Microsoft Word - 2020-8089-1-SP-writer2-new An Receive doi:10.5 Abstra Purpos countrie widespr expecta detectin investig Taiwan Design/ percept Investi ed: June 28, 5296/ajfa.v5 ct se – Corpor es and Taiw read mistru ation gap—t ng corporate gates how au . /methodolo ions on frau igation Ch Departm Departm School U , 2012 A 5i1.2020 rate fraud is wan as well. ust and criti the gap betw e fraud, as uditors and ogy/approa ud, using qu of Aud Detect hih-Shun Hs ment of Acc New T E-mail: cs Fa ment of Acc New T E-mail: ku K l of Accoun University o Toow E-mail: j Accepted: S URL: h s an issue th As a result icism. It is ween the us perhaps ev users perce ach – A tot uantitative a 30 ditors’ R tion in T su (Correspo counting, T Taipei City, shsu@mail. an-Hua Kun counting, T Taipei City, ung@mail.t Kieran Jame nting, Econo of Southern woomba, Au jamesk@us eptember 1 http://dx.doi hat has beco t, external a s premised sers’ expect videnced in eive the aud tal 964 res analysis app Asian Respon Taiwan onding auth Tamkang Un Taiwan tku.edu.tw ng Tamkang Un Taiwan tku.edu.tw es omics and F n Queenslan ustralia sq.edu.au 3, 2012 i.org/10.529 ome increas uditors in th that this is tations of au audited fin ditors’ respo spondents w proach. n Journal of F nsibility n hor) niversity niversity Finance, d Published: 96/ajfa.v5i1 singly preva hese countri s a manifes uditors and nancial state onsibility fo were survey Finance & Ac ISSN 19 2013, Vol. www.macrothi y for Fr June 1, 201 .2020 alent in the ries continua station of th d their actua tements. Th or fraud dete yed regardi ccounting 946-052X 5, No. 1 ink.org/ajfa raud 13 western ally face he audit al role in his study ection in ng their Finding corpora materia believed surveye fair view designe Origina Taiwan bankers to our u Keywo gs – The f ate fraud. Th al fraud du d that audit ed groups th w of financ ed for such d ality/value , especially s. This pape understandin rds Audit e findings ind he auditors uring an au tors should hat auditors cial stateme detection. – The find y company er fills a voi ng of fraud expectation dicate that strongly di udit, compa be responsi should wo nts, or for f dings have i y directors id in researc in Taiwan. gap, Audito 31 a gap exi isagreed tha ared with t ible. Howev ork to detect fraud detec important i and mana ch in this a ors’ respons Asian ists on aud at they were the non-au ver, there w t fraud that ting only w mplications agers, finan rea and mak sibilities, Fr n Journal of F ditors’ respo e responsib ditor group was a genera materially when the aud s for audito ncial analys kes an inter aud detectio Finance & Ac ISSN 19 2013, Vol. www.macrothi onsibility to ble for detec ps’ which al consensu affects the dit was spe ors and the sts, investo resting cont on, Taiwan ccounting 946-052X 5, No. 1 ink.org/ajfa o detect cting the strongly us by the true and cifically users in ors, and tribution Introdu The rol the fina of fraud Porter, professi manage compet Sikka e because negotiat of respo 1980s. such as AICPA and Ma indeed recomm emphas (Porter, This stu audit. U to Cons manage order to stateme recogni assuran public i corpora auditors 1997). Internat about th duties ( Koh and Howeve issues s now bei (Huang respons uction e of auditin ancial statem d detection 1997). The ion resulted e the inter ing public d et al. (1998) e the socia tion and the onsibility fo Efforts hav s the US C A (1987); UK acdonald Co suggested t mended a gr size less the , 1997). udy is focu Under the cu sider Fraud ement, but t o have a re ents arising ized the au nce’ is not u in general. ate fraud du s is caused tional litera he auditor’s (i.e., Beck, d Woo, 200 er, few em such as the ing paid to g et al, 199 sibilities and ng had not, ments. This n as an aud e phenomen d from its pu rplay betwe duties and o argued that al context e meaning or detecting ve been ma Cohen Comm K Davison ommission b that auditor radual incre e issue of a sed on the urrent Taiw d in an Audi the auditor easonable a from error ditor’s dete understanda Auditors to uring the au by a lack o ature contrib s responsib 1973; Stee 01; Leung a mpirical surv responsibil the legal lia 98; Tung, d the develo until 1920, is now rega dit objective non of down ursuit of pro een its ow obligations ( t there is no of auditin of audit is c g fraud has ade to narro mission by Report and by CICA (1 rs have an i ease in frau auditors det auditors’ re wanese audi it of Financ is required assurance o r or fraud. ection respo able or sati oday are stil udit process of satisfacto butes much ilities of fra en, 1990; H and Chau, 20 vey studies lity to detec ability issue 1998; and opment of e 32 been to giv arded as the e is indeed nplaying au ofessional ( wn (financi (Humphrey o possibility ng changes changing. P stirred the a ow the exp AICPA (1 Benson Co 1988) in Ca important ro ud detection tecting frau esponsibiliti iting standa ial Stateme to maintain of detecting Although onsibility, t isfactory to ll facing se . It has also ory explana h on the ex aud detectio Humphrey, M 001; Lin an s in Taiwan ct and repo e associated Liu, 2002) expectation Asian ve an opinio e major obje d downplaye uditors’ resp and financi al and bra and Moize y to eliminat s continuou Public critic auditing pro ectation ga 978) and t ommittee by anada (1988 ole in detec n and repor ud as oppos ies to detec rd, SAS 43 ents, the dete n an attitude g material m the accoun the rather v the users rious critici o been supp ations of the xpectations on and the Moizer, and nd Chen, 20 n are availa ort fraud, al d with audit ). Neverthe ns gaps in w n Journal of F on on the tr ective, wher ed (Brown, ponsibilities al) interests and-name) r, 1990; Pow te the auditi usly throug cism of the ofession int p by setting he Treadwa y AICAW ( 8). These w cting corpor rting. It is n ed to audit ct fraud dur : The Audit ection respo e of profess misstatemen nting profes vague mean of financial ism for fail posed that t eir role in s gap, especi public’s pe d Turley, 19 04; Fadzly able on fun lthough incr or negligen eless, the d western coun Finance & Ac ISSN 19 2013, Vol. www.macrothi ruth and fai reas the imp , 1962; Lee s by the acc s and its atte interests a wer 1995). ing expecta gh interacti profession’ to activity s ng up comm ay Commis (1985a and working part rate fraud a noted that t tors reportin ring the tim tor’s Respo onsibility re sional skept nts in the f ssion has g ning of ‘rea al statement ling to detec this problem society (Hu ially on the erception of 993a; Porte and Ahmad ndamental reasing atte nce and audi debate on a ntries, espe ccounting 946-052X 5, No. 1 ink.org/ajfa irness of portance e, 1970; counting empts to and any ation gap ion and ’s denial since the missions, ssion by 1985b); ties have and they hey still ng fraud me of the onsibility ests with ticism in financial gradually asonable ts or the ct major m facing umphrey, e debate f her/his er, 1993; d, 2004). auditing ention is it failure auditors’ cially in the UK professi The pur precise, busines financia respons gap exi auditor’ can be other w The stu emphas previou investig conclus The Au For a lo fraud. I inceptio “stated rather t 1997, p Since th