Abstract:
The primary aim is to find out the audit expectation gap between academics and
auditors in Sri Lanka. The four main concepts and applications of the audit were
tested in this study. They are the auditor’s responsibilities, audit reliability, key audit
matters (KAM) & auditing standards (AS), and usefulness of audited financial
statements for decision-making. The population of the study is public university
academics in the field of accounting and finance, and independent external auditors
in Sri Lanka. The researcher used a developed Likert five-point scale questionnaire
to collect data from academics and auditors for the study. The developed
questionnaire was distributed among 100 academics and external auditors, and 64
responses were received in this study. Descriptive and inferential analyses were
performed in this study. Descriptive statistics confirmed that there is an expectation
gap between academics and auditors in Sri Lanka. ANOVA and independent sample
test confirmed that there is an expectation gap between academics and students, but
there is no significant expectation gap. They have a high level of expectation gap
regarding key audit matters and auditing standards application, on the other hand,
they have a low level of expectation gap on audited financial statements usage in
decision making when compare to standard or expected. There is a high level of
expectation gap regarding the key audit matters and auditing standards application
between auditors and academics in Sri Lanka, however, there is a low level of
expectation gap regarding audit reliability between auditors and academics in Sri
Lanka. The results of the study highlight that there is audit expectation between
auditors and academics in Sri Lanka. They are the fillers of auditing theories and
practices in Sri Lanka, therefore regulatory bodies and accounting professional
institutions ought to be taken some effective and efficient actions to create better
awareness of auditing and ensure adequate auditing education in Sri Lanka for the
sustainability of firms and the economy of the country.
