportCorrect
  3. CUse the auditor's own preferred criteria and ignore the department's criteria
  4. DIssue a disclaimer of opinion immediately because criteria were not established by law

Explanation

Criteria must be suitable and available to intended users, either publicly, by inclusion in the report, or in the assurance report itself. Internal criteria are not automatically unsuitable, so rejecting them outright or disclaiming is premature, and the auditor cannot simply substitute their own criteria.

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