Addressing Information Needs to Reduce the Audit Expectation Gap: Evidence from Dutch Bankers, Audited Companies and Auditors

15 Pages Posted: 13 Oct 2015

See all articles by Robin Litjens

Robin Litjens

Tilburg University - CentER and Department of Accountancy

Joost van Buuren

Nyenrode Business University

Ruud Vergoossen

Nyenrode Business University; Maastricht University

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Date Written: November 2015

Abstract

This study examines what the impact is of frequently proposed information needs on reducing the audit expectations gap (AEG), including information about the audited company, information about the audit process and changes to the auditors' report. We base our findings on a survey of 302 participants from the Netherlands, consisting of 61 bankers, 118 preparers and 123 auditors. We consider the AEG in essence to be a classic agency problem. We find that stakeholders fall back in basic strategies to maximize their own value: bankers require additional information, management is reluctant to let the auditor provide sensitive information and auditors try to minimize their risks. Further, we observe that only information about the audit process with respect to continuity and the reporting of errors in the financial statements may reduce the bankers' AEG. Finally, we observe that format changes to the auditors' report do not reduce the bankers' AEG.

Keywords: Audit expectation gap, information needs, auditors' report, audit stakeholders, survey, The Netherlands, bankers

Suggested Citation

Litjens, Robin and van Buuren, Joost and Vergoossen, Ruud, Addressing Information Needs to Reduce the Audit Expectation Gap: Evidence from Dutch Bankers, Audited Companies and Auditors (November 2015). International Journal of Auditing, Vol. 19, Issue 3, pp. 267-281, 2015. Available at SSRN: https://ssrn.com/abstract=2673249 or http://dx.doi.org/10.1111/ijau.12042

Robin Litjens (Contact Author)

Tilburg University - CentER and Department of Accountancy ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Joost Van Buuren

Nyenrode Business University ( email )

Straatweg 25
3621 BG BREUKELEN
Netherlands

HOME PAGE: http://www.nyenrode.nl

Ruud Vergoossen

Nyenrode Business University ( email )

Straatweg 25
P.O. Box 130
Breukelen, 3620 AC
Netherlands

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

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