Audit Expectation‐Performance Gap in the United Kingdom in 1999 and Comparison with the Gap in New Zealand in 1989 and in 1999

Citation

Vinten, G. (2005), "Audit Expectation‐Performance Gap in the United Kingdom in 1999 and Comparison with the Gap in New Zealand in 1989 and in 1999", Managerial Auditing Journal, Vol. 20 No. 5, pp. 561-562. https://doi.org/10.1108/02686900510598902

Despite the unwieldy title, with these two writers, one knows one is in for a treat. The focus of the text is on the UK, with New Zealand as a backdrop with the purpose of highlighting issues in the UK. One does wonder why worthy 1999 research has taken so long to be published, and the references have been barely updated to cover the intervening period. Indeed the references as a whole are less full than they might be.

The authoritative Porter definition is that the audit expectation‐performance gap is that between: society's expectations of auditors; and second, auditors' performance as perceived by society. The gap comprises two major components:

1. 1.

   the “reasonableness gap” – the gap between what society expects of auditors and what auditors can reasonably be expected to accomplish; and

2. 2.

   the “performance gap” – the gap between what society can reasonably expect of auditors and what it perceives they deliver. This may be subdivided into:

   • •

     the “deficient standards gap” – the gap between the responsibilities society reasonably expects auditors to perform and auditors' actual responsibilities, as defined by statute, case law, regulations and professional promulgations; and

   • •

     the “deficient performance gap” – the gap between the expected standard of performance of auditors carrying out these responsibilities and auditors' actual performance of those duties.

To this needs to be added the “knowledge gap” of the various interest groups. Matched up with the 51 suggested duties of auditors, we find auditors 18 per cent incorrect or uncertain. The authors tend to gloss over this, but any zero defects approach would be horrified at a figure approaching 20 per cent and wonder about the efficacy of university, professional and in‐house training; 20 per cent would seem more than sufficient to permit an Enron coach and horses to be driven through. The immediate beneficiaries of auditees and the financial community seem similarly clustered at 31 per cent and 38 per cent ignorance respectively. When it comes to the non‐financial group, the figure hits 52 per cent, so there is plenty of scope here for ill‐conceived perception gaps as well as those well founded.

The extent of the audit expectation‐performance gap in the UK and New Zealand in 1999 is quite similar, although the breakdown into the sub‐components differs significantly. The quasi‐longitudinal position in New Zealand 1989 to 1999 is salutary. While auditor performance has improved such as to narrow the performance gap, society expectations have increased, more than offsetting the improvement, so “nulle points” on this one. There is considerable data to be mined in this fascinating compendium, which one can warmly recommend.