ACCA Audit and Assurance (F8) Practice Exam

Which of the following is NOT one of the Three E's used to assess Value for Money?

1. Efficiency

2. Effectiveness

3. Equity

4. Economy

The correct answer is: Equity

The Three E's used to assess Value for Money are Efficiency, Effectiveness, and Economy. Each of these components plays a critical role in evaluating the value derived from public spending and resource allocation. Efficiency refers to the optimal use of resources to achieve the desired outcomes, ensuring that inputs are minimized while maximizing outputs. Effectiveness measures whether the intended objectives are being met and if the desired impact is achieved. Economy relates to acquiring the necessary resources at the lowest cost possible without compromising quality. Equity, while an important concept in public administration and policy, does not fall within the framework of the Three E's for assessing Value for Money. Equity focuses on fairness and justice in the distribution of resources and benefits across different segments of the population. Therefore, it is not considered one of the key components when evaluating the overall value and efficiency of public services or expenditure, positioning it outside the defining criteria for Value for Money assessments.