This study examines the effect of accounting knowledge and experiences of Iranian bank officers on the audit expectation gap, and investigates whether the gap mediates (or explains) the individual factor-loan decision performance relationship. Copies of a structured questionnaire were distributed to 113 loan officers from five large commercial banks in Iran and responses of 111 bank officers were analysed. The results show the existence of a fairly large audit expectation gap among the Iranian bank loan officers, and accounting knowledge was found to significantly mitigate the extent of the gap. More importantly, this study found a highly significant negative relationship between the audit expectation gap and loan decision performance of the Iranian bank officers. Further analyses indicate that the audit expectation gap fully mediates the individual knowledge-performance relationship. The findings of this study have important policy implications for recruitment and training of the bank officers.

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -This study aims to investigate the effects of individual knowledge/experience on the audit expectation gap of loan officers in Malaysia and the subsequent effect of the audit expectation gap on their loan decision quality. In addition, the mediation role of the audit expectation gap is examined. Design/methodology/approach -Copies of a structured questionnaire were randomly distributed to three hundred and twenty loan officers of the top four commercial banks in Malaysia. A total of 212 completed questionnaires were analysed using structural equation modelling. Findings -The findings indicate that the knowledge/experience factors could significantly mitigate the audit expectation gap. More importantly, the audit expectation gap is found to adversely affect the loan decision quality. The mediating role of the audit expectation gap is also supported.Research limitations/implications -The findings of this study may not be generalizable to other economic, cultural and political settings. Practical implications -Banks may narrow their loan officers' audit expectation gap and hence, their non-performing loans through selective recruitment or appropriate knowledge/skill enhancement in-house training programmes. Originality/value -This study provides the needed empirical evidence of the adverse effect of audit expectation gap on the loan decision quality of bank officers in Malaysia. Unlike the 2009 findings of Noghondari and Foong, which was based on an Islamic banking context in Iran, this study, which was based on the conventional banking context, found that accounting-related and job-related work experience of bank officers had significantly mitigated the audit expectation gap. The findings have important implications on the recruitment and training of loan officers by banks.

In this research, it has been tried that the relation between the expectations distance from the attitude of auditing report responsibility by the credit experts and lack of repayment of granted facilities in the branches of Iran's Keshavarzi Bank to be studied. Methodology: With regard to this issue that the fundamental aim of Keshavarzi Bank is to supply the capital needed for development and constancy of agriculture section, the cheapest and most reliable source of supplying the financial needs is to collect the receivables namely the bank's demand from customers which is one of the important criteria in improvement of management performance too. One of the factors which is considered at the time of deciding for granting the facilities, is the auditing report of facilities demanders. The difference between the society's attitude to the independent auditors' responsibility and whatever that auditors do currently, causes to create the expectations distance from auditing report. In the event that this expectation distance of credit experts and authorities is more than the expected extent, it will be effective on lack of re-payment of granted facilities.Results: The findings of this survey research are according to the results gained from collecting 250 questionnaires from deciders and authorities of credits payment in the bank system. In this same line, we have tried to assess this relation by applying the statistics and information collected in time span of 2015. In this research, the linear regression at the level of 95% has been used. With regard to the gained results, it was specified that with increase of expectations distance from the responsibility attitude of auditing report by credit experts, lack of re-payment of granted facilities is increased which indicates the existence of direct relation between these two variables. Conclusion: Therefore, for promotion and improvement of profitability, the banks' managers should consider the components and dimensions of auditing report and the compilers of bank standards should have more regard to the concept of auditing report in the conceptual frame and propose it in more colorful form.