The limitation of the article is that the findings of the study are based entirely on the perceptions of managers, chief accountants and accountants in automobile manufacturing enterprises in Vietnam. The self-assessment score-based findings may therefore exhibit some degree of bias. Moreover, the article only studies the application of RA in automobile manufacturing enterprises in Vietnam in general but has not studied the application of RA in
these units in each specific field. Therefore, the author proposes the next research direction to study the application of RA in automobile manufacturing enterprises in specific fields such as manufacturing motor vehicles; manufacturing motor vehicle bodies, trailers and semi-trailers;
manufacturing spare parts and accessories for motor vehicles and vehicle engines.
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THE AUDIT EXPECTATION GAP:
A REVIEW OF THE ACADEMIC LITERATURE
Nguyen Thu Hoai - Pham Duc Hieu Thuongmai University
Abstract
After appearing for the first time in Liggio (1974), the term “audit expectation gap”
(AEG) has received the attention of many researchers. Recently, the audit expectation gap has been highlighted as a hot spot in the auditing research because of the collapse of some spectacular and corporations such as Enron. The objective of this paper is to provide an overview of the previous studies and to summarize their findings and implications as a basis for determining the appropriate model and methods for the empirical studies about the audit expectation gap in the future.
Keywords: audit expectation gap, AEG, definition, structure, evidence on the existence.
1. Introduction
Although making a lot of sense for the economy, external auditing has to face the criticism or lawsuits from the users whenever there is a bankruptcy, collapse of a company or corporation. One of the causes of this problem is the audit expectation gap. The audit expectation gap is detrimental to the financial reporting and auditing process, as the users are unsatisfied with the performance of the external auditor. The unfulfilled users’ expectations impair the value of auditing, the credibility, earnings potential and prestige associated with the work of auditors. Porter et al. (2005) suggested that when the credibility and reputation of the auditing is reduced to a certain extent, the role of this profession will become useless.
Furthermore, despite the fact that many studies aimed at building the concept and structure of the AEG, but there is still inconsistency between these studies for many reasons:
(1) The groupings of interest groups are different. Some studies approach the AEG from the users and the professions, whereas some evaluate AEG just from the users or the auditors.
(2) The content of the investigation is different such as: the responsibilities of auditors, messages communicated through the audit report, the level of audit’s assurance.
The aim of this paper is to make stakeholders of auditing to monitor, control or investigate AEG with the same understanding. This will allow professionals and the public to understand and standard setters or regulators to supervise upon the identical approach.
Therefore, understanding the definition, structure and the existence of the audit expectation
gap are necessary to reduce the gap to an acceptable low level. The paper is divided into the following sections: definition of the audit expectation gap; structure of the audit expectation gap; evidence on the existence of the expectation gap.