Determinants of Audit Expectation Gap: Evidence from Limited Companies in Kenya

Abstract: The role of the auditor is to provide objective assurance as to whether the books of accounts and the resulting financial statements portly a true and fair view. Public and in particular users of accounting information however has high expectations from auditor in comparison with the actual auditor’s role thus giving rise to audit expectation gap. Expectation gap may be defined as the difference between what the public as well as financial statement users believe auditors are responsible for and what auditors actually believe their responsibilities are. The literature suggests a number of factors which affects the audit expectation gap. The researcher collected data from audit firms in Kenya. The data collected was subjected to multiple linear regression and correlation analysis with an aim of testing hypotheses and make conclusions on the determinants of audit expectation gap among companies in Kenya. The study found out that some factors suggested by the literature significantly affected the audit expectation gap among companies in Kenya. The rest of the factors tested were found not to have a significant effect on the audit expectation gap.