respons busines (Lee, 19 professi its own By the was ac criticism the “gr denial o activitie USA (A Canada consiste even so detectio K and US, ion in Taiw rpose of the , the main f ss environm al statemen sible for”. S isting amon ’s duty to d compared words, we ca udy is struct sizing the au us empirical gation resul sion section uditor Resp ong time, th It is perhap on. The aud audit objec than by a ch p. 15). he 1920s, t sibility to de ss transactio 986). Hump ion’s pursui (financial a end of the ctually deni m of auditor eed-is-good of responsib es to investi AICPA, 197 a (CICA, 1 ently indica ome of the on. Howeve over the l an. e study is to focus of the ment. The st nts and co Such compa ngst Taiwan detect fraud with the re an undertake tured as fol uditor’s res l research. T lts in the f . ponsibility f ere has been ps true to sa ditor’s respo ctive for ove hange in th the accoun etect fraud. ons which m phrey et al ( it of a self-i and brand-n 1960s, frau ied by the rs to assum d” decade o bility for de igate the iss 78, Cohen C 988, McDo ate that the m e auditors t er, the accou last two de provide ad e study is to tudy attemp mpare thei arison inten n’s users. T s and relate esults of the e an interna llows. The s ponsibility The fourth s fifth section for Fraud D n controver ay that the onsibility to er 400 years he demand o ting profes This has be make it une (1993b) and interested ro name) intere ud detection accounting me a broader of the 1980 etecting fra sue. A num Commissio onald Comm majority of themselves, unting prof 33 ecades are dditional evi o investigate pts to surve ir perceptio nds to exam The finding ed audit pro e relevant s ational comp second sect to detect fr section look n. The stud Detection rsy about th role of the o detect frau s and was r of clients o sion has fo een a result economic fo d Power (19 ole and its a ests and any n as an audi g professio r responsibi 0s. Political aud has stirr mber of work on); UK (IC mission). T financial st believe th fession still Asian relevant to idence on th e whether th ey the Taiw ons on “w mine whethe s contribute ocedures. Fu studies carr parison of a tion provide raud. The th ks at the res dy then fini e auditor’s auditor ha ud, as noted removed as of accountin ocused prog t of the incr or the audit 995) attribut attempts to y competing itor’s respon on (Porter, lity for frau l pressures red the aud king commi CAEW, 198 The survey tatement use he auditor h rejects exte n Journal of F o the grow he audit exp here is such wanese aud what auditor r there is an e to our un urthermore, ried out in audit expect es brief hist hird section earch metho ishes with alleged resp as not been d by Willing an objectiv ng firms” (c gressively l ease in size tor to exam te the chang manage the g public duti nsibility wa 1997). Ho ud detection arising fro diting profes issions were 5a, Davison findings o ers and the holds respo ending audi Finance & Ac ISSN 19 2013, Vol. www.macrothi wth of the pectation ga h a gap in T ditors and rs should an audit exp nderstanding , the study other coun tation gaps. torical back n offers a re od, followe the discuss ponsibility t well define gham (1975 ve by the pr cited in Hu less on the e and compl mine all tran ge to the acc e interplay b ies and obli as not assum owever, the n continued om the prof ssion into in re establishe n Committ of the comm general pub onsibility fo itor’s respo ccounting 946-052X 5, No. 1 ink.org/ajfa auditing ap. To be Taiwan’s users of be held pectation g of the findings ntries. In kground, eview of ed by the sion and to detect ed since 5), was a ofession umphrey, alleged lexity of nsactions counting between igations. med and e public through fession’s nitiating ed in the ee); and missions blic, and or fraud nsibility to detec to detec manage It shou circums with the auditor’ has gra detectio “…the plan, pe detectin 18)….. appropr or disco Howeve Bank in missing threaten (1998) respons imposin four add evaluati regulato Neverth auditor’ AU316 skeptici misstate misstate account argues them re In the respect 1987. T respons 2004), manage that ma cting fraud. ct fraud and ement, not o uld be noted stances whe e acknowle ’s acceptanc adually mo on. This can fact that an erform and ng material the audito riate level o over the frau er, compani n UK, etc.), g. Public pr ned regulato suggest that sibilities and ng additiona ditional resp ion of inter ors; and aud heless, the ’s responsib (PCAOB, ism, discus ement due t ement due t ting profess that the aud esponsible fo Taiwanese to the audi Taiwan’s S sibilities. Th is that res ement. How aterial miss This oppos d the respo on the audito d, neverthe ere fraud ma edgement th ce of some oved in the n be seen by audit is car d evaluate t misstateme ors should of managem ud… (para. ies continue , substantial ressure has ory legislati t one of pos d enhancem al responsib ponsibilities rnal control ditor associa accounting bilities. Th , 2002), w ssion amon to fraud, an to fraud. Th sion contin ditors expe for fraud. arena, virt itor’s respon SAS 14 is he core con sponsibilitie wever, audit tatements i sition is refl onsibilities t or of the co eless, that a ay exist. Po hat sound au responsibi e direction y the extract rried out ma their audit w ents in the fi as soon a ment, the boa 41). (APB, ed to collap l fraud cont mounted, p ion (Sikka ssibilities to ment of aud bilities on a s which the systems; c ation with in g profession his is reflec which emph ng engagem nd obtaining he duty on nues to stre ct to minim ually no ch nsibility to the major ncept of Taiw es to preve ors should in the finan 34 ected by the to prevent a ompany” (C auditors are orter (1997) udit proced ility to dete of recogn ts from the U ay, however work in or financial sta as practica ard of direc , 1995)” pse (Enron a tinued to oc parliament et al., 1998 o reduce the ditor indepe auditors with e profession compliance nterim finan n has given cted, under hasize the ment perso g the inform fraud detec ess it is the mize legal l hange has detect fraud r auditing wan’s SAS ent and det plan and p ncial statem Asian e clear state and detect ICA 1988, I e required ) indicates th dures should ect fraud. Si izing incre UK SAS 11 r, act as a d rder to have atements ari able commu ctor or the a and WorldC ccur, and fu members w 8; Dunn and e expectation endence. O h regard to n might cons reporting; d ncial inform n increase the UK IS importanc onnel rega mation neede ction remain e duty of m iability by occurred in d since the standard w 14, in simi tect fraud a erform thei ments arisin n Journal of F ement that “ fraud firml ICAEW 198 to remain hat such req d uncover m ince the 19 eased respo 10 (APB, 19 eterrent (pa e a reasona sing from e unicate the audit commi Com in US, unds continu were critical d Sikka, 19 n gap is exp ’Malley (19 detecting f sider: mana direct repor mation. to the bre SA240 (AP e of exerc arding the ed to identi ns publicly managemen avoiding le n the audit Taiwan SA which regul ilar vein to and errors r audit wor g from frau Finance & Ac ISSN 19 2013, Vol. www.macrothi “the auditor ly rest on c 85). alert to su quirement, major fraud 980s, the pr