ACCA Advanced Audit and Assurance (AAA) Practice Exam

Which term describes obtaining high-quality resources at the lowest possible cost?

1. Efficiency

2. Effectiveness

3. Economy

4. Compliance

The correct answer is: Economy

The term that describes obtaining high-quality resources at the lowest possible cost is "Economy." This concept focuses on the principle of acquiring goods or services efficiently while maintaining quality standards. It emphasizes the importance of cost-effectiveness, ensuring that expenditures align with the necessary quality without overspending. An economy in procurement not only seeks to minimize costs but also ensures that the resources obtained are of the necessary standard and reliability. This balance reflects a sound financial strategy that organizations strive to achieve as they manage their resources. The other options, while related to resource management, focus on different aspects. Efficiency refers to doing things right with minimal waste, which may not always guarantee the lowest cost. Effectiveness relates to achieving desired outcomes and goals, which does not necessarily imply minimizing costs. Compliance is about adhering to laws and regulations, and it doesn't directly relate to cost management and resource acquisition.