Recently, standard setters revised the Auditor’s Report to provide more detail on management’s and auditors’ responsibilities related to going concern disclosures. Refer to Figure 3-3 and explain how this change attempts to reduce the expectations gap.

Figure 3-3

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Figure 3-3 The Audit Expectation-Performance Gap Perceived performance of auditors Audit expectation-performance gap - Performance gap Deficient performance Auditors' existing duties Deficient standards Duties defined by the law and professional standards. 2Duties which are cost-beneficial for auditors to perform. Reasonableness gap Duties reasonably expected of auditors² Society's expectations of auditors Unreasonable expectations