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The Audit Reporting Model: Current Research Synthesis and Implications

47 Pages Posted: 6 Sep 2012 Last revised: 25 Jan 2016

Theodore J. Mock

University of Southern California; University of California, Riverside

Jean Bédard

Université Laval - École de comptabilité

Paul Coram

University of Adelaide - Business School; Financial Research Network (FIRN)

Shawn Davis

Emory University

Reza Espahbodi

Washburn University

Rick C. Warne

University of Cincinnati - Department of Accounting

Date Written: August 30, 2012

Abstract

This research synthesis evaluates relevant research concerning the audit report. For too long, there has been a significant “expectations gap” between what financial statement users expect an audit is delivering and what the audit profession believes it is providing. This gap becomes particularly problematic for auditors when there is a “business crisis” and attention is directed to the role of the auditor. Two related gaps are considered in this synthesis, a communications gap and an information gap. All of these gaps relate to the demand for, understanding of, and use of auditor communications, which is the focus of this synthesis.

Our synthesis is driven by two primary research questions: What do financial statement users perceive as information that should be communicated and what does research show to be the effects on users of existing and other auditor communications currently being considered?

As we discuss in detail, prior research does address many aspects of these two questions, but many of the findings are mixed and some important aspects have not been studied. Further research, particularly in areas regarding changes to the audit reporting model currently being considered, could lead to the improvement of the value relevance of auditor services, disclosures, and assurances. The clear interest by regulators and standard setters in such applied research should serve as a strong incentive for academics to conduct such research and for the practicing profession to support it.

Keywords: The Audit Reporting Model, The Audit Report, Auditing, Assurance, Expectation Gap, Financial Statements

Suggested Citation

Mock, Theodore J. and Bédard, Jean and Coram, Paul and Davis, Shawn and Espahbodi, Reza and Warne, Rick C., The Audit Reporting Model: Current Research Synthesis and Implications (August 30, 2012). Auditing: A Journal of Practice & Theory, 32 (Supplement 1):323-351. Available at SSRN: https://ssrn.com/abstract=2141924

Theodore J. Mock

University of Southern California ( email )

Los Angeles, CA 90089-0441
United States

University of California, Riverside ( email )

Riverside, CA 92521
United States

Jean Bédard

Université Laval - École de comptabilité ( email )

2325, rue de la Terrasse
Québec, Quebec G1K 7P4 G1V 0A6
Canada
418-656-7055 (Phone)
418-656-2624 (Fax)

Paul J. Coram

University of Adelaide - Business School ( email )

10 Pulteney Street
Adelaide, South Australia 5005
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Shawn Davis

Emory University ( email )

201 Dowman Drive
Atlanta, GA 30322
United States

Reza Espahbodi (Contact Author)

Washburn University ( email )

School of Business
1700 SW College Avenue
Topeka, KS 66621
United States
785 670-1587 (Phone)

Rick C. Warne

University of Cincinnati - Department of Accounting ( email )

Cincinnati, OH 45221-0211
United States

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