Effectiveness of Auditor’s Report as a Medium of Communication to Reduce the Level of the Audit Expectation Gap of Amon Chartered Accountants

Abstract

The audit expectation gap is a widely researched phenomenon in the accounting world. This study sought to evaluate the effectiveness of the audit report as a medium of communication and as a tool to reduce the audit expectation gap. It also focused on exploring the roles and responsibilities of auditors and the entity’s management and directors from the views of auditors and users of financial information. A quantitative research approach was adopted, and the target population was the ACAZ staff and staff of its three clients and a census was used, since the targeted population was limited. The research instruments that were used were questionnaires. The results were presented in tables and graphs and analyzed using mode and regression analysis. The study established that the audit report is effective in reducing the audit expectation gap, because it provides with the duties and responsibilities of both auditors and the entity’s management and directors, but only if the users pay attention to all information the report contains, and also that the language and meaning of the audit report is not that easy to understand to users of financial statements, that it can lead to another expectation gap, so the users are to be educated and interpreted on the meaning of other paragraphs provided in the audit report.

Keywords

• auditor’s report
• medium of communication
• audit expectation gap
• management