Audit Expectation Gap in Kenya

Abstract

The audit expectation gap is a major concern in Kenya's accounting profession, where auditors are expected to identify and prevent financial fraud and misstatements. The disconnect between what the general public anticipates from an auditor's report and what the audit actually offers is often referred to as the audit expectation gap. Several factors, including limited resources and the complexity of auditing, increase the complexity of addressing this gap. The literature reviewed evaluates a variety of factors, including audit committee characteristics, auditor characteristics, sustainability auditing, and audit education, which contribute to this gap. Overall, the literature suggests that there is a significant discrepancy between the expectations of the public and the actual responsibilities of auditors, implying that auditors need to improve their interactions with their clients and the general public. This study establishes that it is necessary to address a number of audit expectation gaps in Kenya, whichinclude those related to performance, standards, communication, and legal requirements. Regulators are required to provide clear standards and guidelines for auditors so as to maintain the standard of audit quality. This paper recommends that the effectiveness and credibility of auditing in Kenya be enhanced through a multidimensional strategy that encompasses regulatory oversight, public education, and auditor independence, thereby improving stakeholders' confidence in the financial reporting system. The findings from this research may inform the development of policies and regulations that will close the audit expectation gap and improve public trust in the accounting profession.