onsibility fo 995) ara. 17)…. A able expect error or frau eir findings ittee if they BCCI and ued to disap l, and gove 999). Koh a pansion of a 993) also a fraud by sug agement and rting by aud eadth and d PB, 2005) cising prof risks of ify risks of disavowed nt. Vanasco egal claims ting standar AS 14’s ince lates the a US SAS 53 lie with c rk with due ud or error ccounting 946-052X 5, No. 1 ink.org/ajfa was not company uspicious together s, imply ofession or fraud Auditors tation of ud (para. s to the y suspect Barings ppear go ernments and Woo auditor’s agrees to ggesting d auditor ditors to depth of and US fessional material material and the o (1998) holding rds with eption in auditor’s 3 (Chen, company e care so r can be uncover during h Prior to auditor’ to sanct informa Fraudul Procom the US billion) account in losse subsidia the 199 made b avoidin authoriz (USD $ The abo public c respons and the Influenc governm raise CP not pur supervi Taiwan the CPA In Taiw Develop donatio publicat relating efficien public account In Sept debates Auditor red. No resp her/his audi o 2000, the ’s duty to de tions impos ation about lent activiti mp Informati Enron finan fallout roc ting profess es relating aries by Ch 90s, well-kn y its CEO w ng short-term zation, and $330 million ove corpora confidence sibility to de general pub ced by circ ment author PA audit sta rsuing the id sor and ov n CPA Asso A Act amen wan, the c pment Foun ons by CPA tions and h g to income ncy, but also good and i tancy profes tember 200 s on the au r’s Respons ponsibility it. Taiwan pro etect fraud sed on erran monitoring es across b ics Ltd. was ncial fraud. cked the Ta sion. Other to the inv hung-shing nown fraud which resul m investme Taiwan Int n) in 1994 b ate frauds i in auditors etect and re blic do not cumstances rity, Financi andards and dea of emp verseer, the ociation’s s ndment 2007 current aud ndation (AR A Associati holding acco sources at o renders it interest. Th ssion. 06, Taiwan uditor’s resp ibility to Co for reportin ofessional b was not dis nt auditors id process and usiness hav s one case i . By the end aiwanese m fraud episo estment in Bank result d cases are lted in a los nt loss real ternational because of th n Taiwan h s but have a eport fraud. favor the st that led t ial Supervis d effect a rob ploying an o Practice R elf-regulato 7 (Wu, 2007 dit standard RDF). As a f on, with th ountant pro the Associa ineffectual his is not c auditing se ponsibilities onsider Frau 35 ng fraud is i body’s syste scussed in th dentified by d its outcom ve increased infamous en d of June 2 market and odes includ 2004, and ted in NT$ Tung-lung ss of NT$2. lization by t Securities C he false tran have not on also placed However, t tatus quo. to the pass sory Comm bust Practic outside regu Review syst ory function 7). ds regulati foundation, he exceptio ofessional tr ation not on l when it co conducive t etting body s to detect ud in an Au Asian involved wh em of Practi he public do y the monito mes. d in the last nough to be 004, Procom brought ab de Infodisk d the illega $11 billion b Metal Ind 4 billion (U the shift to Company s nsaction ma nly resulted d the spotlig the Governm age of Sar mission, bega ce Review s ulatory agen tem has sti ns, which a ng body i , ARDF’s in on of some raining sem nly hampers omes to pro to the healt y, respondin t and repor udit of Finan n Journal of F hen the audi ice Review omain. Littl oring of aud t two decad deemed the mp’s NT$40 bout scathin Technology l over-due bad-debt lo ustry Co’s USD$80 mil long-term i suffered los ade by a jun in huge lo ght of the d ment, variou rbanes-Oxle an seriously system in Ta ncy such as ll relied on re supporte is Account ncome deriv income de minars. The s ARDF in moting aud thy develop ng to the pu rt fraud, iss ncial Statem Finance & Ac ISSN 19 2013, Vol. www.macrothi itor discove with respe le publicity ditors’ perfo des. Among e Taiwan ve 0 billion (U ng criticism y’s NT$4.28 loans mad oss in 2000. fraudulent llion) in 19 investment s of NT$10 nior staff. osses of mo debate on a us pressure ey Act (SO y to explore aiwan. Reg s PCAOB t n the most ed and endo ting Resear ves mainly f erived from conflict of its standard dit standards pment of T ublic critic sued SAS ments. The T ccounting 946-052X 5, No. 1 ink.org/ajfa ers fraud ct to the is given ormance, gst them, ersion of USD$1.3 m of the 8 billion de to its . During activity 998 from without 0 billion oney and auditors’ e groups, OX), the ways to rettably, to be its part on orsed by rch and from the m selling f interest d-setting s for the Taiwan’s ism and 43: The Taiwan’s SAS 43 respons 2006). spells o maintai detectin Eviden The deb gaps w well as define t envision term b recomm (1993) auditors reasona expecta ‘reason ‘deficie Numero many c usable r that sha reasona Baron e Questio officers existenc respons partners falsifica Further One tho 47% of The St compris were th ‘financi audit fi 3 adopted cu sibility to re It points o out the resp in an attitud ng material nce from Em bate about t ithin the ac between pu the term ‘e ned both by became pre mendations extended th s’ perform ableness ation-perform ableness ga ent standard ous empiric countries. B responses ( areholders able or even et al. (1977 onnaires we s (83); fina ce of audit sibility to d s of large f ation. evidence i ousand resp f those quest teen survey sed 1,737 u hose who sa ially aware’ inancial sta urrently, ref eport fraud, out that the ponsibility a de of profe misstateme mpirical St the auditor’ ccounting p ublic expec expectation y the indep evailing us of the Coh he definitio mance as p and expe mance gap ap’ and the ds gap’ and t cal studies o Beck (1973) 46% respon expect from n possible. 7) conducted ere sent to l ancial mana expectation detect the de firms were n the 1980s pondents we tioned belie y (1990), c usable respo aid they we ’, were thos atements, an ferring to U , and consi detection as adherenc essional ske nts in the fi udies s responsibi profession i ctations and gap’ as di endent acco sage in th hen Report ons as the g perceived ected per p’, and p ‘performan the ‘deficien of the audit ) surveyed nse rate). B m the aud d a survey arge firm a agers (79); n gap where eliberate m the group p s was provi ere interview eved that au conducted ondents who ere chairma e in a positi nd who ow 36 S SAS 99 a ideration of responsibil ce to GAAS epticism in inancial stat ility to dete itself conce d auditor per ifference of ountant and he auditing on auditors gap betwee by society rformance, proposed t nce gap’. Th nt performa expectation Australian Beck’s findin ditors far ex in 1975 to audit partner and financ eby non-au material falsi proclaiming ided by the wed by telep uditors shou by means o were divi an, director ion to influe wned shares Asian and UK SAS f fraud risk ity rests w S, namely t order to ha tements aris ect fraud rev rning the p rformance. f the levels d by the use g literature s’ responsib en society’s y. By em she a two major he latter is ance gap’. n gap have shareholde ngs were th xceed what learn the ex rs (105); sm cial analyst uditors thoug ification of g least resp e MacDonal phone and, ld