Document Type : Original Research

Authors

1 Department of Business Administration, Britannia University, Comilla, Bangladesh

2 Business Administration, Daffodil Institute of IT, Dhaka, Bangladesh

3 Department of port & Shipping Management, BSMRMU, Dhaka, Bangladesh

Abstract

The main objective of this study is to identify the variables that reduce the audit expectation gap and to prescribe a model in doing so in Bangladeshi context. Prominent researchers from various countries suggested several factors in reducing the audit expectation gap. Out of whom only the impact of audit education and the implementation of Financial Reporting Act regulations (FRA-2015 of Bangladesh) have been studied so far in Bangladesh; which indicates the research gap. This motivated the current study in identifying the holistic view for drawing a rigorous conclusion. In doing so, Likert 5 point scale based structured questionnaire has been randomly surveyed to 50 respondents including 20 university faculty members of accounting and auditing discipline; 10 qualified and practicing Chartered Accountants; and a group of 20 articled students of accounting bodies from Bangladesh. Principal component tool of factor analysis and Pearson’s correlation analysis have been employed in analyzing the collected data. Correlation results prove that the identified variables reduce the audit expectation gap significantly and factor analysis strongly recommends a model that reduces the audit expectation gap in Bangladesh.

Keywords

AICPA. (1978). Commission on auditors' responsibilities: Report, Conclusions and Recommendations. New york: Cohen Commission.
Akinbuli, S. F. (2010). The effect of audit expectation gap on the work of auditors, the profession and users of financial information. The Nigerian Accountants , 43 (4), 37-40.
Aljaaidi, K. S. (2009). Reviewing the Audit Expectation Gap Literature from 1974 to 2007. International Postgraduate Business Journal (IPBJ) , 1 (1), 41-75.
Ardelean, A. (2013). Auditors’Ethicsand their ImpactonPublic Trust. Procedia-Social and Behavioral Sciences(92) (pp. 55-60). Lumen: Elsevier Ltd.
Best, P. J., Buckby, S., & Tan, C. (2001). Evidence of the audit expectation gap in Singapore. Managerial Auditing Journal , 16 (3), 134-144.
Chowdhury, R. R., Innes, J., & Kouhy, R. (2005). The public sector audit expectations gap in Bangladesh. Managerial Auditing Journal , 20 (8), 893-908.
Dando, N., & Swift, T. (2002). From Methods to Ideologies:closing the assurance expectation gap in social and ethical accounting, auditing and reporting. Journal of Corporate Citizenship , 8 (Winter), 81-90.
Fowzia, R. (2010). An Empirical Study on Audit Expectation Gap: Role of Auditing Education in Bangladesh. Munich Personal RePEc Archive (MPRA) , Paper No. 22708, 1-18.
Humphrey, C. (1997). Debating Audit Expectations. In M. Sherer, & S. Turley, Current Issues in Auditing (3rd Edition ed., pp. 3-30). London: Paul Chapman.
Kamau, C. G. (2013). Determinants of Audit Expectation Gap: Evidence from Limited Companies in Kenya. International Journal of Science and Research , 480-491.
Koh, H. C., & Woo, E.-S. (1998). The expectation gap in auditing. Managerial Auditing Journal , 13 (3), 147-154.
Lee, T. H., & Ali, A. M. (2008). The Audit expectation Gap: A review of the contributory Factors. Journal of Modern Accounting and Auditing , 4 (8), 30-37.
Lee, T. H., Ali, A. M., & Bien, D. (2009). Towards an understanding of the Audit Expectation Gap. ICFAI Journal of Audit Practice , 6 (1), 7-35.
Liggio, C. D. (1974a). The Expectation Gap: The Accountant's Waterloo. Journal of Contemporary Business , 3 (3), 27-44.
McEnroe, J. E., & Martens, S. C. (2001). Auditprs' and Investors' perceptions of the Expectation Gap. Accounting Horizons , 15 (4), 345-358.
Porter, B. (1993). An Empirical Study of the Audit Expectation-Performance Gap. Accounting and Business Research , 24 (93), 49-68.
Porter, B., & Gowthorpe, C. (2004). Audit Expectation-Performance Gap In The United Kingdom In 1999 And Comparison With The Gap In New Zealand In 1989 And In 1999. Edinburgh: The Institute of Chartered Accountants of Scotland.
Porter, B., Ó hÓgartaigh, C., & Baskerville, R. (2012). Audit Expectation-Performance Gap Revisited: Evidence from New Zealand and the United Kingdom. Part 1: The Gap in New Zealand and the United Kingdom in 2008. International Journal of Auditing , 16 (2), 101-129.
Saeidi, F. (2012). Audit expectations gap and corporate fraud: Empirical evidence from Iran. African Journal of Business Management , 6 (23), 7031-7041.
Salehi, M. (2011). Audit expectation gap: Concept, nature and trace. African Journal of Business Management , 5 (21), 8376-8392.
Shbeilat, M., Abdel-Qader, W., & Ross, D. (2017). The Audit Expectation gap: Does Accountibility Matter? International Journal of Management and Applied Science , 3 (9), 75-84.
Shil, N. C. (2015). Expectations Gap and Pre-Financial Reporting Act Regime. The Cost and management , 43 (4), 45-52.
Sidani, Y. M. (2007). The audit expectation gap: evidence from Lebanon. Managerial auditing Journal , 22 (3), 288-302.
Siddiqui, J., Nasreen, T., & Chowdhury-Lema, A. (2009). The audit expectation gap and the role of audit education: the case of an emerging economy. Managerial Auditing Journal , 24 (6), 564-583.
Sikka, P., Puxty, A., Willmott, H., & Cooper, C. (2003). The Impossibility of Eliminating the Expectation Gap: Some Theory and Evidence. Critical Perspectives on Accounting , 9 (3), 299-330.