Audit Expectation Gap In Auditing

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It is claimed by Sikka et al (1998) that audit expectation gap is harmful for the auditing profession as “the greater the gap of expectations, the lower is the credibility, earning potential and prestige associated with the auditor’s work”. They further argued that expectation gap should be eliminated because economic stability depends on confidence in the process of accountability. Power (1993, p.292) asserted in her paper that auditors are not solely responsible for this existing audit crisis. SMEs have certain common beliefs. They expect and demand unreasonably and unjustified services from auditors. Almer and Brody (2002) affirmed that a business failure is always associated with an auditor’s failure; in spite of the fact, he takes all appropriate measures. He additionally added that one of the possible causes of the expectation gap is the auditor’s ambiguous communication with customers. They argued further that an auditor can carry out his audits in accordance with the generally accepted auditing standards and still be found negligent in not preventing risks to financial statement users. However…show more content…
Prior researchers like Porter 1993; Humphrey, 1997 and Lee et al, 2009 have conducted extensive research in this area. They have discussed the variances between the auditor’s perception of what functions the auditor should play in the financial reporting process, and the society’s perception of the responsibilities society unreasonably expects from auditors to perform. In the same vein, Hian and Woo (1998) defines the concept in a very simple way that there is a gap between what the public expects and what they actually get and it is known as the “audit expectation gap”. Theoretical Framework: Still working on this part and try to find appropriate theory Agency theory Lending credibility theory Theory is inspired confidence Policeman

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