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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 of a state transport authority is performing a value-for-money (performance) audit focusing on a bus procurement programme. The auditor examines whether buses of the required specification were acquired at the lowest cost for the quality needed, and then whether the buses achieved the intended passenger-capacity outcomes. Which pairing of terms correctly describes these two examinations?

Economy, then effectiveness. Obtaining buses of the required quality at the lowest cost is economy, while checking whether they delivered the intended passenger-capacity outcomes is effectiveness. Efficiency would instead compare outputs achieved with resources used, which is not what either test described.

  1. AEconomy, then effectivenessCorrect
  2. BEfficiency, then economy
  3. CEffectiveness, then equity
  4. DEconomy, then ethics

Explanation

Economy concerns acquiring inputs of appropriate quality at the lowest cost. Effectiveness concerns whether intended outcomes or objectives were achieved. Efficiency would relate outputs to inputs, which is neither of the stated tests, and equity and ethics are not the matching terms here.

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