Publication Year



Accounting, audit report, communications, investing, expectations and responsibilities


Accounting | Business


The audit report is the mechanism through which auditors communicate their responsibilities, processes, and opinions to investors and other users of financial statements. Lack of user understanding of the audit report has contributed to the "expectation gap," which was described by the Auditing Standards Board (ASB) of the American Institute of Certified Accountants (AICPA) in 1970 as "the disparity between what the public and financial statement users believe auditors themselves believe their responsibilities are." The expectation gap is of interest and concern to auditors because it could be an underlying cause of auditor litigation and because it may affect users' perceptions of the value added to financial statements by the audit process. Because the audit report is often the sole document presented by auditors to users, it is imperative that this communication clearly convey the message intended by auditors.

This study examined whether changes to the standard audit report could improve auditor communications with investors.

Department 1 Awarding Honors Status