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ACCA Strategic Professional · Strategic Business Leader · Audit and compliance

Medira Hospital Trust, a public body, asks its internal auditors to assess whether a newly purchased scanning system was bought economically, is being used efficiently and has achieved the clinical outcomes that were promised in the business case. Which approach best describes the assignment and what it requires of the auditors?

It is a value for money audit. The auditors assess economy of the purchase, efficiency of the scanner's use and effectiveness in achieving the promised clinical outcomes. A compliance audit would only check procedures were followed, and nothing in the scenario suggests fraud or a request for a true and fair opinion.

  1. AA value for money audit, assessing the three Es of economy, efficiency and effectivenessCorrect
  2. BA fraud audit, searching for evidence of collusion between the purchasing officer and the supplier
  3. CA statutory audit, giving an opinion on whether the accounts show a true and fair view
  4. DA compliance audit, testing only whether purchasing procedures were followed

Explanation

Value for money auditing tests economy (cost of inputs), efficiency (outputs relative to inputs) and effectiveness (achievement of objectives). The scenario covers purchase cost, usage and outcomes, which map to those three Es. A compliance audit would only test adherence to procedures, which is narrower than the scenario.

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