Reflection paper on expectations for electronic source. The nature of the audit expectation gap, its existence in. Audit expectation performance gap, auditors, auditees, audit beneficiaries, libya 1. The term expectation gap was first applied to auditing by liggio. Statement of the problem auditors primary duties is to examine the books of. The auditors responsibility relating to fraud in an audit of. The first section outlines the auditing context in malaysia and the research framework of the study.
The expectation gap developed from the differing expectations of the function of independent audit between the auditors and the public. An analysis of press articles on corporate fraud introduction the expectation gap eg was first conceptualized by liggio 1974 and is defined by sikka et al. The concept of the expectations gap was first used by liggio 1974 who defined it as the. The gap between the role of an auditor, as perceived by the auditor, and the expectations of the users of financial statements. The expectation gap in auditing managerial auditing journal 3 1998 147154 conduct of audit work e. The impact of audit education on the audit expectation gap. The auditors responsibility relating to fraud in an audit. Dec, 2016 another audit expectations gap relates to information about the audit information gap. Hypothesiss of the research are 1 there is audit expectation gap between governmental auditor bpk and the user of local. He defines the aeg as the difference between the levels of expected performance as envisioned by users of a financial statement and the independent accountant. The expectation gap in audit is a topic that attracts attention. The current study employed a new approach in the world in order to quantifying the expectation gap. This may give the impression that the expectation gap is a relatively new phenomenon. The american anticorruption institute aaci invited paper presented at the.
Massive global corporate scandals, financial crisis and collapses of large entities have diluted the investors confidence in the worlds capital market the auditing profession has also come under the spotlight, following the melodramatic flop of eminent companies without any prior warning signals and highlighted the miracle phenomena, the audit expectation gap aeg. The persistence of the expectations gap reflects, in part, the fact that public expectations of audit can grow in line with what auditors can accomplish. The main objective of the study is at first identifying the expectation gap about audit responsibility and the second quantifying the expectation gap in iran. The audit expectation gap is generally referred to as the difference between what the public and users of financial statements perceive the role of an audit to be, and what the audit profession claims is expected of them during the performance of an audit ojo, 2006. Generally, the factors that influence the persistence of the audit expectation gap in financial reporting include unreasonable expectations of auditors as perceived by the society. Johansson 2005 equates the existence of the aeg to the period auditing started even though, research in this area started only some fortythree years back with the work of liggio 1974, who established the existence of an expectation gap. Overview of audit expectation gap the issue of audit expectation gap aeg has been very significant to the accounting profession since the mid 1970s and continues to be debated on until today liggio, 1974. Nigerian perspective oseni, abubakar idris 1 ehimi, celestina ojemen2 abstract the audit expectation gap is critical to the auditing profession because the greater the unfulfilled expectation from the public, the lower the credibility earning potential and prestige associated with. The audit expectation gap has been in existence for the past century humphrey et al. The audit expectation gap is a phenomenon that exists for many years. It may be subdivided into a gap in communications and a gap in performance. In the 1970s and 1980s, massive corporate failures resulted in the accounting profession.
Accepted 20 july, 2011 audit expectation gap is not a new phenomenon in. Findings a reasonableness gap was uncovered, there is a gap between the expectation of. An empirical investigation of the audit expectation gap in. He defines expectation gap as the difference between the levels of expected performance as perceived by both users of financial statement and the auditor. It gives the more strength to other researchers in order to measuring audit expectation gap in the world. He defined the audit expectation gap as the difference between. On the other hand, the gap that exists on the publics part is often because of misconstructions. Adoption by gcp inspectors working group for release for. Audit expectation gap between auditors and users of. This study seeks to analyse causes of the gap as well as the impact of proposed changes to the current statutory audit regime using an approach that differs from those used in prior literature. Fraud audit expectation gap in the middle eastern countries. The existence of audit expectation gap in malaysia 91 investment analysts, loan officers and financial journalists confirms the presence of an expectation gap in the uk on the nature of audit functions and perceived performance of. The concept displays a high degree of fluidity in both the academic and professional discourses. It appears that liggio 1974 in lee, ali and gloeck 2009, were the first to apply the term audit expectation gap in the auditing literature.
