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Imperatives of Bridging the Audit Expectation Gap and Enhancing the Credibility of Corporate Financial Information

Author

Listed:
  • John Otalor

    (Chris Awili & co (Chartered Accountants),Edo State, Nigeria)

  • Chinwuba Okafor, Ph.d

    (Department of Accounting,University of Benin, Edo State, Nigeria)

Abstract

he study sought to ascertain if reducing the audit expectation gap would led to greater public confidence in corporate financial information. Self-administered questionnaires were used in the study. The data generated from the responses of the subjects were analyzed using descriptive and statistical analysis through the computer (Eview3.1).The result showed that the higher the audit expectation gap, the higher the negative impact on the credibility of corporate financial reports. Thus, audit expectation gap creates doubt on the reliability of financial statements. Based on the findings and conclusion, it was recommended that the scope of auditors’ responsibilities should be expanded; companies should create a forum for regular interface between management, auditors and financial statement users to enhance confidence in financial reports and strengthening the audit committee and regulatory oversight of auditors to enhance their respective performances.

Suggested Citation

  • John Otalor & Chinwuba Okafor, Ph.d, 2013. "Imperatives of Bridging the Audit Expectation Gap and Enhancing the Credibility of Corporate Financial Information," International Journal of Business and Social Research, LAR Center Press, vol. 3(5), pages 125-138, May.
    • Handle: RePEc:lrc:larijb:v:3:y:2013:i:5:p:125-138
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    References listed on IDEAS

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    1. Ben D. MacArthur & Richard O. C. Oreffo, 2005. "Bridging the gap," Nature, Nature, vol. 433(7021), pages 19-19, January.
    2. Shaked, Avner & Sutton, John, 1982. "Imperfect information, perceived quality, and the formation of professional groups," Journal of Economic Theory, Elsevier, vol. 27(1), pages 170-181, June.
    3. Bailey, Ke & Bylinski, Jh & Shields, Md, 1983. "Effects Of Audit Report Wording Changes On The Perceived Message," Journal of Accounting Research, Wiley Blackwell, vol. 21(2), pages 355-370.
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