Audit Expectation Gap: Views of Audit Professionals and Financial Statement Users on Narrowing the Gap in the UAE

This study investigates the audit expectation gap (AEG) in the United Arab Emirates (UAE) by exploring the perspectives of auditors and financial statement users. Drawing on the ACCA (2021) three-component framework, it examines the knowledge gap, performance gap, and evolution gap, and assesses how stakeholders perceive existing and proposed strategies to narrow these gaps. The study employs a qualitative, interpretive approach using semi-structured interviews analysed through thematic coding. Findings indicate that while auditors broadly agree on the scope of their professional responsibilities, users of financial statements frequently hold misaligned expectations, particularly regarding fraud detection. The study identifies the need for enhanced auditing education in the UAE, stronger auditor independence mechanisms, and the adoption of advanced audit technologies. It also underscores the importance of ongoing dialogue among auditors, regulators, investors, and other stakeholders as a routine professional practice, rather than a reactive response to financial crises or corporate scandals.

Audit expectation gap; UAE auditors; knowledge gap; performance gap; evolution gap; qualitative research

1. Association of Chartered Certified Accountants. (2019). Closing the expectation gap in audit. ACCA. https://www.accaglobal.com [Google Scholar] [Crossref]

2. Association of Chartered Certified Accountants. (2021). Narrowing the audit expectation gap is essential for a resilient global financial reporting ecosystem. https://www.accaglobal.com/gb/en/news/2021/october/Audit-expectation-gap.html [Google Scholar] [Crossref]

3. Ahuja, R. (2010). Research methods. Rawat Publications. [Google Scholar] [Crossref]

4. American Accounting Association. (1973). A statement of basic auditing concepts. Accounting Review, 48(Suppl.), 1–69. [Google Scholar] [Crossref]

5. Arens, A. A., Elder, R. J., & Beasley, M. S. (2013). Auditing and assurance services: An integrated approach (14th ed.). Pearson Education. [Google Scholar] [Crossref]

6. Arens, A. A., Elder, R. J., & Beasley, M. S. (2017). Auditing and assurance services: An integrated approach (15th ed.). Pearson Education. [Google Scholar] [Crossref]

7. Astolfi, P. (2021). Did the international financial reporting standards increase the audit expectation gap? An exploratory study. Accounting in Europe, 18(2), 166–195. https://doi.org/10.1080/17449480.2020.1865549 [Google Scholar] [Crossref]

8. Bjuggren, P.-O., Duggal, R., & Giang, D. T. (2012). Ownership dispersion and capital structures in family firms. Journal of Small Business & Entrepreneurship, 25(2), 185–200. [Google Scholar] [Crossref]

9. Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77–101. https://doi.org/10.1191/1478088706qp063oa [Google Scholar] [Crossref]

10. Braun, V., & Clarke, V. (2012). Thematic analysis. In H. Cooper (Ed.), APA handbook of research methods in psychology (Vol. 2, pp. 57–71). American Psychological Association. [Google Scholar] [Crossref]

11. Chrisdinawidanty, Z. N., & Tugiman, H. (2016). The effect of auditor ethics and audit fees on audit quality. E-Proceeding of Management, 3(3), 3466–3474. [Google Scholar] [Crossref]

12. Coffee, J. C., Jr. (2001). The rise of dispersed ownership: The roles of law and the state in the separation of ownership and control. Yale Law Journal, 111(1), 1–82. [Google Scholar] [Crossref]

13. Costello, T. M. (2016). Hume [Book review]. Journal of Scottish Philosophy, 14(2), 165–170. [Google Scholar] [Crossref]

14. DeFond, M. L., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2–3), 275–326. https://doi.org/10.1016/j.jacceco.2014.09.002 [Google Scholar] [Crossref]

15. Deepal, A. G., & Jayamaha, A. (2022). Audit expectation gap: A comprehensive literature review. Asian Journal of Accounting Research, 7(3), 308–319. https://doi.org/10.1108/AJAR-10-2021-0202 [Google Scholar] [Crossref]

16. Ebimobowei, A., & Kereotu, O. J. (2011). Role theory and the concept of audit expectation gap in South-South, Nigeria. Current Research Journal of Social Sciences, 3(6), 445–452. [Google Scholar] [Crossref]

17. El-Deeb, M. S. (2015). Disclosure attributes impact of corporate governance. Erlangga Publisher. [Google Scholar] [Crossref]

18. Ellul, L., & Scicluna, A. (2022). An analysis of the audit expectation gap in the Maltese central government. Public Money & Management, 42(4), 262–273. https://doi.org/10.1080/09540962.2022.2034271 [Google Scholar] [Crossref]

19. Fama, E. F., & Jensen, M. C. (1983). Agency problems and residual claims. Journal of Law and Economics, 26(2), 327–349. [Google Scholar] [Crossref]

20. Flick, U. (2014). An introduction to qualitative research (5th ed.). SAGE Publications. [Google Scholar] [Crossref]

21. Gerged, A. M., & Agwili, A. (2020). How does corporate governance affect firm value and profitability? International Journal of Business Governance and Ethics, 14(2), 144–165. [Google Scholar] [Crossref]

