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 Audit expectation gap is the gap between the role of an auditor as understood by the auditor and the users of financial statements .It is a gap between what the auditor is doing and what the society expects him to do creating the impression that the statutory objective of audit is not meeting the social needs of the populace. The functions performed by the accounting profession are vital to the growth and stability of the financial market, whether at the global level or at the local level (Egbiki, 2006: 56 - 57). An audit has been defined as an examination of the financial statements of an enterprise by an independent expert (the auditor) with a view to attesting that such financial report (in his opinion) show a true and fair view of the state of affairs of that enterprise for the period under review. The contribution of the auditor is to provide credibility to information. This means that the information can be believed and that it can be relied upon by outsiders. The outsiders include shareholders and government regulators. Others are creditors and customers. Usually these third parties use the information to make various economic decisions. An example of this decision is whether to invest in the organization. Economic decisions are made under conditions of uncertainty as there is always a risk that the decision maker will select the wrong alternative and incur a significant loss. The credibility added to the information by the auditors actually reduces the decision makers’ risk Therefore auditors reduce information risk, which is the risk that the financial information used to make a decision is materially misstated. The legal position is that an audit is carried out to enable an auditor form an opinion as to the truth and fairness of financial statements presented to him by his client’s management and to report accordingly. The accuracy of a company’s accounts is the sole responsibility of the directors. However, the accounting profession in Nigeria and other climes has been under intense pressure due to rising public expectations. These expectations have been fuelled largely as a result of demise of some financial institutions in the late 80’s to early 1990’s and very recently for banks that failed to meet the statutory minimum recapitalization to the tune of N25 billion .Yet other banks failed the CBN ” stress” test. In the light of these developments the heat was turned on accountants as members of the public sought whom to blame. The wide spread news of financial scandal and false reporting rife in the collapsed institutions have cast the organizational controls and auditors in very poor light. It has also tended to undermine the confidence of the public in the profession to detect and prevent corporate abuses. Audit failures have been blamed, partly, on greed on the part of auditors. In defense, auditors have often replied that they are not primarily responsible for detecting frauds and errors. However, shareholders, depositors and most of the general public remain unimpressed as they query the value of a watchdog that cannot bark let alone bite. Most people cannot seem to accept the legally defined status. They would wish to see an auditor’s certificate as an assurance that all that needs to be known about the financial transactions of a company have been disclosed to the auditor. In the same vein, an auditor’s signature should be taken to mean that all is well with the health of the institution concerned and that there has been no fraud or other malfeasance. This, however, is often not the case. Two components of the audit expectation gap have been identified –communication gap and performance gap. Communication gap has to do with what the auditors think is their role and what the members of the public perceive should be the role of auditors. Performance gap, on the other hand, occurs when public expectations are reasonable but the auditor’s performance does not fulfill them. This means that there is a short fall in the auditor’s performance. (Okafor and Okaro, 2009: 11). In the past, attempts have been made to bridge the gap by the profession. For example attempts have been made to educate users of the limitations of the modern audit process. As part of the process of educating the user of audited accounts, the modern audit report usually tries to delineate clearly the respective responsibilities of the directors of a company and that of the auditor in respect of audited financial statements. The profession has also tightened the noose on self regulation bringing to book erring members of the profession. The mandatory continuing professional education whereby members of professional accounting bodies are compulsorily required to attend professional seminars has also ensured that members’ skills are updated and horned up. However, like a sore thumb, the gap appears to have remained as wide as ever. At the local level, the recent scandal in Cadbury Nigeria Plc whereby profits were overstated by a whopping sum of over N13 billion, and the subsequent indictment of the accounting firm of Akintola Williams Delloite for audit failure, has further aggravated the expectation gap conundrum. The international community has not been spared either. The collapse of the energy giant Enron in the United States of America in 2002 as a result of what was obviously a case of audit failure and wobbly accounting standards has again ignited a global search for tools to at least narrow the expectation gap. The literature is awash with fresh suggestions and initiatives aimed at tackling the problem of expectation gap. ICAN MEMBERS are a very important stakeholder group in the search for a solution to the expectation gap problem. Their cooperation or lack of it can have a tremendous effect on the resolution or otherwise of the problem. This work is therefore an attempt to document in Nigeria, the perception of ICAN MEMBERS as to the initiatives for bridging the audit expectation gap problem.

Project detailsContents
Number of Pages91 pages
Chapter one Introduction
Chapter two Literature review
Chapter three  methodology
Chapter  four  Data analysis
Chapter  five Summary,discussion & recommendations
Chapter summary1 to 5 chapters
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