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.
Key audit matter as per ISA 701 are those matters in auditor’s professional judgement, were of the most significance during the audit of financial statements. Key audit matters are supposed to be reported on the audit report of reporting entities having public accountability
Reporting entity having public accountability includes:-
Any entity that its debt or equity instrument are … Read the rest
Auditors are required to plan and perform an audit with professional skepticism to exercise professional judgement and to comply with ethical standards.
Professional judgement is the application of relevant training, knowledge and experience in making informed decisions about the appropriate courses of action in the circumstances of the audit engagement. The auditor must exercise professional judgement when planning an audit … Read the rest