AUDIT EXPECTATION GAP The phrase “Audit Expectations Gap” was first introduced into the literature over thirty five years ago, by Liggio (1974), under the Cohen Commission. It 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 describe the situation whereby a difference in expectation exists between a group with a certain expertise, and another group, which relies upon that expertise.
Writing a Similar Assignment?
Get a Scholar-Written Paper Matched to Your Brief
Every order is handled by a degree-holding expert in your subject — written to your exact rubric, fully original, and delivered ahead of your deadline.
Start My OrderThe public perception of an auditor’s responsibility differs from that of the profession and this difference is referred to as the Expectation Gap. Furthermore, the expectations gap has been recognised by the auditing profession as an issue of fundamental importance. The Commission on Auditors’ Responsibilities (AICPA, 1978) was established to investigate the existence of such a gap; and concluded: “… after considerable study of available evidence and its own researchsuch a gap does exist” (p.
Stuck on Your Assignment?
Cola Papers Experts Are Ready Right Now
Join thousands of students who submit confidently. Human-written, plagiarism-checked, and formatted to your institution's exact standards.
ii). Many users misunderstand the nature of the attest function, especially in the context of an unqualified opinion. Some users believe that an unqualified opinion means that the entity has foolproof financial reporting. Some feel that the auditor should not only provide an audit opinion, but must also interpret the financial statements in such a manner that the user could evaluate whether to invest in the entity.
There are also users who expect auditors to perform some of the audit procedures while performing the attest function like penetrating into company affairs, engaging in management surveillance and detecting illegal acts and/or fraud on the part of management. It is these high expectations on the part of users of financial statements that create a gap between auditors’ and users’ expectations of the audit function. In addition, the users also place the responsibility for narrowing the gap on auditors and others involved in preparing and presenting financial statements.
Our Key Guarantees
- ✓ 100% Plagiarism-Free
- ✓ On-Time Delivery
- ✓ Student-Friendly Pricing
- ✓ Human-Written Papers
- ✓ Free Revisions (14 days)
- ✓ 24/7 Live Support