Audit Quality, Auditor's Independence and Audit Expectation Gap

Running head: AUDITING
Auditing
Name of the Student
Name of the University
Author’s Note

1AUDITING
Abstract
The major findings of the essay shows that the quality of audit can be maintained in various
ways like to maintain the professional adherence to the regulations, to gain the required
knowledge and others. Hence, it is needed to assess the audit quality for the overall success of
the audit operations. It can be seen from the outcome of the study that the independence of
the auditors can be affected in the presence of huge non-audit services and long tenure
between the audit client and auditor which can compromise the audit quality. The findings
also state that there must be a restriction on non-audit services and long-standing auditor-
client tenure to enhance the audit quality. After that, the quality of audit gets affected in the
presence of audit expectation gap. More specifically, the main reason behind the development
of the audit expectation gap are affecting the quality. These reasons are the absence of
professional scepticism, presence of self-interest in the audit client and others. Audit quality
can be increased by considering these aspects.

2AUDITING
Introduction
Auditing can be considered as the systematic as well as methodical process of the
inspection and examination of the financial statements of the companies in order to make sure
that they are free from material misstatements (Louwers et al. 2015). It is the responsibility of
the auditors to provide the necessary assurance about the truthfulness and fairness of the
financial statements. For this reason, it is needed for the auditors to maintain the audit quality
while considering the necessary aspects like auditor’s independence, audit expectation gap
and others (Louwers et al. 2015). The main objective of this report is to discuss about audit
quality and the impacts of different aspects on the audit quality that are auditor’s indepdence
and audit expectation gap. In specific, the essay addresses three question; that are the audit
quality and assessment of audit quality, impact of auditor’s indepdence on audit quality and
the impact of audit expectation gap on audit quality. This report undertakes the assessment
and analysis of various literatures on these research questions with the aim to answer these
questions. More specifically, this report undertakes the analysis as well as evaluation of the
concepts like auditor’s independence, audit quality and audit expectation gap as this
discussion assists in addressing the above-discussed issues.
Audit Quality and Assessment of Audit Quality
Audit Quality: Audit quality is considered as an essential factor for the whole audit process.
Audit quality includes the presence of key elements that help in creating an atmosphere
which maximizes the possibility that the quality auditors are performed on reliable basis
(ifac.org 2019). The sole purpose of audit is to improve the degree of confidence of the users
of the financial statements in the company’s financial statements and this can be achieved by
the auditors to gather the appropriate audit evidence so that the correct audit opinion can be
expressed on the fact that whether the financial statements are prepared as per the correct
accounting standards and they are free from material misstatements. As per the International
Auditing and Assurance Standards Board (IAASB), it is hard to define the audit quality.
However as per IAASB, there are certain elements that help in creating the environment that
helps in consistent basis. They are Inputs, Process, Outputs, Key Interactions within the
Financial Reporting Supply Chain and Contextual Factors (accaglobal.com 2019). As per
IAASB, it is possible to maintain the audit quality when the auditors ensure certain aspects;
they are application of the appropriate values, ethics and attitudes; application of sufficient
knowledge, skill and experience in the presence of sufficient time to allocate the audit works;