Forventningskløften og IAASB’s revision af ISA 700

Christian Søeborg

Student thesis: Master thesis


This thesis deals with the expectation gap that has come to exist between auditors and financial users. As a result of the financial crisis, it has become obvious that the expectation gap between auditors and financial users has risen to a high level. It has therefore been the response of The International Auditing and Assurance Standards Board (IAASB) to perform a revision of the ISA 700 that deals with auditors reporting. The purpose of the revision is to add more communicative value to the auditor reporting. As of such, the IAASB intends to add several new elements to the auditor report which includes auditor commentaries and comments about going concern. The purpose is to highlight key findings in the audit to further enlighten the financial users. In my analysis I identify the expectation gap and the elements it consist of as well as identify key elements of the audit process. I try to determine whether or not the revision of ISA 700 effectively aims to reduce the expectation gap. I determine that it is through understanding of the audit process that the expectation gap can be reduced. I come to the conclusion that the revision of ISA 700 has failed due to the fact that it clearly neglects to aim at reducing the expectation gap. Instead the new auditor report will consist of further standard language, which has no value to the financial user. There is no attempt to enlighten the financial user about the actual work auditors do. I make a critical judgement of the IAASB and come to the conclusion that they are not acting in the interest of the financial user, but instead aim to please both auditors and management.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2013
Number of pages90