Why Should the Public Sector Performance Auditor Be Concerned with Avoiding

question 3

Multiple Choice

Why should the public sector performance auditor be concerned with avoiding commenting on government policy?

• A)Any comment will undermine the public's confidence in the government of the day.
• B)Government policy does not affect the performance of the entity.
• C)The merits of government policy are matters for political debate and for decision by the executive government.
• D)A risk may arise in that the official opposition may use the audit report to criticise the government.

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Definitions:

Excess Capacity

The ability of a company to produce more goods or services than currently needed, exceeding the current demand.

Profit-Maximizing

The act or process of adjusting production and operational strategies to achieve the highest possible profit margins for a business.

ATC Curve

A graphical representation of a firm's average total costs over a range of output levels, typically U-shaped due to economies and diseconomies of scale.

Oligopoly

A market structure characterized by a small number of firms whose actions significantly affect each other.