actively of face-to ded into thr or senior p ence audit a s and active n Journal of F S 110, recog factors dur with manage that the aud ave a reaso sing from er veals that th proper cond Liggio (19 s of expect er of financ after the bilities (AIC s expectatio mbracing th dopted th r compone constructed been condu ers in 1972 hat the profe t the audit xtent of any mall firm C ts (52). Th ght auditors f the financi ponsibility t ld Commiss as far as fra seek fraud. -face interv ree categori partner in a appointment ely manage Finance & Ac ISSN 19 2013, Vol. www.macrothi gnizes the a ring the au ement. How ditor is req onable assur rror or fraud here are exp duct of an a 74) was the ted perform cial stateme e conclusio CPA, 1978) ons of audit he notion the title ents, name d as the sum ucted since 2 and obtain fessional ass tor would c y expectatio CPA (35); ba he study fo s should tak ial statemen to detect de sion (CICA aud was con views in t ies: (1) ‘inf a company; ts and famil ed their ow ccounting 946-052X 5, No. 1 ink.org/ajfa auditor’s dit (Ma, wever, it quired to rance of d. pectation audit, as e first to mance as nts. The ons and ). Porter tors and of the ‘audit ely, the m of the 1970 in ned 711 surances consider ons gap. ank loan ound the ke more nts. The eliberate A, 1988). ncerned, the UK, fluential’ (2)the liar with wn share portfoli audited detectio expecta Humph 1991. A categor analysts even au they did Porter auditors of those usable general non-aud perform 11%, 5 1989 s expecta The 199 and unr Porter a has imp auditors recomm strength enhanci to narr educate Oth existenc designe respons and Jag Low, F Ahmad (2005) Sohlima the exis of audit io or financi financial s on is an im ations gap re hrey et al. (1 A 38% resp ies of inte s, bankers, uditors saw d not feel th (1993) con s’ interest g e responsib 1,184 respo public) r ditors. The mance gap, d 8%, and 31 study in b ation-perform 99 study sh reasonablen and Gowth proved so th s have incr mended four hened moni ing educatio owing the ed about the her studies ce of the ex ed to asce sibilities and ger (1993) i Foo, and K (2004) in in Banglad an (2006) in stence of the ted financia ial affairs; ( statements. mportant par egarding fra 1993a) cond ponse rate erviewees and financi auditors as hat auditors nducted a s groups abou bilities, and onses from revealed th e study cal deficient sta 1% respectiv oth NZ an mance gap howed the s ness expect orpe indica hat the perf reased to a r measures itoring of au on of the au reasonable e audit funct in emerg xpectation g ertain the d the audit in the Repu oh (1988) Malaysia; desh; Dixo n Egypt; Si e audit expe al statement, (3) the rema The survey rt of the au aud detectio ducted a que was achiev were: audi ial journalis having a ro currently of survey in N ut auditors’ e the respons four group he presence lculated the andards gap vely. In 199 nd the UK has change sizes of the ation gap h ated (2004) formance ga level that to be impla uditors’ per uditing pract eness gap, tion and wh ing econom gap. Most of opinions o objectives. ublic of Sou and Best, B Lin and C n, Desira a idani (2007) ectation gap , and audito 37 ainder of th y revealed uditor’s job, on gap of co estionnaire ved which itors, accou sts. The evi ole to ensur ffer signific New Zealan existing res sibilities au ps (auditors e of an e e size of p, and unre 99, Porter a K and fou ed significa deficient p have chang that audito ap has narro more than anted to nar rformance; i titioners; an they sugge hat auditors mies have f these stud of differen They are, f uth Africa; Buckby an Chen (2004) and Baldac ) in Lebano p in the area or’s indepen Asian e responden that the w , and showe onsiderable survey betw equated to untants, fin idence indic re that all sig cant protecti nd in 1989 sponsibilitie uditors shou s, auditees, expectation the gaps a asonablenes and Gowtho und that th antly over th performance ged to 6%, ors’ perform owed. How n offsets thi rrow the pe improving q nd introduci ested the n can reasona provided dies were un nt interest for example Leung and nd Tan (200 ) in China; cchino (200 on. Most stu a of the aud ndence or ac n Journal of F nts who wer widely held ed clearly t proportions ween Octob o 935 usabl nancial dir cated that p gnificant fra ion against to ascerta es, the stand uld take upo financial co gap betw and found ss expectati orpe (2004) he composi he decade f e gap, defic 53%, and mance of th ever, societ is improvem erformance quality cont ing new aud need for so ably be expe the eviden ndertaken by groups ab e, the invest d Chau (200 01) in Sing Chowdhur 05) in Malt udies above itor’s respo ccountability Finance & Ac ISSN 19 2013, Vol. www.macrothi re not famil opinion th that there e s. ber 1990 and le replies. rectors, inv preparers, u aud is detec fraud. ain the opin dard of perfo on themselv ommunity, ween audito that the d ion gap con ) replicated ition of th from 1989 t cient standa 41%, respe heir respons ty’s expecta ment. They gap: contin trols in aud diting stand ociety to b ected to ach nce identify y means of bout the a tigations by 01) in Hong gapore; Fad ry, Inn and ta; Woodh e consistentl onsibility, re ty. ccounting 946-052X 5, No. 1 ink.org/ajfa liar with hat fraud exists an d March The six vestment sers and cted, but nions of ormance ves. The and the ors and deficient ntributed Porter’s he audit to 1999. ards gap, ectively. sibilities ations of y further nued and dit firms; dards. As be better hieve. ying the f surveys auditor’s y Gloeck g Kong; dzly and d Kouhy ead and ly found eliability Results examin away fr the 20th account survey r is pertin despite so-calle Researc Whethe worth expecta order to 1. The ordinary 2. The audit ex 3. The exists a 4. The exists a 5. The where t 6. The the true 7. The perpetra between 8. The (such a entity. 9. The (such a enrich e 10. The falsifica from a stri ed. They co rom fraud d h century, is tancy profe respondents nent to note general ex ed ignorance ch Method er the accou investigatin ations gap w o examine th e auditor s y audit exam e auditor sh xamination e auditor sh among empl e auditor sh at the manag e auditor sh the irregular e auditor sh e and fair vie e auditor s ated and co n affiliated e auditor sh s embezzlem e auditor sh as petty cash employees b e auditor ations and ing of emp onfirm the detection as s not a view ession and a s who want e also that s xhortations e gap. d unting profe ng. This em with respec his issue, th hould be h mination. hould be he specifically hould be hel loyees below hould be hel gement leve hould be he rities are a r hould be he ew of finan should be oncealed thr companies) hould be he ment) that s hould be he h theft, pay below mana should be misreprese irical studie historical a the main au w shared by audit benefi ed the audit such views from the p fession in T mpirical in ct to the au he following held respon eld responsi y designed f ld responsib w managem ld responsib el. eld responsi result of unr eld responsi ncial stateme held respon rough relate ). eld responsi serve to per eld responsi yroll paddin agement lev held resp entations of 38 es stretchin analysis ma audit objecti the public. ficiaries, the