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In 2013 the International Auditing and Assurance Standards Board (IAASB) proposed the revision of the international auditing standard on the audit report (ISA 700) to meet the information needs of the users of audited financial statements. The purpose of this research was to investigate whether the International Standards Assurance and Accounting Board’s (IAASB) revised International Standard on Auditing (ISA 700) would reduce the expectation gap. It focused on the expectation gap investigation in three areas, namely: responsibilities of auditors, reliability of audited financial statements and decision-making usefulness of audited financial statements. A differential testing instrument was used in the study and completed by research subjects that comprised auditors, bankers and shareholders. Non-parametric Kruskal-Wallis H test and non-parametric Mann-Whitney test were used to analyse the data. The results of the study showed that despite the audit report modifications, expectation gap remained persistent with regard to auditors’ responsibilities. On the positive front, the study showed that the revised ISA 700 resulted in users finding audited financial statements reliable and useful for decision-making purposes.

Purpose - To identify how auditors can incorporate unpredictability into their audit plan in order to comply with both US and international auditing standards on the prevention and detection of fraud. Design/methodology/approach - Review of auditing standards, fraud cases, and other audit literature. Findings - A cost-benefit model for evaluating unpredictability and 17 specific ways that auditors can incorporate unpredictability. Practical implications - This paper can be used by practicing auditors to develop ways to increase their compliance with professional standards. Originality/value - The paper fills avoid in the literature with respect to how auditors can be unpredictable as required by auditing standards.

published_or_final_version / abstract / Economics and Finance / Doctoral / Doctor of Philosophy

This thesis found that many criticisms were directed to the International Auditing Standards (ISA). Thus, the ISA needs more interpretations and improvements to be more applicable and suitable for Jordan. The thesis concluded that the external auditors in Jordan are complying with the ISA. From the perceptions of external auditors, shareholders, academics, internal auditors, and financial management an audit expectation gap exists in Jordan. External auditors, shareholders and the ISA are responsible for that gap. Improvements are needed to both auditors' performance and the ISA to bridge the audit expectation gap. Furthermore, this thesis introduces recommendations to eliminate the shareholders' unreasonable expectations, which is one of the reasons for the audit expectation gap in Jordan. / Doctor of Philosophy (PhD)

In the period leading up to the early 2000s there were a series of large company failures attributed at least in part to audit failures. Consequently, the Sarbanes Oxley Act (SOX) was promulgated in July 2002 to restore confidence in public company financial reporting and the work of auditors. The Public Company Accounting Oversight Board (PCAOB) was established by SOX and appointed as the regulator of the accounting firms that audit the financial statements of public companies. The PCAOB is required to routinely inspect the operations of these accounting firms in an effort to satisfy its mandate to bring about an improvement in the audit quality of these companies. These inspections extend to the non-US auditors of companies that are cross-listed in the US. Despite various mainly US studies on inspections, there is limited evidence that the inspections have resulted in improved audit quality. ... I examine companies whose securities are cross-listed in the US in the periods before and after inspection in order to provide evidence on the benefits of inspections. I find some evidence that inspections improve the audit quality of companies that are cross-listed in the US. This suggests the audit quality of companies from countries that do not permit inspections may be positively affected should inspections be permitted. / by Errol G.G. Stewart. / Thesis (Ph.D.)--Florida Atlantic University, 2012. / Includes bibliography. / Mode of access: World Wide Web. / System requirements: Adobe Reader.

This study examines whether the probability of a firm receiving a going concern modified report or a standard audit report with note disclosure of a going concern uncertainty has increased after the issuance of SAS No. 59. This study also examines whether the probability of a firm having no reference to a going concern uncertainty in its audit report or the financial statement notes has decreased after the issuance of SAS No. 59. The findings provide support for the hypotheses that a firm has a higher probability of receiving a standard audit report with note disclosure of a going concern ('J uncertainty and a lower probability of receiving no reference to a going concern uncertainty in the audit report or the financial statement notes after the issuance of SAS No. 59. However, this study finds no support for the hypothesis that a firm has a higher probability of receiving a going concern modified report after the issuance of SAS No. 59. The findings of this study suggest that the Auditing Standards Board, the government, and the accounting profession should consider the impact of SAS No. 59 on the presence of note disclosure when assessing the success or failure of SAS No. 59 in decreasing the so-called audit expectation gap.

