Question 1

The negative publicity associated with financial scandals worldwide has seriously eroded public confidence, trust in the auditing profession and damaged the reputation of the profession (Fadzly & Ahmad, 2004). Many believe that this crisis is due to audit expectation gap.

Required

Critically evaluate the above statement and to what extent you believe that the above mentioned crisis can be explained by audit expectation gap. You are required to provide a theoretically explanation why an audit expectation gap could exist between auditors and users of financial statements. You are also required to provide an in-depth discussion on what are the contributing factors of an audit expectation gap and comment whether such a gap can be totally eliminated.

Q1. A theoretically explanation why an audit expectation gap could exist between auditors and users of financial statements. You are also required to provide an in-depth discussion on what are the contributing factors of an audit expectation gap and comment whether such a gap can be totally eliminated.