The audit expectation gap is the difference in the expectations of the
A) assurance providers and the financial statement users.
B) assurance providers and the audit client.
C) audit client and the financial report or other users.
D) audit client and the regulator.

Question

Quizplus · Accepted Answer

The audit expectation gap refers to the difference between the expectations of assurance providers (auditors) and financial statement users (e.g. investors, creditors, regulators) regarding the level of assurance provided by the audit. This gap arises because the users may have unrealistic expectations about the scope and nature of the audit procedures, while auditors may not adequately communicate the limitations of the audit process. Option B is incorrect because the audit client (the entity being audited) is not directly involved in the expectation gap. Options C and D are also incorrect because they do not fully capture the nature of the gap.

The Audit Expectation Gap Is the Difference in the Expectations