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Towards an Understanding
of the Audit Expectation Gap
-- Teck Heang Lee, Azham Md. Ali and Doria Bien
The auditing profession believes that the increase in litigation and criticism against the auditors can be
attributed to the audit expectation gap. The audit expectation gap is defined as the difference between what the public
expects from an audit and what the audit profession accepts the audit objective to be. The audit expectation gap is critical
to the auditing profession because the greater the unfulfilled expectations from the public, the lower is
the credibility, earnings potential and prestige associated with the work of auditors. The objectives of the paper
are: to review the definition of audit expectation gap; uncover the causes of audit expectation gap; review
previous studies on the audit expectation gap; and evaluate the suggested solutions in reducing the audit expectation
gap. It is hoped that such an attempt will provide some valuable insights into the audit expectation gap.
© 2009 IUP. All Rights Reserved.
Audit Market Competition:
Causes and Consequences
-- Zulkarnain Muhamad Sori
The aim of this paper is to examine the impact of competition in audit market and client importance to
perceived auditor independence from the perspective of Malaysian auditors, loan officers and senior managers of public
listed companies. It is found that auditor independence would be threatened if auditors were to receive significant
fees from a single client. The dependence on a single client would cause auditor to face a `self-threat' risk, where
they were economically and financially reliant on a single customer. The interview survey disclosed that
regulatory authorities should closely monitor the profession by persistently scrutinising each audit firm's revenue and expenses.
© 2009 IUP. All Rights Reserved.
Provision of Non-audit Services, Low Balling, Audit
Tenure and Auditor Type
-- Arvind Patel, Veer Singh Varma and Pranil Prasad
This paper investigates the reasons for supply of Non-Audit Services (NAS) by the incumbent
auditor.The audit and nonaudit fee data for listed companies in New Zealand is used in the study. The results suggest that
the simultaneous provision of audit and NAS are for efficiency reasons rather than maximizing the revenue for
auditors. Hence the regulations in place to restrict the amount of NAS that an auditor can provide the client may result
in inefficiencies or incurrence of unnecessary costs for the client and auditor.
© 2009 IUP. All Rights Reserved.
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