Adeyemi and Uadiale - African Journal of Business Management Vol 5(19 pp 7964-7971 9 September 2011 Available online at

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African Journal of Business Management Vol. 5(19), pp. 7964-7971, 9 September, 2011 Available online at http://www.academicjournals.org/AJBM ISSN 1993-8233 ©2011 Academic Journals Full Length Research Paper An empirical investigation of the audit expectation gap in Nigeria Semiu Babatunde Adeyemi* and Olayinka Marte Uadiale Department of Accounting, University of Lagos, Lagos State, Nigeria. Accepted 11 August, 2011 The audit expectation gap (AEG) is denoted as the difference between what the public expects from an audit function and what the audit profession accepts the objective of auditing to be. The existence of an audit expectation gap is likely to be detrimental to the value of auditing and the well-being of the auditing profession as the contribution of auditing may not be fully recognized by society. This has stirred a number of professional and regulatory reforms aimed at protecting shareholders who rely on the financial statements for decision purposes. In spite of the existence of research pointing to the difference between what the public expects from audit and what the audit profession accepts as the objective of auditing, there appears to be paucity of research on how to address this issue in Nigeria. Therefore, this research investigates whether audit expectation gap exists in Nigeria and the perception of the users’ group on its existence. Respondents view was also sought on how the gap could be narrowed. Three hypotheses were formulated and tested using the analysis of variance. The study reveals that an audit expectation gap exists in Nigeria, particularly on issues concerning auditor’s responsibility. It was also observed that there are significant differences in the perception of respondent groups on the existence of the audit expectation gap in Nigeria. Therefore, the study suggests educating the public about the objects of an audit, auditors’ role and responsibilities to narrow the audit expectation gap. Key words: Audit, audit expectation gap, public expectation, Nigeria. INTRODUCTION There is concern that auditors and the public hold different beliefs about the auditors’ duties and respon- sibilities, and the messages conveyed by audit reports; and also, that the existence of this expectation gap might cause the end users to eventually lose their trust in audit reports all-together. The existence of an audit expec- tation gap implies that the role senders (auditees and audit beneficiaries) are dissatisfied with the performance of auditors (Koh and Woo, 1998). In recent years, there has been sudden collapse of corporate institutions within and outside the country (for example Enron and Worldcom in USA; Cadbury, NAMPAK, Intercontinental Bank, Oceanic Bank and Fidelity Bank in Nigeria) and the subsequent implications of the reporting, auditors has *Corresponding author. E-mail: [email protected] Tel: +234-8035071047. highlighted the audit expectation gap.
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Adeyemi and Uadiale - African Journal of Business Management Vol 5(19 pp 7964-7971 9 September 2011 Available online at

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