Revisors udfordringer med revisionspåtegningen: Forventningskløften ved regnskabsbrugers forventninger til revisors going concern vurdering

Ane Sachs Aasand

Student thesis: Master thesis

Abstract

During the last couple of years there has been a global financial crisis. The crisis has resulted in a great increase in bankruptcies. In Denmark the number of bankruptcies in 2010 increased with 13.3 % compared to 2009, and was at it highest in the end of 2010. As an effect of the increase in bankruptcies the media has focused on the companies’ ability to comply with the going concern condition. The media’s focus on the going concern condition has visualized the expectation-gab between the auditors and the financial statements user. The going concern condition is one of the conditions, that the auditor always shall asses before they can obtain a reasonable assurance whether the financial statement are free from material misstatement, and thereby express an opinion on the financial statement. The requirements to the auditor, regarding collecting auditing evidence and whether the collected evidence is sufficient to approve the financial statement, is outlined in the Danish “Revisionsvejledninger”. Because it is requirements to the auditor, it cannot be expected that the user of the financial statement has sufficient knowledge with these, to being able to form the right expectations concerning the work the auditor have to perform according to the “Revisionsvejledninger”. The consequence of the users of the financial statements the missing knowledge is that there is a significant risk for the users forming wrong expectations, and thereby the expectation-gab occurs. The main object of this dissertation is to analyze the opportunity to reduce the expectation-gab concerning the financial statement users’ understanding of the work the auditors perform to being able to provide the financial statement with an auditor’s opinion without modifications. To support the analysis the dissertation will give a profound review of relevant theory, during the review the dissertation will draw out some hypotheses that will form the basis for the analyze. Chapter two generally describes the concept of going concern and what Danish legislation the auditor is subject to. The same chapter outlines the importance of the company’s ability to comply with the going concern condition and when the going concern assessment should be performed. Chapter three is focused on the subsistence of auditing through the principal/agent theory. Furthermore this chapter goes through the different types of reports the auditor can use including how the auditor can modify their report with qualification, at the same time the chapter deals with the managements and auditors responsibilities. Chapter four describes the expectation-gab theory and introduces the term expectation-performance gab. By adding the performance approach to the expectation-gab it visualizes that the expectationgab is split between what the society expect of the auditor and what their actual perception of the auditors’ performance is. At the same time the split will visualize who the effort to reduce the expectation- gab should be performed against. The result of the analysis visualizes the expectation-gab between the auditor and the user of the financial statement. The analysis makes clear that the expectation-gab is dual gab that consists of both an expectation and performance part. By identifying the two parts it becomes possible to focus the effort to reduce the gab. The need for this focus occurs because it is different kind of work that has to be performed to reduce the two parts. The expectation part consists of inconsistencies of the audit performance between the users of the financial statement and the auditor. One of the ways to reduce this part can be to change legislation so it will be easier to understand, and gives the auditor more communication options. The performance part consists of the users misunderstanding of what the auditors’ responsibility is and what work there have to be performed to meet the requirements for auditors role. To reduce this part, auditor has to educate the users of the financial statements, and thereby effect their formation of expectations.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2011
Number of pages115