School of Business and Management
Lincoln University College
Wisma Lincoln,
No. 12-18, Jalan SS 6/12
47301 Petaling Jaya, Selangor, MALAYSIA.
School of Accounting and Finance
Lincoln University College
Wisma Lincoln,
No. 12-18, Jalan SS 6/12
47301 Petaling Jaya, Selangor, MALAYSIA.
Faculty of Accountancy
Universiti Teknologi MARA Cawangan Kelantan
Bukit Ilmu
18500 Machang, Kelantan, MALAYSIA.
Faculty of Accountancy
Universiti Teknologi MARA Cawangan Kelantan
Bukit Ilmu
18500 Machang, Kelantan, MALAYSIA.
School of Accounting and Finance
Lincoln University College
Wisma Lincoln,
No. 12-18, Jalan SS 6/12
47301 Petaling Jaya, Selangor, MALAYSIA.
Master of Accounting Post Graduate School
Universitas Muhammadiyah Sumatera Utara
Jln Denai No 217 Medan Sumatera Utara, INDONESIA.
Abstract
Audit expectation gaps (AEGs) denote the difference between the public’s expectations and the auditor’s perceptions of the auditor’s roles and duties. Ironically, the wider the gap, the higher the public mistrust of auditing. Even worse, it could increase litigation against the auditors and thus destroy their reputation. AEGs have garnered global attention, focusing mainly on financial audits. However, it is also relevant to the performance audit in the public sector, specifically in the Malaysian context. Intrigued to bridge the gap, this study aims to investigate the existence of AEGs in Malaysian public sector performance audits, focusing on three audit concepts: audit scope, auditor’s competence, and ethics. The researchers interviewed eighteen informants: eight public sector auditors, two members of the Public Account Committee (PAC), four academicians, and four journalists. Employing NVivo 12 software, the results showed the presence of AEGs in all three audit concepts. The role of conflict theory enables us to explain that stakeholders have different expectations of the auditor due to power imbalances and conflicts of interest, leading to disagreement with the auditor’s perceptions. The discoveries contribute valuable insights to policymakers, accounting professional bodies, and auditors to mitigate the AEGs by educating the audit stakeholders on the extent of audit scope, auditor’s competency, and ethics that the audit can justify. Furthermore, understanding the auditor’s roles and duties will reduce unreasonable expectations and thus elevate public trust in the auditors. Hence, narrowing down the AEGs is vital for the relevancy and sustainability of audit professions in the forthcoming years.