tor’s role to have, in br profession Taiwan has nvestigation uditor’s resp g statements nsible for th ible for fail for such det ble for failu ment level. ble for failu ible for fail recorded tra ible for fail ents. nsible for ed party tra ible for fail rsonally enr ible for fail ng, theft of vel. ponsible for f financial Asian ng over the ade earlier, n ive, which s Not only d ey differ co o embrace fr oad terms, and educat met the pub n are to a ponsibilities s are develo he failure t lure to dete ection. ure to detect ure to detect lure to dete ansactions. ure to detec failure to ansactions ( lure to dete rich manage lure to dete stocks) tha r failure to statements n Journal of F last 40 yea namely that solidified in do the views onsiderably. raud detecti remained c ional publi blic’s expec scertain th s to detect oped and tes o detect m ct material material fra material fra ect material ct fraud tha detect mat (i.e., shares ect the type ers, officers ect the type at are comm o detect m s that are c Finance & Ac ISSN 19 2013, Vol. www.macrothi ars or so ha at the gradu n the second s differ betw The percen ion is subst consistent ov icity to cha ctations is he nature o corporate f sted: material frau fraud in a raud when c raud when c fraud in si at materially terial fraud trading irr e of materia s, or directo e of materia mitted to pe material, de committed ccounting 946-052X 5, No. 1 ink.org/ajfa ave been ual move d half of ween the ntage of antial. It ver time ange the an issue of audit fraud. In ud in an detailed collusion collusion ituations y affects d that is regularly al frauds ors of an al frauds ersonally eliberate for the purpose A choic asked t respond detectio analyzin choice, (coded side of t The an Wilcoxo establis signific means signific be claim (Siegel For the group c Top-500 financia prepare A total non-res explana auditee member is a very Investig As the instituti with re surveye Differen the surv stateme results respond Table 3 It is ack e of defraud ce of six alt to give one dents may n on, the ‘don ng. Therefo were calcu 5)’ on the le the scale. nalysis is on-Mann-W sh whether a cant. The W of the two cant differen med that the and Castell e purpose o consisting 0 public co al analysts ers of financ of 964 ques spondents w ation, 340 o group, and rs surveyed y satisfactor gation Resu respondent ional invest espect to ac ed opinions nce of opin vey results a ent response which exa dent groups . knowledged ding the inve ternative res e level of a not have bac n’t know (c ore, the fiv ulated by us eft hand sid made of Whitney tes apparent dif Wilcoxon-Ma population nces were fo e auditors a lan, 1989) f this study of financia ompanies; a and bank lo cial statemen stionnaires w was done by of which w d 213 to the d, there were ry response ults t group of t tors, and ba ccounting in s of auditor nions within are exhibite es are provi amine whet . The summ d that, altho esting publi sponses for agreement. ckground kn coded 0)’ ch ve choices o sing the fiv de of the sca f the diff st. The Wi fferences of ann-Whitne ns without h found amon re expected y, three gro al directors, and the gro oan officers nts. were mailed 669 duplic went to mem members o e 341 usabl e rate within the users of ank loan of nformation, r’s respons n the user gr ed in Table ided. In add ther differe mary and ov ough judgm 39 ic. each statem In order to nowledge a hoice is giv of level of ve-point Lik ale to ‘Stron ferences in Wilcoxon-Ma f opinion b ey test was c having to t ngst five gro d to be held oups were s , CEOs, or oup of use s. The subg d. In order t cate copies o mbers of th of the users le responses n an East-As f financial fficers, who , the analys sibility betw roup was al 1, where th dition, Tabl ences are e verview of ment of the Asian ment is desi o eliminate about the au ven in the f agreement kert scale, v ngly Disagre n the me ann-Whitney etween the chosen beca test for nor oups within responsible selected. Th r accountin rs of finan groups of th to increase t of the quest he auditor g of financia s, a 35% ret sian context statements o represent sis is thus ween the fi lso identifie he means an le 2 shows evident in the respon performanc n Journal of F igned, and t the bias o uditor’s resp questionnai t, excluding varying from ee (coded 1 ean rankin y test has survey grou ause it could rmality of d these table e for the de hey are aud ng manager ncial statem he auditee a the respons tionnaire an group, 116 l statements urn rate for t. consists of different b undertaken ive major r ed. The desc nd standard Wilcoxon-M the opinio dents’ opin ce of audito Finance & Ac ISSN 19 2013, Vol. www.macrothi the respond of analysis ponsibility f ire but excl g the ‘don’ om ‘Strongl )’ on the rig ng based been ado ups are stat d test differ distribution es of results etection of th ditor group, rs from Ta ments, consi are regarde se rate, follo nd original l to member s group. Of r data analy f financial a beneficiary n by compa respondent criptive stat deviations Mann-Whit on results b nions is prov ors’ respons ccounting 946-052X 5, No. 1 ink.org/ajfa dents are that the for fraud luded in ’t know’ y Agree ght hand on the opted to tistically rences in . Where s, it may he fraud auditee aiwanese isting of d as the ow-up of letters of rs of the f the 964 sis. This analysts, interests aring the groups. tistics of for each tney test between vided in sibilities involve study, 3 so arbit On ave auditor’ results o Stateme when co Stateme when co Stateme materia commit The ove the fina stateme instituti are resp them. T Stateme in a det Stateme materia Stateme perpetr Stateme delibera the purp It is int signific accordin auditors which t existing the fina caused fair view There i es a range o 3 has been s trariness wil erage, in the ’s responsib of less than ent 3: The a ollusion exi ent 4: The a ollusion exi ent 9: The al frauds (s tted to perso erall group ancial analy ent 9 whic ional invest ponsible for The auditor g ent 2: The a tailed audit ent 6: The ally affects t ent 7: The a rated and co ent 10: The ate falsifica pose of defr eresting to cant differen ng to the s perceive th they are re g auditing st ancial statem by delibera w of the fin s a strong c of spectrum selected as t ll decrease, e overall gr bility for fr three. Thes auditors sho ists among e auditors sho ists at the m auditors sh such as pet onally enric perception yst group, bu h are not tor groups a r fraud dete group consi auditors sho examinatio auditors sh the true and auditors sho oncealed thr e auditors s ations and m rauding the note, howev nces in the m Wilcoxon-M heir respons easonably e tandards ex ments be pr ate falsificat nancial state consensus b ms, rather th the point of and objecti roup analys aud detecti se three stat ould be held employees b ould be held anagement hould be he tty cash the ch employee of the abov ut bank loan auditor’s d agree with ection. By c iders only th ould be held on specifical hould be he d fair view of ould be held rough relate should be h misrepresent investing p ver, that the mean respon Mann-Whitn sibilities on expected to xpress that a resented wi tions or dis ements. by both aud 40 