Whether the audit expectation-performance gap is expanding amid changes in audit landscape? New evidence from an emerging economy

Abstract

Purpose – The purpose of this study is to provide fresh insights into whether there is an expectation gap between external auditors' and other stakeholders' perceptions of external auditors' responsibilities in an emerging economy, in light of recent changes to the global audit landscape. Design/methodology/approach – A quantitative approach in the positivistic paradigm was adopted, and a structured questionnaire was used to gather data. Findings – The findings suggested that there was a statistically significant discrepancy between external auditors' and social groups' perceptions of the responsibilities of external auditors. More than half of the gap was due to deficiency in standards, 19% due to unreasonable expectations by society, while 25% of the gap was found to be due to deficient performance. Research limitations/implications – The study focused on the duties of external auditors and not on the duties of other types of auditors while examining the audit expectation-performance gap (AEG), and this was due to the drastic differences in the scope of their duties. Practical implications – The findings of this study are likely to have direct policy implications for regulators, authorities, educators and auditing professionals, who should take immediate actions and measures to reduce the AEG in light of the current global audit landscape advancements and changes. Originality/value – The present study used a substantially updated model to measure the AEG to suit the contemporary changes in the auditing landscape, and could be considered as a pioneering study that measures the AEG in an emerging economy amid recent changes.

Keywords

• Audit expectations gap
• Deficient performance
• Duties of auditors
• External auditors
• Unreasonable expectations