Skip to content

ACCA Strategic Professional · Advanced Audit and Assurance (International) · The audit of performance information (pre-determined objectives) in the public sector

An auditor is testing the reported indicator 'number of households connected to clean water' for a municipal utility. Which procedure provides the most reliable evidence of the existence of the reported connections?

Physically verifying a sample of reported household connections and agreeing them to installation records is most reliable. It gives direct, auditor-obtained evidence that the connections exist. Board minutes, internal management reports and annual report narrative are internally generated and do not independently confirm actual service delivery.

  1. AReading the minutes of the utility's board meeting that approved the target
  2. BInspecting the utility's internal monthly management report
  3. CObtaining the utility's annual report narrative on service delivery
  4. DPhysically verifying a sample of reported connections at household addresses and agreeing them to installation recordsCorrect

Explanation

Evidence obtained directly by the auditor through inspection or observation is more reliable than internally generated documents. Visiting a sample of addresses and agreeing to installation records tests existence directly. Board minutes, management reports and narrative are internal and do not verify actual connections.

Did you get it right without looking?

One question tells you little. A timed set on The audit of performance information (pre-determined objectives) in the public sector shows your real accuracy, how long you take and where you lose marks.

Practise The audit of performance information (pre-determined objectives) in the public sectorFree diagnostic mock

More The audit of performance information (pre-determined objectives) in the public sector questions