Understanding the Audit Expectation Gap : A Theoretical and Practical Perspective

Authors

  • Dr. Sanjeev Pal Singh  Associate Professor, Faculty of Commerce, R.B.S. College, Agra

Keywords:

Auditor, Audit Expectation Gap, Society, Firm.

Abstract

Audit expectation gap meaning the difference between what the public expect auditors to do, and what auditors believe they are required to do, has become a major issue in the auditing profession. This gap is however compounded in circumstances where organisations are involved in financial scandals from which key players like Enron, WorldCom, Cadbury Nigeria Plc, and African Petroleum Plc are not exceptional whereby public trust in financial reporting and auditing credibility is affected. These scandals usually reveal massive fraud and management manipulation of financial information, and although, auditors are key company personnel involved in these schemes, they usually fail to act as the watchdog that they are expected to be. This paper aims to review the origin of the audit expectation gap, especially the potential effect on the auditing profession and financial statement users as well as economic uniformity. The paper aims at exploring the social misconceptions about the auditors and their work especially in the area of fraud detection Together, the paper reviews the auditing profession maintaining that it central tenet is the recognition of management’s overall responsibility for corporate reporting. Analysing how that gap erodes confidence in the auditing profession especially at the backdrop and aftermath of global and regional financial meltdowns is the study’s next level. Through literature review and examination of practices in the accounting field, the study establishes problems and possibility of the expectation gap by workers, partiality and independency of auditors and unreasonable demand of the public in financial reports. Thus, the research increases the need to reconsider the roles of auditors, increase public awareness, and ensure that society expectations match the auditors’ capacity. These problems can be solved by means of changing the legislation, enhancing the cooperation between auditors and clients, and launching the campaigns that will help to reestablish the public confidence to the auditors and to protect the credibility of printed reports.

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International Journal of Scientific Research in Science and Technology

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Published

2018-02-28

Issue

Volume 4, Issue 2, January-February-2018

Section

Research Articles

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[1]
Dr. Sanjeev Pal Singh "Understanding the Audit Expectation Gap : A Theoretical and Practical Perspective" International Journal of Scientific Research in Science and Technology(IJSRST), Online ISSN : 2395-602X, Print ISSN : 2395-6011,Volume 4, Issue 2, pp.2364-2380, January-February-2018.