22. Gerged, A., & Elheddad, M. (2020). How can national governance affect education quality in Western Europe? International Journal of Sustainability in Higher Education, 21(3), 413–426. [Google Scholar] [Crossref]

23. Guy, D. M., & Sullivan, J. D. (1988). The expectation gap auditing standards. Journal of Accountancy, 165(4), 36–46. [Google Scholar] [Crossref]

24. Haruna, A. L., & Hoesada, J. (2020). The effect of auditor competence, independence, task complexity and audit fee on audit quality. Research Journal of Finance and Accounting, 11(10), 121–126. [Google Scholar] [Crossref]

25. Hassan, A., Roberts, L., & Atkins, J. (2020). Exploring factors relating to extinction disclosures. Business Strategy and the Environment, 29(3), 1419–1436. [Google Scholar] [Crossref]

26. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. [Google Scholar] [Crossref]

27. Khlif, H., & Souissi, M. (2010). The determinants of corporate disclosure: A meta-analysis. International Journal of Accounting & Information Management, 18(3), 198–219. [Google Scholar] [Crossref]

28. Liggio, C. D. (1974). The expectation gap: The accountant’s legal Waterloo. Journal of Contemporary Business, 3(3), 27–44. [Google Scholar] [Crossref]

29. Nwaobia, A., Kwarbai, J., Jayeoba, O., & Ajibade, A. (2016). Financial reporting quality and investors’ decisions. International Journal of Economics and Financial Research, 2(11), 140–147. [Google Scholar] [Crossref]

30. Pierce, J., & Jussila, I. (2011). Psychological ownership and the organisational context. Edward Elgar Publishing. [Google Scholar] [Crossref]

31. Porter, B. (1993). An empirical study of the audit expectation-performance gap. Accounting and Business Research, 24(93), 49–68. [Google Scholar] [Crossref]

32. Porter, B., Óhógartáigh, C., & Baskerville, R. (2012). Audit expectation-performance gap revisited: Evidence from New Zealand and the United Kingdom in 2008. International Journal of Auditing, 16(2), 101–129. [Google Scholar] [Crossref]

33. Quick, R. (2020). The audit expectation gap: A review of the academic literature. Maandblad Voor Accountancy en Bedrijfseconomie, 94, 5–25. https://doi.org/10.5117/mab.94.47895 [Google Scholar] [Crossref]

34. Robson, C., & McCartan, K. (2015). Real world research (4th ed.). Wiley. [Google Scholar] [Crossref]

35. Ruhnke, K., & Schmidt, M. (2014). The audit expectation gap: Existence, causes, and the impact of changes. Accounting and Business Research, 44(5), 572–601. [Google Scholar] [Crossref]

36. Salehi, M. (2011). Audit expectation gap: Concept, nature and trace. African Journal of Business Management, 5(21), 8376–8392. [Google Scholar] [Crossref]

37. Saunders, M., Lewis, P., & Thornhill, A. (2015). Research methods for business students (7th ed.). Pearson Education. [Google Scholar] [Crossref]

38. Setiyawati, H., Hidayah, N., Rahmatika, D. N., & Indriasih, D. (2020). The factors that affect the quality of financial reporting. International Journal of Economics and Management Studies, 7(1), 33–39. [Google Scholar] [Crossref]

39. Shoucair, S. (2020). The audit expectation-performance gap: An empirical study. [Unpublished doctoral dissertation]. [Google Scholar] [Crossref]

40. Soetan, T., & Lawal, B. (2018). Corporate governance and the quality of financial reports: A literature review. International Journal of Accounting and Financial Reporting, 5(1), 1–12. [Google Scholar] [Crossref]

41. Spens, K. M., & Kovács, G. (2006). A content analysis of research approaches in logistics research. International Journal of Physical Distribution & Logistics Management, 36(5), 374–390. [Google Scholar] [Crossref]

42. Suddaby, R. (2006). What grounded theory is not. Academy of Management Journal, 49(4), 633–642. [Google Scholar] [Crossref]

43. Van Maanen, J. (1979). The fact of fiction in organizational ethnography. Administrative Science Quarterly, 24(4), 539–550. [Google Scholar] [Crossref]

44. Zeff, S. A. (1970). The rise of the accounting profession: From technician to professional, 1896–1936 [Book review]. Business History Review, 44(3), 416–417. [Google Scholar] [Crossref]

• Empowering SME Performance Through Social Media: The Mediating Role of Entrepreneurial Orientation in Malaysian Manufacturing SMEs
• Effective School Bullying Prevention Strategies: A Thematic Review
• Impact of Workplace Conflict on the Operational Performance of Deposit Money Banks in Enugu State.
• Towards Digital Financial Solutions: A Conceptual Model of SME Strategies and Strategic Development
• Effect of Work-Life Balance and Affective Commitment on Employee Performance in the Hotel Industry in Plateau State