An Investigation of Audit Expectation Gap in the Malaysian Public Sector


Murugan Batumalai
Maheran Zakaria
Wan Zurina Nik Abdul Majid
Paramasivan S/O Nadeson

The Audit Expectations Gap (AEG) has arisen due to the difference between the public and auditor's perceptions about the auditor's duties and responsibilities. AEG is indeed an evolving concern that has gained worldwide interest. However, the broader the AEG, the higher the likelihood that the public will distrust the auditors, and even worse, it could arise lawsuits and thus jeopardize their reputation. Although auditors in the public sector hold greater responsibilities, most AEG's studies have focused on the private sector. Fascinated by the phenomenon, the objective of this study is to investigate the existence of audit expectation gaps in the Malaysian public sector. The researchers investigated the AEG concerning three audit concepts: performance audit, auditor's independence, and auditor's responsibilities in detecting and disclosing fraud. Based on purposive sampling, the researchers selected and interviewed 17 informants composed of eight auditors from the public sector and non-auditing professionals, comprising three Public Account Committee (PAC)'s members, three academicians, and three journalists. Employing Nvivo 12 software, the results indicated the existence of AEG between public sector auditors and non-auditing professionals over the three audit concepts. The discoveries support the theory of inspired con􀅫idence, stating that although auditors cannot betray the public expectation, the expectations cannot exceed what the audit can justify. Indeed, a concerted effort by all parties is crucial to mitigate the audit expectation gaps between the perceived performance of auditors and the unreasonable expectation of the public towards the profession. Hence, educating the auditing stakeholders on the statutory and professional roles of auditors will narrow down the gap, elevate the auditors' credibility and thus be relevant to society.


Keywords: Expectation, Audit, Gaps, Auditor, Public, Performance

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