The Audit Expectation Gap Analysis - 1922 Words

The audit expectation gap The meaning of the expectation gap involves argument concerning the contradictory meaning of what an audit is to user of financial statement, the public and the audit profession. Expectation gap is the difference between what the public assumes to be the role of audit and what the audit profession claim their role is in carrying out the audit function. . All the theories above describe the expectations the stakeholders have of the auditors, including protection against fraud, warning of future insolvency, general re-assurance of financial well-being, safeguards for auditor independence and understanding of audit reports. Although these expectations seem to be rather natural, however, an audit expectations gap does exist based mostly on the diversity of views about the audit function. The gap exists between what the public expects the auditor to do and what the auditor can and should do. Several suggestions were made to narrow the expectations gap, as well as providing statutes in ord er to describe audit functions especially concerning the responsibility to detect and report errors and fraud. Component of audit expectation gap Reporters have credited the expectations gap to mean that users of financial statement are confused, ignorant or lack education. Porter in his analyses divided the expectation gap into three different component which includes a) sub-standard performance b) deficient standards and c) unreasonable expectations. a) TheShow MoreRelatedA Critical View of the Audit Expectation Gap and Audit Rotation1828 Words   |  7 PagesAudit Expectation Gap Audit Rotation A Critical View Auditing is one of the most critical fields where the external auditors are always subjected to criticism and legal regulations which are mostly directed against them. Mostly this criticism arises because of lack of sufficient understanding of how the company law and auditing standards work and also due to related misconception about the actual role of an auditor (Porter, 1993). This lack of understanding is called expectation gap where theRead MoreData Analytics, An Integral Part Of Modern Audit Practices1202 Words   |  5 PagesData analytics in audit Introduction: It is interesting to know how modern technology has helped auditors to become efficient with respect to time and resources. Not only that, auditors of late have become heavily dependent on technology for their easy and efficiency. Data analytics is defined as the process of inspecting, cleaning, transforming, and modeling data with the goal of highlighting useful information, suggesting conclusions, and supporting decision making. -Various sources DataRead MoreEvaluation Of A Independent Audit Committee1683 Words   |  7 PagesBecause the audit committee is representing the shareholders, and assist the external auditors to reduce the information asymmetry, as the agent for the shareholders towards management (agency principal). By hiring the audit committee and the external auditor, it will monitor the managements as shareholders agents, in order to minimise or to reduce the risk of management actions that harm shareholders interests. Furthermore, the ASX (ASIC 2015) stated that it is important to be independent, due toRead MoreAudit Is A Negative Activity1982 Words   |  8 Pagesthe audit is a negative activity. Firstly, we should find out what is audit. Anderson(1977) captured the essence of auditing when he stated: the practice of auditing commenced on the day that one individual assumed stewardship over another property. In reporting on his stewardship, the accuracy and reliability of that information would have been subjected to some sort of critical review. To understand what an audit is ,and how it is conducted in the modern context, we need definition for audit. AuditingRead MoreWalk Through Audit Customer Survey2036 Words   |  9 PagesMN216 Service Management Shauna Gallagher- 12472702 Walk-Through Audit Customer Survey A Walk-Through audit or WTA involves the selection of a service in which you prepare an audit questionnaire used by management to evaluate the service by investigating the customer’s perception. This W-TA was done in order to establish the service quality of The Pavilion restaurant at Beach Point Club by employing a questionnaire to review the service from the viewpoint of customers, management, and employees.Read MoreAuditing And Assurance And Financial Statements1996 Words   |  8 Pagesresponsibility of the auditor to give an opinion on financial statements weather the financial statements giving true and fair view in all material aspects. But there is problem with the agent principle relationship while doing audit in any organization. Expectation gap also occurs during audit process between the auditors, managers and investors on the bases of auditor’s responsibility which should be improve by auditors by himself by improving auditor’s responsibility. Information and insurance hypothesesRead MoreThe Basic Elements Of Tqm Essay1410 Words   |  6 Pagesstandards in the healthcare systems and communities are necessary activities. B. Strategic planning and Leadership: Strategic planning needs to anticipate many changes such as customer’s expectations, new opportunities, advance diagnostic technologies development; evolving patients care system and social expectations. Achieving quality and healthcare service leadership requires a strong future orientation and a willingness to make, long-term relations ion to key customers, employees, doctors, nursesRead MoreAudit Disaster Futures: Antidotes for the Expectation Gap8505 Words   |  35 PagesManagerial Auditing Journal Emerald Article: Audit disaster futures: antidotes for the expectation gap? Fran M. Wolf, James A. Tackett, Gregory A. Claypool Article information: To cite this document: Fran M. Wolf, James A. Tackett, Gregory A. Claypool, (1999),Audit disaster futures: antidotes for the expectation gap?, Managerial Auditing Journal, Vol. 14 Iss: 9 pp. 468 - 478 Permanent link to this document: http://dx.doi.org/10.1108/02686909910301556 Downloaded on: 04-12-2012 References: ThisRead MoreMeasuring a Hotels Quality of Customer Service Essay479 Words   |  2 Pagesquite difficult to measure the quality of a service, because the satisfaction of the customer depends on many intangible factors and psychological features. The principal methods to evaluate services are: SERVQUAL, Gap Analysis, Tolerance zone and Walking Audits. We are going to explain this methods and study if we could apply them to the hotel.  § SERVQUAL It is a multiple-item scale named SERVQUAL, which measures the five dimensions of service quality.9 Read MoreWorldcom Case Response1280 Words   |  6 Pagesacceptable to hold expenses for a later date when you have excess revenue and can afford to recognize held back expenses. 3. On the topic of capitalizing line costs, critique the rationale included in CEO Scott Sullivans White Paper. Based on your own analysis of GAAP, explain the propriety or impropriety of capitalizing line costs in the telecom industry. Sullivan explained his rationale in a report to the Board of Directors referred as the â€Å"white papers.† In order to meet the customer demand for