Auditing and Assurance in Australia

Running head: AUDITING AND ASSURANCE IN AUSTRALIA
Auditing and Assurance in Australia
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AUDITING AND ASSURANCE IN AUSTRALIA1
Business Memorandum
Fitzgerald Samway Baker (SBF),
To: William Albanese
From: Mr X
Date: 6th August, 2019
Subject: Relevant legislation and auditing standards
In the response to the query on seeking the advice on the expectation gap of the audit for SBF
Company the whole scenario have been understood and advices are provide which are as
follows-
The audit expectation gap is the gap which is used to signify the difference in the expectation
of the financial users and the other auditing standards. However the expectations are all about
the needs and requirements which could be defined in a number of ways. Hence the
difference in the expectation could possibly look to explain the effective difference between
the engagements over what the auditor finds and believes. Further I can also say that the
understanding difference between nature audits agreements can also be established which is
basically what the users believe about audit and what it actually is. Hence as per my view the
company auditor have to try to reduce the potential risk on an acceptably low level to attain
the possible resource. Hence the resource gap can be defined in the area of the users who are
using the financial statements and hence the process can create the expectation gap. In a
nutshell it can be said that the audit expenses and what the others are expecting from the
company auditor. Hence since for a number of the audit expectation gap had been debated for
a number of times. Thus the same process could reduce the stakeholders and the forums
expectation gap of the client contentions. Thus the company auditor and the other peoples

AUDITING AND ASSURANCE IN AUSTRALIA2
could use the financial statements. On careful ways the analysis gap is one of the reason to
understand the different connecting gaps. Hence the gap does not only hold the lacking in the
part of audit expectation. Hence the audit gaps and the efforts are invested in those areas
where all the required expectation gaps could be bridged upon to ensure that there are no such
audit expectation gaps any further. Thus as per my view the auditors of SBF company could
the following recommendation. These are-
The users must understand why the auditors can provide any reasonable audit assurance and
not the actual evidence and the inherent audit limitations.
 The users need to understand the general purpose of the financial statements are made
up of general user needs and even if the same is audited in a best way possible.
However the audited principal of the financial statements can help to make effective
decisions.
 The users need to realise the auditors evidence is related to the circumstances which
sometimes wrong statements. Although the auditor is guilty of diligence and
sometimes could make wrong judgements over the statements which he could
possibly look to ignore and ended up doing it.
 On the other hand the company auditor and management could be required to produce
the financial statements whether the users could gain a minimum number of
knowledge of how to use and interoperate the statements. The financial statements are
not for everyone to understand and make use of the same.
 The company auditors in order to understand the rules and regulations of the auditing
must arrange some workshops for the company auditors and look to inject some
knowledge to them. The auditor must look to wipe out all the discrepancies among
them.