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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 testing a transport authority's reported indicator 'number of passenger journeys completed'. The figure is generated by an automated ticketing system that the authority recently replaced mid-year. Which response is MOST appropriate?

The auditor should evaluate the data migration and controls over both ticketing systems and perform substantive testing of data for the periods covered by each. A mid-year change creates risks of incomplete or inconsistent data, and neither assumptions about automation nor management representations alone provide sufficient evidence.

  1. ARely on the reported figure because automated systems are inherently free from error
  2. BTest only the second half of the year, since the new system is more accurate
  3. CEvaluate the data migration and the controls over both systems, and perform substantive testing of the data for the periods under each systemCorrect
  4. DAsk management to confirm in writing that both systems were reliable

Explanation

A mid-year system change creates a risk of incomplete or inconsistent data at the changeover. The auditor should test migration and controls and test data from both periods. Assuming automated systems are error-free ignores risk, ignoring the first half leaves part of the indicator untested, and representations alone are not sufficient evidence.

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