han a point f differentiat ivity increas sis, three of on. This is tements are: d responsib below the m d responsib level. eld respons eft, payroll es below ma ve three state n officer gr duties. It s all the ten contrast, th he following d responsib lly designed eld respons of financial d responsib ed party tra held respon tations of fi public. e above fou nses betwee ney test in nly within th o perform t auditors sho ith a true an stortions wo ditor and no Asian of measure tion (averag se. f the statem shown in t : ble for the fa management ble for the fa sible for the l padding, anagement l ements is co roup only ag should be statements e auditor g g statement ble for the fa d for such d sible for th statements. ble for the fa ansactions. nsible for t inancial sta ur responsib en the audito n Table 2. he existing a the duty to ould issue th nd fair view ould have m on-auditor g n Journal of F ement, for t ge of sum b ments are no the Table 1 failure to de level. failure to de e failure to or theft of level. onsistent wi grees with t noted that which claim roup agrees s as their re failure to de detection. he failure to failure to de the failure tements tha bilities do no or group an The results auditing sta o detect. Th he audit rep w. Any mate material effe groups that Finance & Ac ISSN 19 2013, Vol. www.macrothi the purpose by 1 to 5). B ot perceive 1, by having etect materi etect materi o detect the f stocks) wh with the resp the stateme both audi m that the s only with esponsibiliti etect materi o detect fra etect materi to detect m at are comm ot have stat nd the audite s indicate andard requi he prescrip port stating terial missta ects on the auditors sh ccounting 946-052X 5, No. 1 ink.org/ajfa e of this By doing d as the g means ial fraud ial fraud e type of hich are onses of nt 3 and itee and auditors h four of ies: ial fraud aud that ial fraud material, mitted for tistically ee group that the irements, ptions in whether atements true and hould be held res and for (Statem Howeve the scop detect a level. T investor be foun Stateme general respons To sum duties t perpetra through Discuss The pa regardin expecta respons agrees o appears needs to To ensu maintai be incr Self-reg confide suggest professi their in public capaciti principl The fac rather s indicati and affe auditors sponsible fo detection o ment 6). er, the non- pe of existi all type of f The signifi r groups, an nd in the co ent 3. The r ized conclu ses between m up, the res to detect the ated by em h related-par sion and Co aper has in ng the aud ation gap sibility from only with th s that adequ o be conside ure that the ining the fra reased, not gulation is n ence in the ted that the ionals but i nvolvement, awareness ies can, wh les of what ct that audit see their ro ion that the fect the relia s should ac or fraud det of fraud that -auditor gro ing auditing frauds inclu cant differe nd between omparison b results of W usion that ca n the groups sults indicat e material f mployees b rty transacti onclusions nvestigated, itor’s respo existing in m auditors w he detection uateness of ered and ma e accountin aud detectio t merely r not enough e adequacy auditing st include dis financial s heightened hile function is termed ‘c tors in Taiw ole as expr y still need ability of th ct as a watc tection in a t materially oup would n g standards uding the co ences of o the auditor between au Wilcoxon-Ma an be drawn . te the existe fraud, durin below mana ions. Table , amongst onsibility to n Taiwan. with respec n responsib the auditin aintained. ng professio on standards relying on for building of the dis andards-set tinguished statement a d, so that C ning under commonly a wan do not s ressing an d to be awa heir audit r chdog that 41 design spec y affects the not merely but expect ollusion am opinions are r and bank uditor group ann-Whitne n about the ence of the ng an ordina agement le 3 provides auditor an o detect co The non- ct to detect bility require ng standard on is perce s, it is sugg the self-re g up the con sciplinary p tting body m members f audit proced CPAs in th a self-regu accepted’. see the dete independen are that und reports. Fur is responsi Asian cifically to true and fa expect the t auditors to mongst the e e between loan officer p and finan ey test (see T statistically expectation ary audit ex evel; and th a summary nd non-aud orporate frau -auditor gr ting fraud t ed in the Ta with respec eived by in gested that p egulation a nfidence of procedures must not ju from divers dures can b heir financia ulatory inst ection of fra nt opinion detected frau thermore, f ible for rep n Journal of F search for f air view of f auditor’s re o expand th employees b the audito r group. Th ncial analyst Table 2) rev y significan n gap in ter xamination; hat materia and overvie ditor group ud. The fin roups are than the au aiwanese ex ct to the au terested ou publicity of as a monit f the public. of the pro st be compr e sectors o be made mo al audit an titution, bet aud as their on financia ud could di from an eth porting any Finance & Ac ISSN 19 2013, Vol. www.macrothi fraud (State financial sta esponsibility he responsi below mana or and inst he similar re t group, ex veal that the nt difference rms of the a that materi al fraud co ew of the op ps, the per ndings indi expecting uditor group xisting stan uditor respo utside partie f disciplinar toring mec . To increas ofession, it rised of acc of society. T ore transpar nd standards tter conform r responsibi al statemen istort their hical viewpo suspicion ccounting 946-052X 5, No. 1 ink.org/ajfa ement 2) atements y within ibility to agement itutional esult can xcept for ere is no es of the auditor’s ial fraud oncealed pinions. ceptions cate the greater p, which dards. It nsibility es to be ry action chanism. se public is also counting Through rent and s-setting m to the ility, but nts is an findings oint, the of fraud rather th Educati regard t still exi technica maintai indepen Users in precise sufficie reasona concern be requ have do The stu suggest submitt extendin Future r sending study in aspects perpetra Referen AICPA Respons AICPA (Treadw APB. (2 an Audi Auditin Council Baron, irregula Beck, G Accoun Best, P. han remaini ion and com their role, b ist. Not on al compete in professio ndence and n Taiwan, o and detail ntly standa able assuran ns they have uired to add oubts about udy contribu tions provid ted that the ng the inter research ma g a large-sc nto this are of auditing ated and det nces . (1978). Re sibilities, A . (1987). R way Commis 2005). ISA it of Financ ng Practices l, London. C., Johns arities: Are w G.W. (1974 nting and Bu ., Buckby, S ing silent. mmunication by closing nly must au ence require onal attitud service abo on the other led engage ardized to a nce). Howev e about the a paragraph the viability utes our un ded in an at e investigat rnational lite ay consider cale self-adm ea could als g for fraud tected will a eport Conc AICPA, New Report of th ssion), AIC (UK and Ir cial Stateme s Board. ( son, D., S we closing t 4). The rol usiness Rese S. and Tan, n may be a k the ‘misun uditors kno ed to fulfil des. In pa ove reward m hand, may ement letter avoid confu ver, it must company. I h to the aud y of the aud nderstanding ttempt to br tion finding erature rega r both longi ministered q so be under . Detailed m also be imp lusions and w York. he Nationa PA, New Yo reland) 240 ents, ICAEW (2004). Eth Searfoss, D the expecta le of the a earch, 4, 11 C. (2001). 