BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The difference between what the public thinks the accountant is not doing and what the accountant knows they don’t do.
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The difference between what the public thinks the accountant should do and what Congress says the accountant should do.
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The difference between what the public thinks the accountant should do and what the accountant thinks they can do.
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The difference between what the accountant should do and what the Courts say the accountant should be doing.
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Detailed explanation-1: -Answer and Explanation: Explanation for correct option: The expectation gap is the difference of opinion between the accountant and the public about the role and responsibilities of an accountant. Public opinion about work performed by an accountant is different from accountant opinion about their job performance.
Detailed explanation-2: -The audit expectation gap is a term used to describe the difference between what the general public expects from an audit, and what a financial audit actually involves. That’s not to say that the expectation gap is purely a lack of knowledge about the auditing process.
Detailed explanation-3: -Written documents of this nature explain that detecting and preventing fraud is the role of company management, as auditors will only find the irregularities that materially impact financial statements. Overall, clear communication is the best way to close the expectation gap.
Detailed explanation-4: -What is the profession doing to try to close this gap? The expectations gap is the difference between what people think accountants should be doing and what accountants think they can do. It is a difficult gap to close. The accounting profession recognizes it must play an important role in narrowing this gap.
Detailed explanation-5: -The expectations gap is the difference between the financial information provided by the management and the information expected by various users, such as investors, banks, etc., to be contained in the entity’s financial statements.