Audit Expectation-Performance Gap: Components and Impacts on Stakeholders

AUDITING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Auditing refers to the examination of financial statements of a concern with the aim of
giving an opinion about the financial performance and position of the business. The present
report is based on the description related to audit expectation – performance gap that may arise
while performing audit related activities within the various phases of audit inspection process
such as planning, performance and reporting (Schmitz and Leoni, 2019). The report will discuss
how the components of audit expectation model links with the phases of audit inspection model.
Also, the discussion pertaining to impacts of various problems that may arise on ground of
expectation gaps and their components. Various examples will be cited of issues related to
concepts and processes of various phases of audit inspection process. Further, various arguments
will be stated based on research articles related to expectation-performance gap.
MAIN BODY
Explanation of phases of audit inspection process with respect to the components of audit
expectation gap model
Planning phase of audit inspection process: This phase consists of preparing in advance about
what has to be done by the auditor or lead auditor or audit manager or client, to ensure that the
procedures and activities within it must complied with the clients objectives. Here, the perceived
performance of auditors are determined. Also, the standards or performance of auditing must be
identified within this stage. By doing so, the expectation of society and users of accounting and
auditing reports can be determined easily (Akther and Xu, 2020). This helps in establishing the
base on which deficiency in achieving the desired performance and standards are determined and
accordingly, the gaps such as expectation and performance gap can be identified.
The process begins with identifying the expected duties of auditors, then the standards are set for
the auditor's performance, information associated with the background of the clients are obtained
and determining their legal obligations and finally the analytical procedures are initiated at
preliminary stage.
The concept and process explained above can be linked to components of expectation gap model
such as deficient performance and standards because, a poor setting of standards at planning
stage leads to deficiency in standards and performance accordingly.