Audit Education as an Effective Tool for Narrowing Audit Expectation Gap: Evidence from Literature Review

Omodero, Cordelia Onyinyechi; Okafor, Michah Chukwuemeka

doi:10.36941/jesr-2020-0102

Cited by 4 publications

(4 citation statements)

References 13 publications

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“…Conducting regular assessments to identify vulnerabilities and areas of fraud risk within an organization. Employing audits, forensic examinations, and ongoing monitoring to detect and prevent fraudulent activities (Omodero & Okafor, 2020;Owolabi & Olagunju, 2020).…”

Section: Prevention Of Fraudmentioning

confidence: 99%

“…This involves assessing internal controls and inherent risks associated with the client's operations. Auditors review the client's internal control systems to determine their effectiveness in preventing and detecting errors and fraud (Omodero & Okafor, 2020). Weaknesses in internal controls may be noted for further evaluation.…”

Section: Audit Engagement Processmentioning

confidence: 99%

“…This change in auditing objectives, influenced by the Policeman Theory, aimed to protect auditors from legal liabilities when conducting their professional duties. It also led to dissatisfaction among stakeholders such as shareholders, investors, and creditors who expected auditors to play a more proactive role in fraud detection (Omodero & Okafor, 2020). To clarify the primary responsibility of financial auditors, International Standards on Auditing (ISA 240) stipulate that auditors are primarily responsible for expressing an independent opinion on the accuracy, truthfulness, and fairness of financial statements, not for detecting financial fraud or errors.…”

Section: Introductionmentioning

confidence: 99%

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Policeman Theory and Contemporary Auditing in Nigeria: An Empirical Investigation of Past and Present

Akinadewo,

Dagunduro,

Osaloni

et al. 2024

EJAAFR

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There has been a misconception among certain stakeholders regarding the principal responsibility of auditors concerning financial statements. This misconception revolves around the belief that statutory auditors bear the responsibility for detecting fraud and errors within an organization, aligning with the concept known as the "policeman's theory." This research aimed to investigate the impact of the policeman's theory on contemporary auditing practices in Nigeria. The study employed a combination of primary data collection through structured questionnaires and secondary data from extant literature. Findings revealed that the roles and responsibilities of external auditors have undergone significant evolution over the years, among others. As a result of these findings, it is recommended that statutory auditors should prioritize the implementation of robust quality control measures in their audit engagements.

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Section: Prevention Of Fraudmentioning

confidence: 99%

Section: Audit Engagement Processmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Policeman Theory and Contemporary Auditing in Nigeria: An Empirical Investigation of Past and Present

Akinadewo,

Dagunduro,

Osaloni

et al. 2024

EJAAFR

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“…In spite of endeavors made to narrow the Audit Anticipation Gap through improving the principles of auditing, implementing an effective corporate governance framework, in addition to providing adequate and comprehensive audit education to various users of audit reports and the society at large, still the gap exists and is widening and requires further research studies (Aminu, 2022,Lena, 2021, M. C. Okafor, 2020, Goddard, 2020, Fedaa, 2017, Hasen, 2017. More studies are needed to explore stakeholders" perceptions about the causes and consequent effects of such a gap in developing economies, like Sudan.…”

Section: Literature Reviewmentioning

confidence: 99%

A Blueprint for Minimizing Audit Anticipation Gap in a Developing Country: Stakeholders Perceptions

