expectations gap

Discrepancies between the expectations of auditors and the expectations of *auditees, other parties interested in an audit, and public opinion. The term is normally used in the context of external auditing, and it tends to be painfully apparent when external auditors are perceived to have failed to detect a corporate *fraud or other *material *irregularity in a corporation’s financial statements. The expectations gap has been described as "the difference between how financial auditors are perceived (responsible for the detection of *fraud) and how they see themselves (primarily responsible for forming a professional opinion on the financial statements)" (Power, 1994a, 24) and "a representation of the feeling that auditors are performing in a manner at variance with the beliefs and desires of those for whose benefit the audit is being carried out" (Humphrey, 1991, 7). Further reading: Sikka et al. (1998); Wolf et al. (1999)