An Examination of the Audit Expectations Gap in Singapore

Abstract

This study adds to the literature on the audit expectations gap (AEG) by examining the extent to which lower levels of user cognisance of the role, objectives, and limitations of an audit are associated with unreasonable audit expectations and perceptions. Cognisance is proxied by respondents' demographic characteristics including profession, work experience, university qualification, age, and gender. Respondents include 130 Singaporean auditors, prepares, and users of audited financial reports. Results indicate that the AEG prevails where respondents have relatively little business work experience, and no university qualifications. This supports the premise that lower levels of cognisance of the audit function are associated with the AEG The study also argues that in obtaining results consistent with prior AEG studies set in other countries, the AEG is not affected or constrained by political, legal, social, or economic factors. The study recommends that the accounting professions continue to address the AEG by further educating the public on the role and limitations of an audit, extending the auditor's current responsibilities to match users' expectations, and ensuring the existence and monitoring of audit quality.

Citation

De Martinis, M., Aw, A. and Meng Kim, E. (2000), "An Examination of the Audit Expectations Gap in Singapore", Asian Review of Accounting, Vol. 8 No. 1, pp. 59-82. https://doi.org/10.1108/eb060721