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Executive summary
This report is commissioned to investigate how different users perceive the expectation gap and how the different perceptions have and can affect the role of a modern auditor. Corporate scandals and failures have fuelled the expectation gap debate and have brought the auditing profession under a public microscope. Secondary methods of research using literature such as journal articles were used to find out the history and also what opinions were formed on the expectation gap. To further investigate the variables influencing the expectation gap a questionnaire was developed to be supplied to professional such as accountants and potential and current shareholders (public).
Being that the big debate of the expectation gap is between auditors and the public, respondents’ answers to the questions provided an indication of their perceptions of what they thought what the role of the modern auditor was.
The results showed clarified that there is a difference in the perceptions of professional and users, which leads to the expectation gap increasing. The professional believed that as long the auditor had done everything by the book then they have done their job. It was stated that the auditor’s duties did not include detecting fraud, which is users thought auditors duties included.
The recommendations made were more training for auditors in order to gain the skill of being able to detect lairs during the interviewing process at the beginning of the audit. Another recommendation was extending the auditors’ role however a question of if auditors are willing to let themselves be liable for when fraud is detected and they failed to spot it.
Contents
Introduction. 4
History. 5
Survey Methodology. 7
Survey Findings and Analysis. 8
Narrowing the Gap. 9
Education. 9
Expansion of auditor’s responsibilities and enhancement of auditor independence. 10
Expanded audit report 11
Structured audit methodologies. 11
Conclusion and Recommendations. 12
References. 13
Books. 13
Journal Articles. 13
Web Pages. 13
Appendix. 15
1. Survey. 15
Interview brief and participant consent form.. 15
Questionnaire. 16
2. Group Logs. 17
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However, by enforcing this new system, the main objectives of auditing will change from providing true and fair view, to a true and 100% correct view that has very minimum and rare opportunities for fraud.
Author- Michael A.
Date- 19/07/2010
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