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Discussion

Stating the assumptions and the tariff used in an audit matters because

  • A.the savings can otherwise be neither checked nor reproduced
  • B.the Act requires the tariff in use to be published within the report
  • C.the auditor's fee is calculated from the tariff
  • D.the assumptions determine which instruments were used

Answer: A

Correct answer: the savings can otherwise be neither checked nor reproduced

A saving figure is the product of a quantity and a price, both estimated. Unless the operating hours, the load factor, the efficiency assumed and the tariff applied are stated, no reader can tell whether the number is conservative or optimistic, and no one can recompute it when the tariff changes. Stating them is what makes the report auditable rather than merely persuasive.

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