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

The audit office of a national government is auditing the annual performance report of a public health agency. The agency's published objective was to reduce average outpatient waiting time to 20 days by year end. The auditor is asked what the main purpose of an audit of performance information against pre-determined objectives is. Which statement best describes it?

The audit concludes whether the reported performance information is useful and reliable when measured against the objectives the entity set in advance. It does not audit the financial statements, set strategy, or decide rewards. The auditor tests that targets are well defined and that reported results are accurate and verifiable.

ATo conclude whether the reported performance information is useful and reliable in relation to the objectives the entity set in advanceCorrect
BTo determine whether the agency's chief executive should receive a performance bonus
CTo re-perform the agency's strategic planning and set more challenging targets
DTo confirm that the agency's financial statements are free from material misstatement

Explanation

The engagement tests reported results against objectives set beforehand, looking at whether the information is well defined, verifiable, relevant and reliable. It is not an audit of the financial statements, not a strategic planning exercise, and not a basis for deciding bonuses.

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