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The Impact of the Pandemic of Covid-19 on the 'Audit Expectation Gap' - The Case of India

Kittur, Asha Harshavardhan LU and Samniashvili, Salome LU (2022) BUSN79 20221
Department of Business Administration
Abstract
The purpose is to explore the impact of the Covid-19 pandemic on the AEG by exploring the
perceptions of two groups namely, (i) auditors and (ii) the users of the audited financial
statements. This research is conducted in the Indian context, meaning the participants of this
study are Indian Chartered Accountants and users of financial statements.
The analysis of the findings of this study suggests that the audit expectation gap (AEG) existed
in India during the pre-pandemic period and it has been widened further by the pandemic.
Porter’s (1996) AEG model suggests that there has been a deficient performance by the
auditors, and also the users have excessive unreasonable expectations arising from the risk perception
of the financial... (More)
The purpose is to explore the impact of the Covid-19 pandemic on the AEG by exploring the
perceptions of two groups namely, (i) auditors and (ii) the users of the audited financial
statements. This research is conducted in the Indian context, meaning the participants of this
study are Indian Chartered Accountants and users of financial statements.
The analysis of the findings of this study suggests that the audit expectation gap (AEG) existed
in India during the pre-pandemic period and it has been widened further by the pandemic.
Porter’s (1996) AEG model suggests that there has been a deficient performance by the
auditors, and also the users have excessive unreasonable expectations arising from the risk perception
of the financial crisis created by the pandemic. However, the analysis of the
underlying reasons behind such impact of the pandemic on the AEG shows that the major
contributor to this gap is the users and their unreasonable expectations. Also, the auditors faced
numerous professional and personal challenges due to the changes brought by lockdowns and
social distancing, which may have impacted the audit quality to some extent. But, with the
support from the regulator, ICAI, in terms of guidance and training, they found alternate ways
to conduct the audit procedures and put significant efforts to keep up the audit quality. The
users, on the other hand, driven by the fear and uncertainty of a pandemic, developed
unreasonable expectations from auditors demanding a higher level of assurances owing to the
risk of fraud and misstatements arising during the pandemic. The users believe that both the
auditing standards and auditor performance did not evolve to suit the needs and concerns of
the pandemic, but rather stayed stagnant, causing the overall expectation gap to widen further. (Less)
Please use this url to cite or link to this publication:
author
Kittur, Asha Harshavardhan LU and Samniashvili, Salome LU
supervisor
organization
course
BUSN79 20221
year
type
H1 - Master's Degree (One Year)
subject
keywords
Auditors, Users, ICAI, Audit, Expectation gap, Agency theory, Role theory, Attribution theory, Covid-19, Pandemic, India.
language
English
id
9088305
date added to LUP
2022-09-19 14:40:22
date last changed
2022-09-19 14:40:22
@misc{9088305,
  abstract     = {{The purpose is to explore the impact of the Covid-19 pandemic on the AEG by exploring the
perceptions of two groups namely, (i) auditors and (ii) the users of the audited financial
statements. This research is conducted in the Indian context, meaning the participants of this
study are Indian Chartered Accountants and users of financial statements.
The analysis of the findings of this study suggests that the audit expectation gap (AEG) existed
in India during the pre-pandemic period and it has been widened further by the pandemic.
Porter’s (1996) AEG model suggests that there has been a deficient performance by the
auditors, and also the users have excessive unreasonable expectations arising from the risk perception
of the financial crisis created by the pandemic. However, the analysis of the
underlying reasons behind such impact of the pandemic on the AEG shows that the major
contributor to this gap is the users and their unreasonable expectations. Also, the auditors faced
numerous professional and personal challenges due to the changes brought by lockdowns and
social distancing, which may have impacted the audit quality to some extent. But, with the
support from the regulator, ICAI, in terms of guidance and training, they found alternate ways
to conduct the audit procedures and put significant efforts to keep up the audit quality. The
users, on the other hand, driven by the fear and uncertainty of a pandemic, developed
unreasonable expectations from auditors demanding a higher level of assurances owing to the
risk of fraud and misstatements arising during the pandemic. The users believe that both the
auditing standards and auditor performance did not evolve to suit the needs and concerns of
the pandemic, but rather stayed stagnant, causing the overall expectation gap to widen further.}},
  author       = {{Kittur, Asha Harshavardhan and Samniashvili, Salome}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The Impact of the Pandemic of Covid-19 on the 'Audit Expectation Gap' - The Case of India}},
  year         = {{2022}},
}