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
Without the support and approval of society, police officials can rarely meet the demand of their job (Argosy University,
A financial audit is an independent, objective evaluation of an organization 's financial reports and financial reporting processes. The primary purpose for financial audits is to give stakeholders reasonable assurance that financial statements are accurate and complete. Most internal audits are not adding value. One reason is that “ongoing compliance burdens and pressure to do more with less” is contributing to the decline in perceived internal audit value.
I can simply answer because I want to be a hero. In my opinion, an auditor is a dark knight that saves the world secretly and silently. An auditor has to commit to do his job professionally as well as ethically. As a matter of fact, there have been many corporate and accounting frauds, such as the WorldCom scandal in 2002 and the Madoff Ponzi scheme in 2008,
A police officer is an employee of the government who has been given the duty to enforce the law by maintaining order and arresting lawbreakers. If I were to go into law enforcement then I would like to be the Social Agent, since the major duty of the police is to serve and protect the public; hence, I would be willing to combine with other typologies (Patterson, 2014). Actually, it is useful to have these typologies, as it will ensure that the public and the police officers get to understand that police officers can be different but their main aim is to serve the same purpose. The following are the reason why I feel it is good to have the typologies Typologies will enable me to create a good relationship to all people that includes both the
According to Tyler, police legitimacy refers to the public's perception
All these reasons point to a greater establishment of trust between the police and
If the police are trusted, they’ll naturally gain authority; if not, they won’t. I agree with this statement because it is true. As humans, we naturally give authoritative power to people who we trust and have respect
If society makes cops more aware of the crime, and calls in when a crime occurs then cops will be able to stop the criminal. Throughout the book Peter Moskos explained his experience going through police academy. He then started his job as a cop for the first time. He was thrown into several
During the 1960’s Stanley Milgram conducted a series of experiments to test how a person reacts to authority. He started these tests in response to World War Two and the reports of the German soldiers who claimed they were “just following orders’ when asked about
Clients must keep records and books of accounts including cash book, sales ledger, purchases ledger and general ledger. Supporting documents such as invoices, bank statements, pay-in slips, cheque butts, and receipts for payments, payroll records and copies of receipts issued should be retained. A valuation of the stock in trade should be made at the end of the accounting period and the appropriate records maintained. Company should record sufficient to explain each transaction and to enable a true and fair profit & loss account and balance sheet to be prepared. At the end of the accounting period, a physical stock-take should be made to ascertain the quantity and the cost of the stock in hand or the cost of work in progress statements and
59). One of the strengths of the theory is that it seeks to create a sense of order within communities to show the citizens that the police actually cares about what is going on within their communities, which will make the citizens feel safer within their own communities and deter crime (Kelling, 2015, pg. 58). Order can raise the quality of life for the citizens and it can also attract new businesses to come to the community, which will bring new job opportunities for the citizens. One of the disadvantages of the theory is that it is often misunderstood by police departments, which will produce negative outcomes (Kelling, 2015, pg. 58).
What this theory engages with is the assumption that the engagement of behavior begins after the observation of similar behaviors in others. (Wong,
However, the corporate collapse of HIH Insurance in Australia has raised more questions than answers regarding the integrity of the accounting and auditing profession. The audit expectation gap is the difference between the actual performance of an auditor and what society thinks. According to the American Institute of Certified Public Accountants in 1992, the expectation gap is defined as the difference between what the public and financial users think audit responsibility is and what the auditors think their role is(?). The importance of professional scepticism is essential in enhancing the societal view on auditors. An auditor supplies the independence and objectivity to a financial report complementing the high expectations of third party users
Professional skepticism depends on the personal behavioral actions. The need for professional skepticism in an audit cannot be overemphasized. Professional skepticism is an essential part of the auditor 's skill and is very closely interrelated to the concept of auditor independences and professional judgement and contributes to audit quality. In addition to professional skepticism is important and required throughout the audit in engagement acceptances, identifying and assessing risks of material misstatement, designing the nature, timing and extent of further audit procedures that are responsive to assessed risks of material misstatement, and evaluating audit evidence, and forming an opinion on whether the financial statements are prepared, in all material respects, in accordance with the application financial reporting framework.
These scandals have made the morality of accountants and businesspeople. The main contributors of business ethical standards are the accountants. The accounting profession has a duty to play so as to reduce the corporate scandals. They should make sure that there is proper financial management, quality audit, ethical standards improvement and that the governance regimes are strengthened