The Audit Expectation Gap in Public Firms in Nigeria: A Focus on Selected Firms in Nasarawa State
Publication Date: 09/12/2018
Author(s): Ombugadu Bala Azagaku, Sylvester Umbugadu Aku.
Volume/Issue: Volume 1 , Issue 2 (2018)
Abstract:
Audit expectation gap (AEG) is the deference between what the public expects from an audit function and what the audit profession accepts the objective of auditing to be. The existence of an audit expectation gap is likely to be detrimental to the value of auditing and the well-being of the auditing profession. This has stirred a number of professional and regulatory reforms aimed at protecting shareholders who rely on the financial statements for decision purposes. Despite the existence of research elucidating the difference between what the public expects from audit and what the audit profession accepts as the objectives of auditing, there appears to be few researches on how to address this issue in Nigeria. This study was conducted with the primary aim of contributing to knowledge towards narrowing the apparent expectation gap between the users of financial statements on one hand and the auditors on the other hand. This research investigates whether Audit expectation gap exists in public firms in Nigeria with focus on Nasarawa State. Respondents view was also sought on how to narrow the gap. Four hypotheses were formulated and tested using descriptive and Kolmogorov – Smirnov (K-S) test. The study reveals that an audit expectation gap exists in Nigeria, specifically on issues relating to auditor’s responsibility. Therefore, the study recommends educating the public about the objects of an audit, auditors’ role and responsibilities, to narrow the audit expectation gab.
