Addressing information needs to reduce the audit expectation gap: Evidence from Dutch bankers, audited companies and auditors

Research output: Contribution to journalArticleScientificpeer-review

Abstract

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 Netherlands, 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.
Original languageEnglish
Pages (from-to)267-281
Number of pages14
JournalInternational journal of auditing
Volume19
Issue number3
DOIs
Publication statusPublished - 1 Oct 2015

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Expectations gap
Information needs
Audit
Bankers
Auditors
Audit process
Company information
Information management
Stakeholders
Continuity
Agency problems
Financial statements
The Netherlands

Keywords

  • Audit expectation gap
  • information needs
  • auditors' report
  • audit stakeholders
  • Survey

Cite this

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Addressing information needs to reduce the audit expectation gap : Evidence from Dutch bankers, audited companies and auditors. / Litjens, Robin.

In: International journal of auditing, Vol. 19, No. 3, 01.10.2015, p. 267-281.

Research output: Contribution to journalArticleScientificpeer-review

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