Function of ACT

ACT, Inc. says that the ACT assessment measures high school students' general educational development and their capability to complete college-level work with the multiple choice tests covering four skill areas: English, mathematics, reading, and science. The optional Writing Test measures skill in planning and writing a short essay. Specifically, ACT states that its scores provide an indicator of "college readiness", and that scores in each of the subtests correspond to skills in entry-level college courses in English, algebra, social science, humanities, and biology.
To develop the test, ACT incorporates the objectives for instruction for middle and high schools throughout the United States, reviews approved textbooks for subjects taught in Grades 7–12, and surveys educators on which knowledge skills are relevant to success in postsecondary education. ACT publishes a technical manual that summarizes studies conducted of its validity in predicting freshman GPA, equating different high school GPAs, and measuring educational achievement.
Colleges use the ACT and the SAT Reasoning Test because there are substantial differences in funding, curricula, grading, and difficulty among U.S. secondary schools due to American federalism, local control, and the prevalence of private, distance, home schooled students and, most importantly, lack of rigorous college entrance examination system like those used in other countries. ACT/SAT scores are used to supplement the secondary school record and help admission officers put local data—such as course work, grades, and class rank—in a national perspective.
Most colleges use ACT scores as only one factor in their admission process. A sampling of ACT admissions scores shows that the 75th percentile composite score was 24.1 at public four year institutions and 25.3 at private four year institutions. It is recommended that students check with their prospective institutions directly to understand ACT admissions requirements.
In addition, some states have used the ACT to assess the performance of schools, and require all high school students to take the ACT, regardless of whether they are college bound. Colorado and Illinois have incorporated the ACT as part of their mandatory testing program since 2001. Michigan has required the ACT since 2007, Kentucky and Tennessee require all high school juniors to take the ACT and Wyoming requires all high school juniors to take either the ACT or the ACT WorkKeys.
While the exact manner in which ACT scores will help to determine admission of a student at American institutions of higher learning is generally a matter decided by the individual institution, some foreign countries have made ACT (and SAT) scores a legal criterion in deciding whether holders of American high school diplomas will be admitted at their public universities.