The Role of Audited Voluntary Disclosures in Reducing Auditing Expectations Gap

• In Event: Continental Breakfast & Research and Education Forum
  In Paper Session: Table 9: Auditor Response to Risk

Abstract

The paper is concerned with the role of voluntary corporate disclosure (thereafter VCD) in reducing the information expectations gap (thereafter IEG) and auditing expectations gap (thereafter AEG). It argues that the lack of credibility of VCD would impact the effectiveness of reducing the IEG and AEG. Therefore, it argues that VCD requires assurance by an independent third party. This kind of assurance service is more appropriate to be provided by auditors. This in turn would expand their roles and responsibilities leading to raising the degree of stakeholders’ satisfaction and approaching their expectations leading to the reduction of the AEG between auditors and users. Therefore, the study provides a theoretical framework of evidences that support this argument. Also the paper empirically examines the perceptions of auditors, bankers, investors and academics towards the usefulness of VCD in reducing the AEG.

Author

• Amir Michael, Durham University (UK)