Audit expectation gap audit expectation gap audit expectation gap introduction theoretically the term audit gap in expectations emerged during the 1970s from a study by liggio 1974, 20 in which he defined gap as the differences between the audit work performed by the auditor and what customers expect users of financial statements from them. Expectation gap abstract this study examines the auditor and the public. The nature of the audit expectation gap, its existence in the. Audit expectation gap is not a new phenomenon in auditing literature. The results show that there is expectation gap between auditors and investors in iran. In accounting literature, the term expectations gap was first noted in 1974 even though the roots of the accounting and auditing professions have been traced back as far ancient egypt and greece. The audit expectation gap is critical to the auditing profession because the greater the unfulfilled expectations from the public, the lower is the credibility, earning potential and prestige associated with the work of auditors.
Theory of assessment and practical aspects of audit expectation gap in hungary. As noted in liggio 1974 and aljaaidi and salmen 2009 the accounting expectations gap has been generally defined as the difference between. A lady introduce her husbands name with saying by which can stop or move train what is. I am online and ready to help you via whatsapp chat. Hence, this study attempts to examine the effect of audit education on audit expectation gap among the accounting students in nigerian universities. The gap is defined as the difference between societys expectations of auditors and perceived performance of auditors porter, 1993. He defined the audit expectation gap aeg as the difference. Liggio 1974a defines it as the difference between the of the profession and this. The auditors responsibility relating to fraud in an audit of financial statements. Reflection paper on expectations for electronic source data and data transcribed to electronic data collection tools in clinical trials. According to singleton 2006, very few individuals are aware that. Also, through an analysis of the literature national and in particular, international literature on audit expectation gap this study aims at getting a deep insight into the theoretical.
The focus point of the audit expectation gap in the. The remainder of this paper is organised into four major sections. In the 1970s and 1980s, massive corporate failures resulted in the accounting. Although the existence of the audit expectation gap and its associated problems has been acknowledged for more than 100 years, it appears that liggio 1974 was the first to apply the term audit expectation gap in the auditing literature. In the 1970s and 1980s, massive corporate failures resulted in. In 1978, the definition was extended by the commission on auditors responsibilitiescar cohen. The gap doesnt seem to have narrowed since the term was first used. However, despite its apparent longevity in the accounting literature, there seems to be little consensus as to its precise definition.
The firs accounting and auditing international conference. Find similar items by using search terms and synonyms from our thesaurus for economics stw. Audit expectation gap first came up in 1974 when liggio discuss the presence of expectation gap due to the fact that since the late 1960, the audit profession had been under attack regarding the quality of its professional performance. While its common to refer to the expectation gap, in truth there are several gaps. An investigation of audit expectation gap in bangladesh. The finding of the study of dewing and russel 2002 was uk fund managers were aware of the presence of an audit expectation gap and were particularly concerned with the duties and responsibilities of the auditors. Liggio 1974a defines it as the difference between the levels of. Stakeholders and market participants may need or want more information about the audit and the results of the audit, the nature and extent of the audit procedures performed, and the quality of the audit. There is concern that auditors and the public hold different beliefs about the auditors duties and responsibilities and the messages conveyed by audit reports. The communications gap is caused by public expectations being unreasonable. The paper explores whether an environmental reporting expectations gap exists within australia.
Recent regulatory initiatives targeting the statutory audit regime support the notion that the audit expectation gap is still a driver of change. The existence of the audit expectation gap and its associated problems has been acknowledged for more than 100 years. The audit expectation gap broadly measures public concern about audit. Recommendations and strategies for narrowing the gap in. Although its about expectations but still its scope and meanings have been defined in number of ways. In particular, the audited financial statements beneficiaries expectations exceed what auditors can reasonably be expected. What is the summary of the story bowaon and totoon. Tricker 1982 viewed the audit expectation gap as the result of a natural time lag in the auditing profession, which identified and responded to continually evolving and expanding public expectations. The audit expectation gap between companies and their. An analysis of audit expectation gap munich personal repec. An empirical study of audit expectationperformance gap.
The survey research design was employed and information was sought from respondents using a structured likert scale questionnaire. The role of auditing education abstract there is now considerable evidence of a gap when external auditors understanding of their role and duties is compared against the expectations of various user groups and the general public regarding the process and outcome of the external audit, i. The study, sponsored by the institute of chartered accountants in australia, surveyed the attitudes of senior executives within 462 of the largest companies within australia the preparers group, as well as the attitudes of 474 individuals. It was carried out to determine if there exists any significant expectation gap in the nigeria auditing environment. In this paper, we consider one potential explanation for the persistence of the expectation gap. The audit expectations gap and the role of audit education. Financial reporting and the accounting expectations gaap. The audit expectation gap aeg concept appears to be, unarguably, as old as the accounting and auditing profession, hence has been variously researched.
The expectation gap eg was first conceptualized by liggio 1974 and is defined by sikka et al. Is audit education also accountable for the audit expectation. The term audit expectation gap aeg was first introduced to audit literature by liggio 1974. Abstract this study sought to examine users perception of reasonableness audit expectation gap in nigeria. The main objective of the study is to examine the role of auditing education in narrowing the audit expectation gap in nigeria. It was defined as the difference between the levels of expected performance. Liggio 1974 was the first to introduce the term audit expectation gap to audit literature. An empirical study of audit expectation gap in hungary. The phrase audit expectations gap was first introduced into the literature over twenty years ago by liggio 1974. The concept of expectation asymmetry in audit was first formulated by liggio 1974, who defined it as the. The second section discusses the research methodology.
An overview of audit expectation gap the issue of audit expectation gap aeg has been very significant to the accounting profession since the mid1970s and continues to be debated on till today liggio, 1974. Low et al 1988 conducted on the audit expectation gap in singapore. The present study investigates the standards gap, performance gap, and the reasonableness gap with an in depth focus on the duties, responsibilities, and performance of auditors in preventing, detecting and reporting corporate fraud, which is one of the key issues in the audit expectations gap debate. Auditing expectation gap or simply expectation gap is the term used to signify the difference in expectations of users of financial statements and auditors expectation concerning audited financial statements. Abstract the research work examined the impact of audit education on audit expectation gap in nigeria. This paper discusses about auditor independence and audit expectation gap. There is widespread concern with the existence of the expectation gap between the auditing profession and the public. Introduction the role of auditors in the financial statement has been and continues to be an important issue for the auditing profession. Liggio 1974a being the first to introduce the expectation gap, defines it as the difference. An assessment of audit expectation gap in ghana albert agyei1 baah kusi aye2 ebenezer owusuyeboah3 1,2,3valley view university, school of business oyibi accram, 1email. The word audit expectation gap was first initiated to audit literature by liggio 1974.
Pdf deconstructing the audit expectation gap concept. Impact of auditing education on audit expectation gap in nigeria. The participants are accounting students in 300 levels and 400 levels in. Audit expectation gap introduction the audit expectation gap has a long and persistent history. Theory of assessment and practical aspects of audit. They are various concepts to this audit expectation gap. The audit expectation gap has been defined as the difference between the. The accountants waterloo 1974 journal of contemporary business volume 3 no 3 at p 27 12 b porter an empirical study of the audit expectation performance gap 1993 accounting and business research vol 24 no 93 p 50. Media bias and the persistence of the expectation gap. Impact of auditing education on audit expectation gap in. The term audit expectation gap was first introduced to the audit literature by liggio in 1974. Audit independence and expectation gap semantic scholar. The aim of this paper is to uncover the causes of an audit expectation gap.
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