42 key to solvi nderstanding ow what th ll them sat articular, th must be inst y need to be r and the usion amon also be flex It is sugges dit report ex ditee compa g of the aud ridge the ex gs make a arding the au itudinal stud questionnai rtaken to in micro case portant (see d Recommen al Commiss York. 0: The Audit W, London. hical Stand D. and Sm ations gap?” auditor in m 7-122. Evidence o Asian ing part of t g gap’ altho heir respons tisfactorily, he professi tilled in them well inform audit repo gst readers xible enoug sted that the xplaining th any. ditor’s duty xpectation g particular udit expecta dies and co ire to remo nvestigate t studies of e.g. Lam et ndations of sion on Fra tor’s Respo dards for A mith, C. (1 ” Journal of modern soc of the audit n Journal of F the problem ough the ex sibilities are they must ional stand m. med through rt. Such a as to its b gh for audito e auditors in he position i y to detect f gap in Taiw and valuab ation gap. mparative s ve any pote the function how major t al., 2011). f the Comm audulent F nsibility to Auditors, F 1977). Unc f Accountanc ciety: An e expectation Finance & Ac ISSN 19 2013, Vol. www.macrothi m as to how xpectation g e, and pos t also deve dards of i h the provis a report sh basic messa ors to repor n Taiwan ex in cases wh frauds and wan. Moreov ble contribu studies ove ential bias. nal and ope r frauds we mission on A Financial Re Consider F Financial R covering c cy, 144(4), empirical ap n gap in Sin ccounting 946-052X 5, No. 1 ink.org/ajfa auditors gap may sess the elop and ntegrity, sion of a ould be age (i.e., rt clearly xplicitly here they possible ver, it is ution to rseas by Further erational ere both Auditors’ eporting Fraud in eporting orporate 56-66. ppraisal. ngapore. Manage Brown, 37(4), 6 Burrow hologra Accoun Cheng, assuran Chowdh Banglad http://dx CICA. Canadia Desira, in http://dx Dixon, gap http://dx Dunn, J Accoun Fadzly, Manage Farrel, busines Flint, D and Bus Gloeck, Workin Huang, auditing August, Humph Issue in Humph auditors erial Auditin R. G. (19 696-703. wes, A.W., am of post- nting, 15(6), H. (2004) nce. Account hury, R., In desh. x.doi.org/10 (1988). Re an Institute J. and Bald Malta. x.doi.org/10 R., Woodh in Eg x.doi.org/10 J. and Sikk ntancy and B M.N. and erial Auditi B. and Fran ss fraud: SA D. (1971). T siness Resea , J.D. and J ng Paper, Sc C., Lin, L g attestation , pp. 76-82. hrey, C. (19 n Auditing, P hrey, C., Tu s and frau ng Journal, 962). Chang Kastantin, Enron discl 797-811. h ). The resp ting Resear nnes, J. and Manageri 0.1108/0268 eport of th of Chartere dacchino, P Manage 0.1108/0268 head, A.D. gypt. M 0.1108/0268 ka, P. (1999 Business Af d Ahmad, ng Journal, nco, J. (199 AS No.82. W The role of t arch, 1(4), 2 ager, H. (19 chool of Acc L.Y. and Ch n: Recent lit 997). Debati Paul Chapm urley S. and ud?” Accou , 16(3), 133 ging audit o J. and Nov losure: A c http://dx.doi ponsibility rch Monthly Kouhy, R. al Au 869005106 he commiss ed Accounta . J. (2005). erial A 869005106 and Sohlim Managerial 8690061065 9). Auditors ffairs, Basild Z. (2004) , 19(7), 897 99). The ro Western Crim he auditor i 287-293. ht 993), The au countancy, hen, H. (19 tigation cas ing audit ex man Publishi d Moizer, P nting, Aud 43 -44. http://d objectives a vicevic, M critical reali i.org/10.101 for financ y, 220, 53-58 (2005). Th uditing 19719 sion to stu ants, Toront Jurors’ and Auditing 11230 man, M. (20 Auditin 53026 s: Keeping don, UK. . Audit ex 7-915. http:/ ole of the au minology Re in modern s ttp://dx.doi. udit expecta University 998). The d ses. Accoun xpectations ing, London P. (1993b). diting, and Asian dx.doi.org/1 and techniq . (2004). T ist commen 16/j.cpa.200 ial stateme 8. (in Chine he public se Journal, udy the pub to. d self-percep Journa 006). An in ng Jou the Public xpectation //dx.doi.org/ uditor in th eview, 2(1), society: An org/10.1080 ation gap in of Pretoria. discussion ting Resear . In Shere n, pp. 3-29. Protecting Accountab n Journal of F 10.1108/026 ques. The A The Sarbane ntary. Critic 03.06.006 ents audit: ese) ector audit e , 20( blic’s expe ptions of th al, 20( nvestigation rnal, 2 in the Dar gap: The /10.1108/02 he preventio 1-12. exploratory 0/00014788 n the Repub on the liab rch Monthly M, Turley against det bility Journ Finance & Ac ISSN 19 2013, Vol. www.macrothi 6869001103 Accounting nes-Oxley A cal Perspec it is not expectation (8), 8 ectations of he statutory 0(7), 6 n of the exp 21(3), 2 rk, Associa case of M 2686900410 on and dete y essay. Acc 8.1971.9728 blic of South bility of Ta y (in Chines S, editors. tection: the nal, 6(1), 3 ccounting 946-052X 5, No. 1 ink.org/ajfa 385579 Review, Act as a ctives on absolute ns gap in 893-908. f audits, auditors 691-706. pectation 293-302. ation for Malaysia. 0549420 ection of counting 8980 h Africa, aiwanese se), 153, Current case of 395-411. http://dx Humph perspec http://dx Humph An emp ICAEW ICAEW London Koh, H Journal Koh, H Auditing Lam, J. Unpubl Lee, T. Lee, T. Leung, audit ex 14, 181 Liggio, Contem Lin, Z.J Republi Liu, C.W of Mana Low, A and aud Lys, T. 65-93. h Ma, X. Securiti Mitchel for Acc x.doi.org/10 hrey, C.G. ctive on the x.doi.org/10 hrey, C.G., M pirical inves W. (1985a). R W. (1985b). n. H.C. and W l, 13(3), 147 .C. and Wo g Journal, 6 , James, K. lished Work (1970). The (1986), Com P. and Ch xpectations: -200. http:/ C.D. (197 mporary Bus J. and Chen ic of China. W. (2002). agement (in A.M., Foo, S ditors—som and Watts, http://dx.do R. (2006). ies Market M ll, A., Sikk ountancy an 0.1108/0951 and Moize e auditing f 0.1016/1045 Moizer, P. a stigation. Ac Report of th The Audito Woo, E. (19 7-154. http: oo, E. (2001 6(3), 176-88 and Leung king Paper, U e nature of a mpany Audi au, G. (200 : Some evid //dx.doi.org/ 74). The ex siness, 3, 27 n, F. (2004) . Internation CPA's licen n Chinese), S.L. and Ko me empirical R.L. (1994) oi.org/10.230 Auditor’s r Monthly (in a, P. and W nd Business 1357931002 er, P. (1990 function. C 5-2354(90)0 and Turley, W ccounting a he Working P or and Fra 998). The //dx.doi.org ). The audit 8. , J.K.-S. (20 University o auditing and iting (3rd ed 01). The pr dence from /10.1016/S0 xpectation 7-44. ). An empir nal Journal nsing requir 19(1), 109- oh, H.C. (19 l evidence. S ). Lawsuit a 07/2491440 role in cap n Chinese), 1 Willmott, H. s Affairs, UK 44 27512 0). From te Critical Per 03021-7 W. S. (1993 and Business Party on Fr aud: Repor expectation g/10.1108/0 tor-manage 011). The re of Southern d its objecti d.), Chapma roblematic r Hong Kon 0897-3660( gap: the a rical study o l of Auditing rement, leg 145. 