The term 'Expectation Gap' refers to differences in expectations between:
A) auditors and users of audited financial reports.
B) auditors and their clients.
C) CPA Australia/ICAA and the ASIC.
D) auditors and the ASIC.

Question

Quizplus · Accepted Answer

The term 'Expectation Gap' specifically refers to the difference between what the public and financial statement users expect from the auditing process and what auditors believe their responsibilities entail. This gap often arises because users may expect audits to guarantee financial health or detect all fraud, whereas auditors aim to provide reasonable assurance that the financial statements are free from material misstatement.

The Term 'Expectation Gap' Refers to Differences in Expectations Between