Forventningskløften i revisionsbranchen: Hvordan implementering og opdatering af internationale revisionsstandarder, herunder ISA 600 (RE), øger offentlighedens tillid til revisors arbejde

Abstract

The expectation gap within the auditing profession is a common issue that has existed for years. The gap is referred to as the difference between what the public expects from auditors and what auditors perform in their work. The responsibility of an auditor is to build trust in the profession by being a public representative. Preserving trust is a fundamental aspect of the auditing profes-sion as stakeholders rely on the work performed on financials statements expressed in the audi-tor’s opinion. Usually, the gap is a result of a lack of knowledge of the work performed by an auditor. Commonly the gap is most visible in connection with cases when auditors’ work is questioned typically seen in cases of fraud or when companies go bankrupt. This thesis is built on the study of the expectation gap by Bent Warming-Rasmussen in 1990. At the time of his study the trust of auditors had decreased significantly as seen in a study per-formed by IAM in 1985. The IAM study showed that 45% of executive members had lost their trust in the auditor’s opinion. The lack of trust was a direct result of lack of insight into the re-quirements of an auditor in connection with fraud or bankruptcy. In an article of FSR in 2019 Bent Warming-Rasmussen and Kim Klarskov Jeppesen argued that the expectation gap still ex-ists, but maintaining auditing standards can be a useful way of ensuring that the gap does not become too wide. The focus of this thesis is to verify that regular updates of auditing standards are ensuring trust to the stakeholders and work as a preventive solution against the expectation gap. More specifi-cally this thesis will focus on IAASB’s work with implementation of auditing standards and the process behind the implementation. Furthermore, this thesis explores whether changes to the recently revised ISA 600 on special considerations on audits of Group Financial Statements are aligned with public interest. Through an interview with an IAASB representative and a survey conducted with relevant stakeholders as investors, business owners and general users of the auditing services this thesis explores indication on how auditing standards overall are meeting the expectations of the public. This thesis concludes that the trust is high and that the audit service is in line with the expecta-tions of the respondents. Although there is a high level of trust the findings show that more trust can be built with more transparency and communication. The level of knowledge and awareness of the auditing standards are low among the non-auditors, even though most agree that regularly maintaining standards is equivalent to more trust. The respondents find IAASB’s work with im-plementation to be good, however a lot of the respondents are not aware of the possibility of contributing to a new standard. Findings show that more communication of this can possibly create a sense of inclusion that can build more trust even though it might not change the out-come of the process. Furthermore, it is concluded that auditing standards are formulated com-plex even for auditors resulting in a demand of easier to read version of the standards, which distributed on an on-going basis could minimize expectation gaps.

A master thesis from Aalborg University

Forventningskløften i revisionsbranchen: Hvordan implementering og opdatering af internationale revisionsstandarder, herunder ISA 600 (RE), øger offentlighedens tillid til revisors arbejde

[Expectation gap in the audit profession]