988). The ex Singapore A against audi 0 pital market 123, 31-41. . (1998), Th K. Asian echniques rspectives o 3a). The aud s Research, raud (Davis rt of Lord B n gap in au 0268690981 er expectatio ebuilding of n Queenslan ives. Accoun an and Hall relationship ng. Advance 01)14010-9 accountant’s of audit ‘ex g, 8(8), 92-1 al liability, xpectation g Accountant, itors. Journa t: Fraud det he accounta n Journal of F to ideologi on Accounti dit expectati 23(91A), 3 son Report), Benson’s Co uditing. Ma 0208038 on gap in au f a life after nd, Toowoom ntancy, 81, , London. p between a es in Interna 9 s legal Wa xpectation g 115. and the aud gap between , 4, 10-13. al of Accou tection resp ants’ Laund Finance & Ac ISSN 19 2013, Vol. www.macrothi ies: An alt ing, 1(3), 2 tions gap in 395-411. , ICAEW, L Committee, I Managerial A uditing. Man r jail time fo mba, Austra 292-296. audit report ational Acc aterloo. Jou gap’ in the P dit market. n financial unting Resea ponsibility. dromat, Ass ccounting 946-052X 5, No. 1 ink.org/ajfa ternative 217-238. Britain: London. ICAEW, Auditing nagerial or fraud. alia. ting and ounting, urnal of People’s Journal analysts arch, 32, Gre-Tai sociation O’Mall Accoun O’Sulliv Accoun PCAOB Compan Porter, and Bus Porter, issue. I London Porter, UnitedK Institute Power, on Acco Sidani, Auditing Siegel, Ed.), M Sikka, Journal http://dx Sikka, P expecta 299-330 Steen, M Tung, K Metal In Vanasc http://dx Willing detectio Woolf, Austral ey, S.F. (1 nting Horizo van, N. (1 nting and Bu B, (2002), A ny Account B. (1993). siness Resea B. (1997). n Shere M n, pp. 31-54 B.A. and Kingdom in e of Charter M. (1995). ounting, 6(4 M.J. (200 g Journal, 2 S. and Cast McGraw-Hill P. (2004). l of x.doi.org/10 P., Puxty, A ations gap: 0. http://dx. M. (1990). A K.P. (1998) ndustry. Acc o, R. (199 x.doi.org/10 gham, J.J. (1 on of fraud. E. (1987). lia, 57(9), 22 1993). Lega ons, 7, 82-8 1993). Aud usiness Rese AU 316: C ting Oversig An empiric arch, 24(93 Auditors’ r , Turley S, . d Gowthrop n 1999 and red Accoun Auditing, e 4), 317-339. 07). The a 22(3), 288-3 tellan, J. (19 l, Singapore Some que Disclo 0.1057/palg A., Willmott Some theo doi.org/10. Audits and a . The preve counting Re 98). Fraud 0.1108/0268 1975). Discu The CPA Jo Bridging t 2-23. al liability 7. itors’ liabil earch, 23(9 Consideratio ght Board, N cal study of 3), 49-68. ht responsibilit editors, Cu pe, C. (20 compariso tants of Sco expertise, a . http://dx.d audit expec 302. http://d 989) Nonpa e. estions abou osure grave.jdg.20 , H. and Co ory and ev 1006/cpac.1 auditors: W ention of c esearch Mo and Audi 8690981019 ussant’s res ournal, 18-2 he gap: Th 45 is having lity: Its ro 1A), 412-42 on of Fraud New York: f the audit e ttp://dx.doi. ties with re urrent Issue 004). Audi on with the otland, Edin and the soci doi.org/10.10 ctation gap: dx.doi.org/1 arametric S ut the gove and 040023 ooper, C. (19 vidence. Cri 1997.0159 What the pub corporate fin onthly (in Ch iting. Man 98724 sponse to th 21. he role of th Asian a chilling le in the c 20. d in a Fina expectation- org/10.1080 espect to co e in Auditin t expectati gap in New nburgh. iology of te 006/cpac.19 : Evidence 10.1108/026 Statistics: Fo ernance of Governanc 998). The im itical Persp blic thinks, K nancial dist hinese), 157 nagerial Au he relationsh he auditor. n Journal of F effect on corporate g ancial State -performanc 0/00014788 orporate frau ng. Paul Ch ion-perform w Zealand chnique. Cr 995.1029 from Leb 6869007107 or the behav auditing fi ce, 1( mpossibility pectives on KPMG, Lon tress: The c 7, 31-36. uditing Jou hip of auditi The Charte Finance & Ac ISSN 19 2013, Vol. www.macrothi the auditor governance ement Audit ce gap. Acc 8.1993.9729 ud: A contr hapman Pub mance gap in 1989 an Critical Persp benon. Man 733152 vioral scien firms. Intern (2), 1 y of elimina n Accountin ndon. case of Ton urnal, 13(1 ing standard ered Accou ccounting 946-052X 5, No. 1 ink.org/ajfa r’s role. debate. t, Public counting 9463 roversial blishing, in the nd 1999, spectives nagerial nces (2nd national 186-200. ating the ng, 9(3), ng Lung ), 4-71. ds to the untant in St St St St St St St St St St Wu, C. amendm Table 1 atement 1 atement 2 atement 3 atement 4 atement 5 atement 6 atement 7 atement 8 atement 9 atement 10 * indicat auditor g Table wilcoxo Statemen Statemen Statemen Statemen Statemen Statemen Statemen Statemen Statemen Statemen indica the su F. (2007). ment. Accou . Descriptiv Overall Gro Means S.D 3.75 1.0 4.31 0.6 2.53 1.0 2.69 1. 3.63 0.9 4.14 0.6 3.85 0.8 3.31 1.0 2.98 1.0 3.89 0.8 tes that statist group (p≦0.05 2. Auditin on-mann wh nt 1 nt 2 nt 3 - nt 4 - nt 5 nt 6 nt 7 nt 8 - nt 9 nt 10 ates that no st urvey groups r The changi unting Resea ve statistics oup Auditors D. Means S.D 04 2.71 0.9 63 4.00 0.5 08 1.83 0.6 15 1.78 0.6 98 2.64 0.9 65 3.83 0.6 80 3.13 0.8 09 2.23 0.7 09 2.26 0.8 86 3.09 0.8 tically genera 5), based on W ng function hitney test t Auditors vs. Auditess Z S Pr -9.65 0 -6.68 0 -10.19 0 -10.27 0 -9.14 0 -5.00 0 -7.66 0 -10.05 0 -9.75 0 -8.92 0 tatistically gen regarding this ing environ arch Month by subgrou s Auditees D. Means S.D 97 4.38* 0.73 53 4.51 0.74 62 3.36* 0.80 61 3.37* 0.81 92 4.11* 0.59 66 4.26 0.57 89 4.16* 0.58 71 3.86* 0.80 81 3.76* 0.69 89 4.37* 0.66 alised conclus Wilcoxon-Man n expected o responses A Finan Sig. rob. Z .00 -6.9 .00 -4.4 .00 -1.8 .00 -3.5 .00 -6.4 .00 -4.1 .00 -6.8 .00 -7.5 .00 -3.6 .00 -7.1 neralised conc statements. 46 nment in CP hly, 265, 12- ups of respo Financial A D. Means 3 3.82* 4 4.33 0 2.10 1 2.33 9 3.72* 7 4.21 8 4.09* 0 3.46* 9 2.77 6 4.01* sion can be d nn-Whitney te d of audito s Auditors vs. ncial Analyst Sig. Prob. 98 0.00 42 0.00 83 0.07 54 0.00 42 0.00 13 0.00 83 0.00 55 0.00 64 0.00 13 0.00 clusion can be Asian PA practice -19. ndents nalysts Institu S.D. Me 0.82 4.7 0.56 4. 0.94 3.8 1.12 4.0 0.85 4.6 0.69 4. 0.59 4.4 1.05 4.3 1.05 4.3 0.62 4.6 drawn about t est. ors toward ts Aud v Inst'l In Z -7.36 -6.18 -7.64 -7.67 -7.23 -6.78 -5.97 -7.95 -7.75 -6.65 e drawn about n Journal of F e: the implic utional Investo eans S.D 72* 0.46 .68 0.48 88* 0.88 00* 0.91 60* 0.50 .68 0.48 40* 0.50 36* 0.70 32* 0.75 60* 0.50 the difference d fraud de ditors vs. nvestors B Sig. Prob. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 the difference Finance & Ac ISSN 19 2013, Vol. www.macrothi cation of C ors Bank Loan D. Means 6 3.93* 8 4.28 8 2.42 1 3.25* 0 4.05* 8 4.08 0 3.95* 0 3.58* 5 2.48 0 3.95* e in opinions etection res Audito vs. Bank Loan O Z -6.47 -2.90 -4.45 -7.36 -6.44 -2.09 -4.36 -7.76 -2.12 -5.46 e in opinions b ccounting 946-052X 5, No. 1 ink.org/ajfa CPA Act n Officers S.D. 0.35 0.55 0.84 0.98 0.32 0.47 0.32 0.71 0.85 0.39 from the sults of rs Officers Sig. Prob. 0.00 0.00 0.00 0.00 0.00 0.04 0.00 0.00 0.03 0.00 between Table 3 St St St St St St St St St Sta a:  in b: √ in . Summary tatement 1 tatement 2 tatement 3 tatement 4 tatement 5 tatement 6 tatement 7 tatement 8 tatement 9 atement 10 ndicates the ndicates the and overvie Auditors a √    √     statement i statement i ew of the su Audite √b √ √ √ √ √ √ √ √ √ is not consid s considere 47 urvey group ees Fin An dered as the ed as the aud Asian ps’ opinions nancial nalysts I √ √   √ √ √ √  √ e auditor’s r ditor’s respo n Journal of F Institutional Investors √ √ √ √ √ √ √ √ √ √ responsibilit onsibility. Finance & Ac ISSN 19 2013, Vol. www.macrothi Bank Loa Officers √ √  √ √ √ √ √  √ ty. ccounting 946-052X 5, No. 1 ink.org/ajfa an s