Definition of audit expectation gap

The difference between the actual and expected performance of an auditor. According to the the American Institute of Certified Public Accountants (AICPA) in 1992, the expectation gap could be defined as "the difference between what the public and financial statement users believe auditors are responsible for and what auditors themselves believe their responsibilities are.


In 1974, Liggio is the first to define the expectation gap as the difference between the actual and the expected performance. This definition is extended by the Cohen Commission on auditors responsibilities in 1978, where the expectation gap is represented by the gap between the public expectations and needs, and the expected accomplishment of the auditors.

On the other hand, Monroe and Woodliff in 1993 defined the expectation gap as the difference between the beliefs of auditors and those of the public concerning the auditors’ responsibilities and duties.

Jennings et al. in 1993 argued that the expectation gap represents the difference between the public expectations about the responsibilities and duties of the auditing profession and what the auditing profession actually provides.

Porter in 1993 defined the 'expectation-performance gap' as the gap between the expectations of society about auditors and the performance of auditors.


Regulators and standard setters usually propose a change in regulation following a particular event. Recently, the financial crisis was the trigger for regulators and standard setters to revisit the audit report (e.g., IOSCO 2009, EC 2010, IAASB 2011, PCAOB 2011).

While narrowing the audit expectation gap has been the main objective of previous changes to the audit report (e.g revised ISA 700), currently the focus is placed on narrowing the information gap. As explained in the IAASB consultation paper (2011), the expectation gap relates to the "difference between what users expect from the auditor and the financial statement audit, and the reality of what an audit is”, while the information gap relates to “the existence of a gap between the information they [users] believe is needed to make informed investment and fiduciary decisions, and what is available to them through the entity’s audited financial statements or other publicly available information". [1]

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