Which audit type assesses efficiency, economy, and effectiveness of operations?

Which audit type assesses efficiency, economy, and effectiveness of operations?

• A. Compliance testing
• B. System-based audits
• C. Social & environmental audits
• D. Value for money audits

Answer: (D)

Value for money auditing looks at whether resources are used in a way that delivers the intended results at the lowest possible cost. The key idea is to assess three linked dimensions: economy (getting inputs at the best price and quality), efficiency (getting as much output as possible from given inputs), and effectiveness (achieving the desired objectives). When an audit is described as assessing efficiency, economy, and effectiveness of operations, it is evaluating value for money. For example, it would examine procurement, processes, and performance to see if costs are controlled, outputs are maximized, and the program goals are actually met. Other audit types focus on different aims: compliance testing checks adherence to rules, system-based audits examine the design and operation of internal controls, and social and environmental audits look at impact in those areas. None of these systematically cover all three VFM dimensions as a value-for-money assessment does.

Value for money auditing looks at whether resources are used in a way that delivers the intended results at the lowest possible cost. The key idea is to assess three linked dimensions: economy (getting inputs at the best price and quality), efficiency (getting as much output as possible from given inputs), and effectiveness (achieving the desired objectives). When an audit is described as assessing efficiency, economy, and effectiveness of operations, it is evaluating value for money. For example, it would examine procurement, processes, and performance to see if costs are controlled, outputs are maximized, and the program goals are actually met. Other audit types focus on different aims: compliance testing checks adherence to rules, system-based audits examine the design and operation of internal controls, and social and environmental audits look at impact in those areas. None of these systematically cover all three VFM dimensions as a value-for-money assessment does.