Abstract
<p class="MsoBlockText" style="margin: 0in 0.5in 0pt;"><span style="font-style: normal; font-size: 10pt; mso-bidi-font-style: italic;"><span style="font-family: Times New Roman;">In 1988, the Auditing Standards Board released nine standards intended to narrow the previously identified &ldquo;expectation gap&rdquo;&mdash;a gap between the expectations of financial statement users and certified public accountants (&ldquo;Expectation Gap I&rdquo;).<span style="mso-spacerun: yes;">&nbsp; </span>A 1992 study of auditor perceptions of two of those standards dealing with errors, irregularities, and illegal acts of clients, revealed that there existed a second expectation gap, one between the standard setters and practicing CPAs (&ldquo;Expectation Gap II&rdquo;). Since then, the ASB has released two successor statements intended to address the issue of auditors&rsquo; responsibility to consider fraud in a financial statement audit.<span style="mso-spacerun: yes;">&nbsp; </span>This study examines auditor perceptions of the more recent pronouncement and reveals general skepticism among respondents regarding its effectiveness in promoting Congressional and public confidence in the auditing profession; i.e., little confidence that it will serve to reduce Expectation Gap I.<span style="mso-spacerun: yes;">&nbsp; </span>It also reveals the continued existence of Expectation Gap II.<span style="mso-spacerun: yes;">&nbsp;&nbsp; </span></span></span></p>
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