M.Comm. / Selde in die geskiedenis van die mens was daar so 'n ingrypende mate van verandering soos wat tans plaasvind. Nuwe dinge word daagliks beproef, verbeterde metodes word ontwikkel, bestaande rekords word gebreek en hoer hoogtes word bereik. Die besigheidswereld is insgelyk aan verandering onderhewig. Veranderinge van die afgelope agtien maande behels eerder 'n totale omwenteling vir Suid-Afrikaanse besighede. Skielik is Suid-Afrika weer deel van die internasionale sakegemeenskap. Dit impliseer dat Suid-Afrikaanse besighede met buitelandse maatskappye op die wereldmark op gelyke voet moet meeding. Die voldoening aan IS09000 blyk deel van die internasionale spel te wees. IS09000 is `n internasionale kwaliteitstandaard wat modelle vir kwaliteitstelsels voorstel. Indien Suid-Afrikaanse besighede internasionaal wil meeding, is hierdie 'n belangrike aspek om in gedagte te hou. Hierdie skripsie handel juis oor hierdie eksternse bedreigings (of geleenthede) vir Suid- Afrikaanse besighede. Dit is veral die toepaslikheid van die IS09000-standaard op die ouditprofessie wat onder die loep geneem word. `n Verdere oefening is die ondersoek van die vereistes waaraan voldoen moet word ten einde IS09000-sertifisering te verkry. Die redes en voordele van sertifisering word aangespreek asook literatuur oor die kwaliteitsbestuur. Die huidige mate van voldoening aan die IS09000-standaard by Onderneming A is gemeet. Hierde proses het verskeie gestruktueerde onderhoude met sleutel bestuurspersoneel ingesluit. Die gevolgtrekking waartoe gekom word, is dat Onderneming A tans the aan die IS09000-kwaliteitstandaard voldoen the. Dit is egter the 'n negatiewe weerspieling van die Onderneming of sy mense the, maar eerder te wyte aan die eiesoortige standaard van die vereistes van IS09000. Klem word op die formele dokumentasie geplaas en dit beInvloed die resultaat van die studie. Dit het verder geblyk dat opvattings en persepsies oor die bestuur van kwaliteit van mens to mens, asook oor verskillende posvlalcke heen, verskil. 'n Aksieplan word voorgestel wat Onderneming A in staat behoort te stel om aan die standaardvereistes te voldoen.

Auditors perform a very important task within the context of the affairs of a company because financial reporting can only serve its purpose if stakeholders can rely on its accuracy and reliability. An auditor’s duty is to opine whether an entity’s financial reporting has been done according to the requirements of the law. The responsibility of reporting according to the law lies with an entity’s directors. Auditors cannot issue an absolute assurance as to the lawfulness and reliability of an entity’s financial reporting. However when it is subsequently discovered that the financial reporting was incorrect and that fraud has occurred auditors are often blamed and sued for enormous amounts of money for failing to detect material anomalies in the financial reports. These actions are based on the fact that auditors have a duty to exercise reasonable care and skill in the performance of their duties and through their failure to act as such, have caused financial harm to the clients or third parties. The fact that auditors are only required by law to exercise reasonable care and skill and perform an audit according to the standards of the reasonable auditor and not the most meticulous one, is often not regarded or is sometimes deliberately ignored. This clearly represents a problem in our law, namely that the presence of fraud in financial reports does not in itself suggest negligence on the part of the auditor but is apparently often perceived to do so. This research shows that the auditor’s duty of reasonable care and skill does not necessarily entail the duty to detect fraud. The elements of the duty of reasonable care and skill are identified from case law, legislation and international auditing standards. In order to limit the liability of auditors in general it is important to focus also on the elements of fault (negligence), wrongfulness and causation. This research shows that negligence cannot be established merely by the presence of fraud or material misstatements in financial statements. The responsibility for fair financial reporting lies with the directors. This research gives prominence to this fact which often seems to be ignored for convenience and in order to place the blame on the auditors. This research implicitly asks the question, why are auditors being held responsible for material misstatements in a company’s financial statements and not the directors? Guidelines for determining the extent of an auditor’s liability in this regard are formulated in this research.

Between the years 1998 and 2002, the United States suffered a time in which several large companies engaged in fraudulent behavior which eroded investor confidence in the stock market and to some extent destabilized the economy. Audits, which were conducted to assess the validity and reliability of a company's financial statements, were not detecting the material misstatements in the statements. As a result, both the US Government and the accounting profession needed to come up with a way to prevent these immense frauds from occurring in the future. As a response to these large frauds, in 2002, the US Government passed the Sarbanes-Oxley Act of 2002 (SOX) and the American Institute of Certified Public Accountants (AICPA) issued Statement on Auditing Standards No. 99(SAS No. 99) to improve investor confidence and the auditing function's ability to detect material frauds. The intent of this thesis was to look at the fraudulent factors associated with several recent corporate frauds and compare them to the standards set by SAS No. 99. Through the analysis conducted, this thesis looks at the relationships between pressures, opportunities, and rationalizations made during the act of fraud.