What is meant by the expression 'expectation gap'?
Correct answer: C. The gap between the public perception of the role of company auditors and their statutory role and responsibilities
- A. The gap between how the directors of a company perform their duties and how the shareholders expect them to perform
- B. The gap between how the directors of a company perform their duties and how the general public expects them to perform
- C. The gap between the public perception of the role of company auditors and their statutory role and responsibilities
- D. The gap between the auditors' own perception of their duties and how they are set out in the Companies Act
Explanation
The expectation gap is the difference between what the public believes auditors are responsible for and what auditing standards and law actually require. It is therefore described in option c.
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About Auditing
Auditing examines accounting records and financial statements to determine whether they present a reliable and fairly stated position. The subject covers audit objectives, internal controls, audit evidence, materiality, vouching, verification, working papers, auditor independence, audit reports, and the distinction between an audit and accounting or investigation.
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