Audit expectations gap

Although its about expectations but still its scope and meanings have been defined in number of ways. Difference in expectation can arise on the performance i. Expectation gap can also be explained as the difference between the effectiveness of audit engagement what users believe and what auditor believes. Expectation gap in related to audit can also be explained as the difference between expectation of user and auditor himself on the responsibilities of the auditor.

Audit expectations gap

According to the the American Institute of Certified Public Accountants AICPA inthe expectation gap could be defined as "the difference between what the public and financial statement users believe auditors are responsible for and what auditors themselves believe their responsibilities are.

History InLiggio is the first to define the expectation gap as the difference between the actual and the expected performance. This definition is extended by the Cohen Commission on auditors responsibilities inwhere the expectation gap is represented by the gap between the public expectations and needs, and the expected accomplishment of the auditors.

Porter in defined the 'expectation-performance gap' as the gap between the expectations of society about auditors and the performance of auditors.

Gaps Related to the Audit Process and Results

Example Regulators and standard setters usually propose a change in regulation following a particular event. Recently, the financial crisis was the trigger for regulators and standard setters to revisit the audit report e.

Audit expectations gap

While narrowing the audit expectation gap has been the main objective of previous changes to the audit report e.The audit expectations gap can only be reduced if auditors can react to the business needs at a faster rate than before. But with the strategies I have discussed above, such as the proactive audit education schemes – I believe that the gaps can be reduced if the appropriate strategies are undertaken, and these will help to provide a ‘one.

2 the audit expectation gap does not result from the public expectation of the auditor to perform the duties and responsibilities; therefore, the auditor should not reasonably be expected to .

AUDITS get noticed only when things go wrong. Last week British MPs issued a scathing attack on KPMG, an auditor, for failing to avert the collapse of Carillion, a contracting company. South African authorities are looking into Deloitte’s audit of Steinhoff, a retailer.

Audit Expectation Gap Definition from Financial Times Lexicon

Feb 14,  · Audit independence The auditing expectation gap refers to the difference between what the public and other financial statement users perceive auditors’ responsibilities to be and what auditors believe their responsibilities entail. This paper focuses on . AUDIT EXPECTATION GAP The phrase "Audit Expectations Gap" was first introduced into the literature over thirty five years ago, by Liggio (), under the Cohen was defined as the difference between the levels of expected performance "as envisioned by the independent accountant and by the user of financial statements" The term ‘expectation gap’ is commonly utilized to.

Audit expectations gap

Ojo () defined the audit expectation gap as "the difference between what users of financial statements, the general public perceive an audit to be and what the audit profession claim is.

Audit Expectations Gap: A Framework for Regulatory Analysis