ACCA Advanced Audit and Assurance (AAA) Practice Exam

In what context are economy, efficiency, and effectiveness often evaluated?

1. In the assessment of organizational culture

2. When analyzing marketing strategies

3. During the audit of activities and processes

4. In employee performance reviews

The correct answer is: During the audit of activities and processes

The evaluation of economy, efficiency, and effectiveness is primarily associated with the audit of activities and processes. These three dimensions serve as key criteria for assessing how well an organization utilizes its resources and achieves its objectives. In the context of audits, economy refers to the cost-effective acquisition of resources while efficiency measures how well resources are transformed into outputs. Effectiveness, on the other hand, evaluates whether the outputs are aligned with the intended outcomes or objectives. Auditors analyze these factors to determine whether the organization is performing optimally and achieving its goals in a way that is both cost-effective and productive. While organizational culture, marketing strategies, and employee performance reviews may involve aspects of performance and resource use, they do not focus specifically on the rigorous evaluation of processes and activities in the way that audits do. Thus, the context of the audit is where the concepts of economy, efficiency, and effectiveness are most critically assessed.