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Addressing Information Needs to Reduce the Audit Expectation Gap: Evidence from D utch Bankers, Audited Companies and Auditors
Author(s) -
Litjens Robin,
Buuren Joost,
Vergoossen Ruud
Publication year - 2015
Publication title -
international journal of auditing
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.583
H-Index - 21
eISSN - 1099-1123
pISSN - 1090-6738
DOI - 10.1111/ijau.12042
Subject(s) - audit , accounting , business , joint audit , agency (philosophy) , information technology audit , walk through test , audit plan , audit evidence , internal audit , philosophy , epistemology
This study examines what the impact is of frequently proposed information needs on reducing the audit expectations gap ( AEG ), including information about the audited company, information about the audit process and changes to the auditors' report. We base our findings on a survey of 302 participants from the N etherlands, consisting of 61 bankers, 118 preparers and 123 auditors. We consider the AEG in essence to be a classic agency problem. We find that stakeholders fall back in basic strategies to maximize their own value: bankers require additional information, management is reluctant to let the auditor provide sensitive information and auditors try to minimize their risks. Further, we observe that only information about the audit process with respect to continuity and the reporting of errors in the financial statements may reduce the bankers' AEG . Finally, we observe that format changes to the auditors' report do not reduce the bankers' AEG .