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Audit Expectation Gap

In: Business and Management

Submitted By rivascatherine
Words 2514
Pages 11
Introduction

The audit expectation gap has been in existence for decades; it was first introduced during the early 1970’s. Collective evidence has gradually shown the existence of the expectation gap. Researchers, Salehi, Ali, Kandasamy, Ojo, Epstein, Geiger, Pierce, Kilcommins, Humphrey, Adeyemi, Uadiale, Monroe, Woodcliff, Jennings, Porter, Sikka, Hassas-Yeganeh , Khaleghi, Dixon, Woodhead, Frank, Lowe, and Smith, have continued to investigate the existence of the expectation gap and its complications. The audit expectation gap exists when the public user and auditors have different beliefs about what an auditor’s responsibility should be.
In the past few years, auditors have been unwillingly placed in the spotlight. The expectation gap has affected and deteriorated accountants’ credibility. The reason to this is that public users have expectations from auditors, for example, Salehi says, “the primary responsibility of an auditor is to verify whether the financial statements exhibit a true and fair view of state of affair of the business and their secondary responsibility is the prevention and detection of errors and frauds” (Salehi 2008, p. 65). These expectations by the public users increase the legal liability and credibility facing the audit profession (Ojo, 2006), and lastly, it lowers their earning potrantion and reputation associated with the work of auditors (Lee, Ali & Kandasamy 2008). Yet, the profession have been trying to decrease the disparity (Epstein and Geiger 1994). However, the expectation gap is not something that can be placed on the profession’s shoulders alone (Pierce and Kilcommins 1996), since the nature and roles of the auditors are differently perceived by users.
It is obvious that previous research that have been done on the expectations problem is significant. It is not surprising that it has become significant since the gap

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