AUDIT & ASSURANCE

Audit & Assurance



Audit & Assurance

Expectation Gap

One of the most important functions of management is to control. Control is an objective phenomenon in the economic life of society. Control in the area of financial management - an integral part of the regulatory system. Depending on the nature of the subjects and the control of the financial control is divided into state, departmental and non-departmental, depending on the object of control - the internal and external, depending on the organization of the - on the audit (audit) and audit (audit). It is a method of non-departmental audit of financial control. An audit does not replace or substitute for state financial control, subject to available state agencies. (Newman, B., 1964)

Audit activity is directed to all economic entities regardless of their legal and ownership.

Audit and inspection are ways of organizing control over financial and economic activity of economic entities, among them there are many similarities, but there are fundamental differences too. When we talk about Expectation Gap, it basically refers to the phenomenon of public acceptance and knowledge about the audit being carried out. It can be said that it is the difference of expectations of people from the audit and the actual performance that is being delivered by the audit. An auditor should always try to minimize this gap. In order to do that, an auditor should

Be responsible for financial statements

Certify the above

Give early warnings for the chances of the company failures

Timely trace frauds

Stay neutral during the audits

State of the art

The positive accounting theory, in its organizational aspect, has framed the purpose of the audit in the traditional agency relationship in which the role of the professional is unveiled as a main strategy to monitor the work agent, such that this has a restriction that it merely to fulfill their objectives more efficiently as manager of the company, in line with mutual interests pre- fixed in the contract signing. Therefore, firms have incentives to hire an independent audit tooth send to market and commercial investment marketing of products and services on the message ability of the entity to respond with quality and yield to their demands. However, it is clear that the observation of the relationship customers. The Auditor is not limited strictly to space

business organization being audited, because such linkages contractual it is necessarily determined by the environment institutional and social context in which it operates and, more specifically, for the set of regulations for formal and informal underlying it.

The audit expectation gap studies follow the same line methodological research supported in the new institutional economics and are characterized expand their

spectrum analysis broader factors, in which take into account the power and interest that other agents socioeconomic may have on the audit report. For this reason, resort to disciplinary conceptual elements disciplines such as sociology, history, economics, among others, in order to interpret and understand in a more complex contextual and social ties that are forged from audit or insurance contract.

The audit expectation gap is a concept that refers ...