Audit Expectation gap is the difference between society's expectation of auditors and auditors performance as perceived by the society's.
According to the American institute of certified public accountants in 1992 as," The difference between what the public and financial statement users believe auditors are responsible for and what auditors themselves believe their responsibilities are.
THREE TYPES OF AUDIT EXPECTATION GAP
1. Deficient Performance Gap:
The failure of auditors to perform up to the reasonable responsibilities expectation of the society is referred to a deficient performance gap. That is when auditors are perceived to perform below standards. Some of the adjusted reasons for the gap are provision of non- audit service by auditors, dependence of auditors on management, self and conflicting interest of the auditors.
2. Deficient standard gap:
The deficient standard gap is the difference between what the auditors are reasonably expected to do by the society and what laws, standard etc require then to do. It is the gap between the
responsibilities expected and the responsibilities expressly by statue.
3. Deficient reasonableness gap:
This gap explains the difference between what the society expects from auditors and what auditors are reasonably expected to do. It can be seen that major cause of this gap is in the unreasonable expectation of usrers
No comments