ACCA Advanced Audit and Assurance (AAA) Practice Exam

Which audit type requires local authorities to publish annual performance plans?

1. Value for money audits

2. Best value audits

3. Financial audits

4. Fraud investigations

The correct answer is: Best value audits

The requirement for local authorities to publish annual performance plans aligns with the concept of best value audits. Best value audits are designed to assess how well local authorities are providing services to the public. The focus is not just on financial performance but also on the quality and efficiency of the services delivered. This type of audit encourages transparency and accountability, requiring local authorities to demonstrate their commitment to continuous improvement and value for money in the services they provide. Annual performance plans help communicate the strategic goals, expected outcomes, and performance measures that local authorities aim to achieve, which is essential for stakeholders who are interested in both financial and non-financial performance. By mandating these plans, best value audits ensure that authorities are held accountable for their performance and are making informed decisions that benefit their communities. Other types of audits, such as financial audits, primarily focus on the accuracy of financial statements, and while value for money audits assess the efficiency and effectiveness of resource use, they may not specifically require the publication of performance plans in the same way that best value audits do. Fraud investigations are concerned with detecting and preventing fraudulent activities rather than evaluating performance in delivering public services.