Ghandour¹

2023

IJBA

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Purpose: This paper provides a blueprint for minimizing Audit Anticipation Gap (AAG) in a developing country. The focus was on exploring the occurrence, causes, and consequent effects of the Audit Anticipation Gap in Sudan, by identifying the possible factors that contribute to that gap. This was achieved by surveying the opinions of practicing external auditors, key users of financial statements, and accounting educators.Research Design/Methodology/Approach: A qualitative research approach was adopted through a cross-sectional survey, using in-depth face-to-face structured personal interviews. Furthermore, purposive/judgmental sampling was utilized to select interviewees. Twenty-nine interviews were carried out, and their responses were analyzed using thematic content analysis.Major Findings: The findings did indicate that an Audit Anticipation Gap exists in Sudan due to a weak and undeveloped accounting and auditing profession in the country, ambiguity concerning auditor’s independence, lack of external auditor rotation in the majority of the financial sectors, rendering both audit and non-audit services, absence of rules and regulations that govern external audit practices. Furthermore, major contributing factors included misunderstanding the objectives of auditing, the audit process, and the auditor’s roles and responsibilities by key users of financial statements.Practical Implications: The study provided a wide range of findings that have significant implications for policy making geared toward minimizing the Audit Anticipation Gap in the country, so that accounting will play its proper role in its sustainable economic development.Originality/Value: This study contributes to the existing literature by providing detailed and comprehensive findings from a region that has gained little focus on the subject matter. Specifically, it has shed light on the weaknesses of the accounting and auditing profession in Sudan, with a particular emphasis on the Audit Anticipation Gap. Thus, by surveying the viewpoints of the key stakeholders, the study provided prescriptions for turning around the accounting profession in the country to a potential world-class status.

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The audit expectations gap firms listed on the Palestine Stock Exchange: empirical evidence on Palestinian stakeholders

Faza’,

Badwan,

Hamdan

2024

JIABR

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Purpose The purpose of this study is to empirically evaluate the audit expectations gap among stakeholders in listed firms in Palestine. The purpose of the investigation is to determine whether or not there is a gap in audit expectations between auditors and investors, auditors and board directors, as well as among auditors and financial managers and also among auditors and shareholders. Design/methodology/approach To attain its ultimate objective, this study was created using an exploratory descriptive methodology grounded in the use of quantitative methods. A structured questionnaire was used to gather study data from 81 respondents, and a statistical package for the social sciences-26 was then used for analysis. Findings The results of this research showed that there is a sizable difference in audit expectations among shareholders, financial managers and board directors, as well as among auditors and investors. The findings also demonstrate that, in comparison to the difference between auditors and financial managers, the gap between auditors and board directors and auditors and shareholders is very narrow. Research limitations/implications This investigation, which examines the audit expectations gap in great detail, has some significant limitations. This study was limited to the Palestinian market alone. Future research might compare or examine the variations in audit expectations in Jordan, Lebanon, Syria, Iraq and Iran, among different countries. In addition, the demand for accurate and reliable financial reports has sparked a recent increase in interest in auditing, a long-standing sector that has expanded in recent years. Practical implications The study has several practical implications, for example, it underlines how crucial it is to make stakeholders aware of the limitations and difficulties related to the auditing process. By doing this, the situation that audit committees and listed firms find themselves in will be easier for investors, board directors, financial managers and shareholders to understand. The way that auditors and stakeholders communicate can help reduce this gap since it affects how much each party underestimates or understates the other’s obligations. Originality/value This paper contributes to the literature by analysing and identifying the causes of the audit expectations gap in companies listed on the Palestine Stock Exchange and providing useful insights and potential solutions to close or mitigate it. It also adds a new contribution to the literature related to the audit expectation gap. This investigation offers unambiguous evidence of a sizable discrepancy between audit expectations and actual performance in terms of formal auditor obligations as outlined by current law, as well as auditor reliability standards and practices, between auditors, board directors, investors, shareholders and financial managers in listed Palestinian firms.

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Audit Education as an Effective Tool for Narrowing Audit Expectation Gap: Evidence from Literature Review

Cited by 4 publications

References 13 publications

Policeman Theory and Contemporary Auditing in Nigeria: An Empirical Investigation of Past and Present

Policeman Theory and Contemporary Auditing in Nigeria: An Empirical Investigation of Past and Present

A Blueprint for Minimizing Audit Anticipation Gap in a Developing Country: Stakeholders Perceptions

The audit expectations gap firms listed on the Palestine Stock Exchange: empirical evidence on Palestinian stakeholders

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