The nature of the audit expectation gap, its existence in the Irish context and the views of the Irish accountancy profession on bridging the gap

摘要

In recent times, the auditing profession around the world has been involuntarily udplaced in the spotlight, mainly because of the spectacular corporate collapses of udseemingly successful companies and the subsequent implication of the reporting udauditors. This ‘widespread criticism of, and litigation against, auditors indicates that udthere is a gap between society’s expectations of auditors and auditors’ performance, udas perceived by society’ (Porter, 1993). ud udThe purpose of this dissertation is to examine the nature of the audit expectation gap, udto investigate the existence of the audit expectation gap in the Irish context and to uddetermine the views of Irish practitioners on ways of bridging the expectation gap. udThe Commission of Inquiry into the Expectations of Users of Financial Statements ud(1992) examined the existence of the expectation gap in Ireland during the early ud1990’s. However, there appears to be a lack of evidence of the extent of the audit udexpectation gap currently in existence in the Irish context. This dissertation aims to udaddress this issue and to determine the most appropriate methods of narrowing the udgap. ud udThe findings of this study indicate that an audit expectation gap exists, particularly udwith regard to the following issues: fraud detection and prevention, responsibility for udinternal controls, responsibility for the maintenance of accounting records, the udauditors use of judgement regarding the selection of audit procedures and the level of udassurance given by the audit report. The findings also reveal that the Irish udaccountancy profession are aware that an audit expectation gap exists. The udinterviewees clearly believed that the most effective method of reducing the audit udexpectation gap would be the education of both shareholders and company directors udwith regard to the limitations of the audit process as well as the roles and udresponsibilities of both the auditors and company directors.