Influence of Self-Regulatory Policy of Auditing Profession on Audit Expectation Gap: A Qualitative Methodological Approach

Onulaka Paul N. and Samy Martin
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Samy Martin: Department of Accounting, Faculty of Business and Law, Leeds Beckett University Leeds, Leeds, UK

Mediterranean Journal of Social Sciences, 2017, vol. 8, issue 1, 96-104

Abstract: This study examined the influence of self-regulation of auditing profession on audit expectation gap (AEG) in Nigeria with particular reference to respective perceptions of audit partners and pension fund administrators. The motivation for embarking on this exploratory research is born out of many years concern over the speedy erosion of confidence in the auditing profession after the collapse of many blue chip companies in Nigeria to which the external auditors were given ‘clean bill of health’ shortly before their demise. The theoretical framework adopted for this study was role theory propagated by Porter in her earlier study. This study also adopts the interpretivist or post-positivist epistemological approach. As exploratory study, semi-structured face-to-interview method was used for data collection. After the transcription of the recorded tape, a thematic data analysis method was used to analyse the data. The outcome of the study indicates that self-regulatory policy influenced the auditing standard setting. It was also found that some outdated provisions in the Nigerian company Act on appointment, remuneration and removal of external auditors contributed largely to audit expectation gap in Nigeria. This research responds to the need for a government intervention on auditing standard setting and establishment of transparently independent oversight body for auditing standard setting distinct from the present Financial Reporting Council that adopt auditing standards produced by the Institute of Chartered Accountants of Nigeria.

Keywords: Self-regulation; Qualitative Method; Audit expectation gap; Nigeria (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:mjsosc:v:8:y:2017:i:1:p:96-104:n:66

DOI: 10.5901/mjss.2017.v8n1p96

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