An empirical investigation of the audit expectations gap in Iran
Journal of Islamic Accounting and Business Research
ISSN: 1759-0817
Article publication date: 19 April 2011
Abstract
Purpose
This paper investigates whether an audit expectation gap exists among independent auditors and users of financial statements in Iran.
Design/methodology/approach
The study uses a survey instrument to identify the audit expectation gap in Iran. The research method is similar to that adopted by Schelluch, Best et al., Fadzly and Ahmad and Dixon et al.
Findings
Audit expectation gaps are found to exist in the areas of auditor responsibility for fraud detection, soundness of the internal controls, and preparation of financial statements. Results indicate no significant difference between users and independent auditors regarding the reliability and utility of audited financial statements. The insignificant results in terms of audit function could be attributed to the culture of trust between auditors and stakeholders in Iran.
Research limitations/implications
Despite normal precautionary steps to increase the response rate, non‐response bias may affect the findings. Another limitation of the study is the different economic and cultural conditions of Iran compared to other countries. Therefore, caution should be used in generalizing the findings to other countries.
Practical implications
The findings will help to reduce the expectation gaps through improvement in auditor‐user communication in the audit reports as well as educating users on the nature and functions of audits.
Originality/value
The paper extends previous studies on audit expectation gap in a different economic and cultural context, i.e. Iran.
Keywords
Citation
Pourheydari, O. and Abousaiedi, M. (2011), "An empirical investigation of the audit expectations gap in Iran", Journal of Islamic Accounting and Business Research, Vol. 2 No. 1, pp. 63-76. https://doi.org/10.1108/17590811111129517
Publisher
:Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited