Revisiting the Audit Expectations Gap

As the regulation of public company audits evolves, questions persist over whether there is still a gap between the public and auditors over expectations for the responsibilities of auditors – what we call the expectations gap. In a recent study, we replicate an earlier study by McEnroe and Martens (2001) (hereinafter “MM 2001”) to determine whether the expectations gap has changed.

In the two decades since MM 2001, events such as audit failures and the issuance of new regulations may have affected the expectations gap. Most notably, large-scale accounting scandals, including those at Enron, WorldCom, and Waste Management, have led … Read more