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Factors contributing to the Audit Expectation Gap

Expectation gap is the gap between what public believe that auditors do and what actually auditors do or ought to do. Expectation gap occurs when the audits fail to meet the expectations of users of audited financial statements.



Knowing the source of expectation gap (EG) is very important for the parties involved in the Expectation gap because it become be easier to address the problem. The source of the expectation gap can be categories into five components as explained below:
Deficient audit standards. The audit standards do not exhaustively address all issues happening in audit. The blame for this deficiency is laid on the audit profession. For instance the audit standards do not place full responsibility over the auditor
regarding detection fraud and illegal acts in the audited financial statements ( ISA 240). Yet it has been widely reported that non detection of fraud and management wrong doings are one of the major expectation gap.



Substandard performance of the auditors
Expectation gap may also arise from unsatisfactory performance by an auditor i.e. low quality of the audit work performed . The blame for this deficiency is logically placed on auditor for non adherence to the required professional guidelines and standards.
Unreasonable expectations of the public Ambitious expectation from the public may result to expectation gap. The source of this audit expectation gap is public and arise from lack of knowledge to the public about audit profession and acceptable conducts.

7 thoughts on “Factors contributing to the Audit Expectation Gap”

  1. Pingback: Measures that can be used in Minimizing audit expectation Gap. - ACCOUNTING CLASS

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