A study on the determining factors of audit expectation gap in Sri Lanka

Abstract

This research attempt to discover the determinants of a gap in audit expectation between auditors and stakeholders interested in the financial report produced by corporations in Sri Lanka. One among the important roles should be performed by the auditor is to authorize assurance for the accuracy of financial records, Books of accounts, and financial statements. However, there is a high expectation from the auditors with their roles, since it can reduce the prevailing gap in audit expectation. Several determinants affect the gap in audit expectation as suggested within the literature. Therefore, this research investigates the influence of the determinants of the Audit Expectation Gap in Sri Lanka. This research adopts quantitative research and this study employed the survey research. The study used a structured questionnaire to collect the data and research the determinants predict to affect the extent of the gap in audit expectation. Based upon the literature, selected determinants are audit education, efforts of the auditors, skills of the auditors, public knowledge about the profession of the audit, and users‟ needs from auditors. The overall findings revealed a negative relationship with four variables such as AEG and the role of audit education, auditor s‟ efforts, auditors‟ skills, and public knowledge about the profession of the audit. In contrast, AEG and the users‟ needs show a positive association. This study also indicates that all five determinants have a major influence on the level of the audit expectation gap.