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Effectiveness of Auditor’s Report as a Medium of Communication to Reduce the Level of the Audit Expectation Gap of Amon Chartered Accountants

Author

Listed:
  • Newman WADESANGO

    (University of Limpopo, South Africa)

  • Nasoma DAVID

    (Midlands State University, Zimbabwe)

  • Lovemore SITSHA

    (Midlands State University, Zimbabwe)

Abstract

The audit expectation gap is a widely researched phenomenon in the accounting world. This study sought to evaluate the effectiveness of the audit report as a medium of communication and as a tool to reduce the audit expectation gap. It also focused on exploring the roles and responsibilities of auditors and the entity’s management and directors from the views of auditors and users of financial information. A quantitative research approach was adopted, and the target population was the ACAZ staff and staff of its three clients and a census was used, since the targeted population was limited. The research instruments that were used were questionnaires. The results were presented in tables and graphs and analyzed using mode and regression analysis. The study established that the audit report is effective in reducing the audit expectation gap, because it provides with the duties and responsibilities of both auditors and the entity’s management and directors, but only if the users pay attention to all information the report contains, and also that the language and meaning of the audit report is not that easy to understand to users of financial statements, that it can lead to another expectation gap, so the users are to be educated and interpreted on the meaning of other paragraphs provided in the audit report.

Suggested Citation

  • Newman WADESANGO & Nasoma DAVID & Lovemore SITSHA, 2024. "Effectiveness of Auditor’s Report as a Medium of Communication to Reduce the Level of the Audit Expectation Gap of Amon Chartered Accountants," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 5(7), pages 62-73, July.
    • Handle: RePEc:ahd:journl:v:5:y:2024:i:7:p:62-73
    DOI: 10.37945/cbr.2024.07.07
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    References listed on IDEAS

    as
    1. Quick, Reiner, 2020. "The Audit Expectation Gap: A Review of the Academic Literature," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 124768, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    2. Oseni Abubakar Idris & Ehimi Celestina Ojemen, 2012. "Existence and Nature of Audit Expectation Gap: Nigerian Perspective," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(8), pages 1051-1063.
    3. Samuel A. Olaoye & Theophilus A.Aguguom & Sodiq E. Safiriyu & Tobi Abiola, 2019. "Independence of Statutory Auditor and Reliability of Financial Statements: Evidence from Listed Manufacturing Companies in Nigerian," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 9(8), pages 436-449, August.
    4. Tarek Abdelfattah & Mohamed Elmahgoub & Ahmed A. Elamer, 2021. "Female Audit Partners and Extended Audit Reporting: UK Evidence," Journal of Business Ethics, Springer, vol. 174(1), pages 177-197, November.
    5. Mahmoud Elmarzouky & Khaled Hussainey & Tarek Abdelfattah & Atm Enayet Karim, 2022. "Corporate risk disclosure and key audit matters: the egocentric theory," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 30(2), pages 230-251, March.
    6. Hian Chye Koh & E‐Sah Woo, 1998. "The expectation gap in auditing," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 13(3), pages 147-154, April.
    7. Nguyen Ngoc Khanh Dung & Dang Anh Tuan, 2019. "The Study of Audit Expectation Gap: The Auditor?s Responsibilities in a Financial Statement Audit in Vietnam," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(11), pages 1227-1254, November.
    8. Agus Joko Pramono & Riefqi Hanief, 2022. "An Investigation of Audit Expectation Gap in Indonesia’s Public Sector," Jurnal Tata Kelola dan Akuntabilitas Keuangan Negara, Badan Pemeriksa Keuangan Republik Indonesia, vol. 8(1), pages 1-21.
    9. Nguyen Ngoc Khanh Dung & Dang Anh Tuan, 2019. "The Study of Audit Expectation Gap: The Auditor’s Responsibilities in a Financial Statement Audit in Vietnam," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(11), pages 1227-1254.
    10. Samuel A Olaoye & Theophilus A Aguguom & Sodiq E Safiriyu & Tobi Abiola, 2019. "Independence of Statutory Auditor and Reliability of Financial Statements: Evidence from Listed Manufacturing Companies in Nigerian," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 9(8), pages 436-449.
    11. Elizabeth Gutierrez & Miguel Minutti-Meza & Kay W. Tatum & Maria Vulcheva, 2018. "Consequences of adopting an expanded auditor’s report in the United Kingdom," Review of Accounting Studies, Springer, vol. 23(4), pages 1543-1587, December.
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    More about this item

    Keywords

    auditor’s report; medium of communication; audit expectation gap; management;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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