Expectation Gap In Accounting

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CHAPTER ONE
1.1 Background of the study
Audit expectation gap can be defined as the distinction between the actual and expected responsiblity of an auditor. According to the American Institute of Certified Public Accountants (AICPA) in 1992, the expectation gap could be defined as "the differentiation between what the public and users of financial statements believe auditors are responsible for and what auditors themselves believe their responsibilities are.
In 1974, Liggio describe the expectation gap as the difference between the real and the expected performance he was the first person to explain what it meant. This explanation was emphasized by the Cohen Commission on auditors’ responsibilities in 1978, where the expectation gap is characterized …show more content…

Research conducted till now on the audit expectations gap specifies that it subsists for numerous reasons. Humphrey et al. (1993) and Porter and Gowthorpe (2004), for instance, have argued that the gap exists due to a deficiency in an auditor’s performance and auditing principles. Pierce and Kilcommins (1996), Boyd et al., (2001) and; McEnroe and Martens (2001), argue that the gap is owed to misapprehensions and misconception of the essence of auditing by the users. These studies suggest that the users do not fully comprehend the purpose of audit and the duties auditors are supposed to play. Thus, they have impracticable expectations of auditors. Previous, study by the Canadian Institute of Chartered Accountants (CICA, 1988) and Porter (1993) recognized the inadequate performance, incomplete principles and unreasonable expectations as the components of the audit expectations gap. Nonetheless, a latter empirical research performed by Porter and Gowthorpe (2004) has demonstrated that segments have transformed over time though the mindset of pessimism as to the audit functions has not been dispensed …show more content…

This is still a debatable issue because such standards may not suit to the desiderata of developing countries. Furthermore, the possibility of fraud, graft and economic malfeasance are high in the public sector in developing countries (Kaufmann, 1997; Gray and Kaufmann, 1998; Sandholtz and Koetzle, 2000). In this deference, it’s possible to argue that there could be more insistence from the intrigued parties, such as global financing agencies and politicians, on auditors to perform the roles which may be outside the scope of the audit jurisdiction.
Though audit expectation gap has been empirically established to exist in Ghana (Onumah et al., 2009; Agyei et al., 2013) just like other studies elsewhere, it appears no Ghanaian study (based on information available to the researcher) has been able to investigate the audit expectation gap among public universities in Ghana. Therefore, the objective of this study is to contribute to this call by being one of the few that have taken that audacious step in filling this

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