The audit expectation gap describes the difference between what auditors do and what the public thinks they do. It has been a problem for the audit profession for decades, particularly with regard to auditors’ responsibilities for preventing and detecting fraud and maintaining internal controls. However, there has been a recent paradigm shift towards digital audits using complete data analysis, which may have a significant impact on the expectation gap.
A recent article, published in Accounting Horizons, exploring how the shift towards digitalization will affect the expectation gap from an empirical and normative perspective. The article focuses on fraud prevention and detection and the maintenance of internal controls. The ongoing existence of the expectation gap harms both trust and confidence in the audit profession and undermines its legitimacy.
The study’s findings suggest that digitalization may help to narrow the expectation gap by providing more comprehensive and accurate data analysis. It highlights the importance of the audit expectation gap and the need for further research into how digitalization can help to address this issue.
What do you think? How does the expectation gap change with recent developments?