Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/257671 
Year of Publication: 
2020
Citation: 
[Journal:] International Journal of Financial Studies [ISSN:] 2227-7072 [Volume:] 8 [Issue:] 1 [Article No.:] 4 [Publisher:] MDPI [Place:] Basel [Year:] 2020 [Pages:] 1-25
Publisher: 
MDPI, Basel
Abstract: 
This paper empirically emphasizes the existence of the audit expectation gap and its impact on stakeholders' confidence, moderated by the active role of the financial reporting council. As a maiden attempt to portray the relationship, a higher-order model has been constituted and assessed with the pragmatic exploration, smearing the partial least squares structural equation model (PLS-SEM). The data contains 174 respondents as auditors, investors, investment and credit analysts, and regulatory agencies in Bangladesh. The study explores audit expectation gap from diverse aspects, such as auditors responsibility for fraud detection, meaning, and usefulness of the audit report, auditors providing the non-audit services, auditors' responsibility for going concern reporting, and also an unmet expectation for the other assurance services, such as assurance on the other parts of the annual report beyond the financial statements, like management discussion and analysis and corporate social and environmental disclosure. The findings suggest that the audit expectation gap is negatively related to stakeholders' confidence and the greater the audit expectation gap is, the lower stakeholders' confidence is in the audit. Auditors maintaining perceived independence and improving the level of communication with users will diminish the audit expectation gap and induce stakeholders' confidence simultaneously. Moreover, the active role of the financial reporting council acts as a moderator to ensure the auditors' perceived independence. The result of the study motivates the policymakers to concentrate on the users' audit-related expectations and also intends the importance of independent audit oversight.
Subjects: 
audit expectation gap
auditor&#x2019
s perceived independence
financial reporting council
stakeholders&#x2019
confidence
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.