Expectations versus auditing reality

There is much confusion in the investing public’s mind about the true
nature of auditing and the assurance that auditors are expressing in their
reports. Major misconceptions about the role of auditors continue, the
most common being:
• Auditors are ‘fraud detectives’.
• Auditors provide a guarantee of corporate solvency.
• Auditors conduct a management efficiency review.
All professions suffer from some sort of expectations gap (e.g. lawyers,
doctors and surveyors), but the difference is that these groups tend to deal
on a one-to-one basis with their clients, whereas auditors have a mass
audience: the body of shareholders of their audit client, and others who
may rely on audited financial statements. One mistake by an auditor could
damage the financial fortunes of thousands. Thus there is a greater public
interest not only in the proper performance of an auditor’s duties, but in
auditors meeting the expectations of the public. To some extent this is
never going to be achieved since public expectations may be unreasonable,
for example the expectation that an auditor is able to detect and prevent
every fraud no matter how trivial.

What can be done to close the expectations gap?

Steps that can be taken to reduce the gap between public expectations and
audit performance include:
• improve auditors’ performance
• educate the public
• do something else, for example develop lower-level assurance services
such as the Independent Professional Review, which was tried in the
UK, although it was a short-lived experiment.

---

Share : Facebook Twitter Google+ Digg

Jika Anda menyukai Artikel di blog ini, Silahkan klik disini untuk berlangganan gratis via email, Anda akan mendapat kiriman artikel setiap ada artikel yang terbit di Our Akuntansi