Background: Hospital accreditation programs are internationally widespread and consume increasingly scarce health resources. However, we lack tools to consistently identify suitable indicators to assess and monitor accreditation outcomes. We describe the development and validation of such a tool. Results: Using Australian accreditation standards as our reference point we: reviewed the research evidence for potential indicators; looked for links with existing external indicators; and assessed relevant state and federal policies. We allocated provisional scores, on a five point Likert scale, to the five accountability criteria in the tool: research; accuracy; proximity; no adverse effects; and specificity. An expert panel validated the use of the purpose designed indicator assessment tool. The panel identified hand hygiene compliance rates as a suitable process indicator, and hospital acquired Staphylococcus aureus infection (SAB) rates as an outcome indicator, with the hypothesis that improved hand hygiene compliance rates and lower SAB rates would correlate with accreditation performance. Conclusions: This new tool can be used to identify, analyse, and compare accreditation indicators. Using infection control indicators such as hand hygiene compliance and SAB rates to measure accreditation effectiveness has merit, and their efficacy can be determined by comparing accreditation scores with indicator outcomes. To verify the tool as a robust instrument, testing is needed in other health service domains, both in Australia and internationally. This tool provides health policy makers with an important means for assessing the accreditation programs which form a critical part of the national patient safety and quality framework.