The audit performance gap of NSE listed companies: an analysis of client expectations and perceptions of auditing services
Date
2014
Authors
Mburu, David Wanyoike
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The main objective of this research was to establish if an audit performance gap exists for public listed companies in Kenya. The gap considered was that between client expectations of auditing and client perceptions of the performance of audit firms. The study targeted NSE listed companies because they are mainly audited by the top four audit firms in Kenya. These firms are regarded as offering superior auditing services. The research sought to establish whether client expectations of auditing are being met and to determine how audit firms can improve their service offerings.
Based on the data collected the researcher found that a narrow audit performance gap does indeed exist; client expectations are not being met. However, client expectations were found to be more reasonable than those of other stakeholders of financial information such as the public in particular. In order to reduce the performance gap the researcher suggested that clients need to be better educated on the scope of auditor responsibilities as some of their expectations were found to be wide of auditor responsibilities. Auditor training and further studies can also help improve auditor skills and in doing so help reduce the expectation gaps.
The limitations of auditing have enhanced the need for more fraud examiners and forensic accounting services. These can help improve fraud prevention and detection while reducing stakeholders’ expectations of auditors. The research findings are of importance to audit firms as they highlighted the most important client expectations of auditing services as well as the expectations which are not being met. These findings are important as they will inform audit firms on how they can improve their services. The underlying theory of the research was the agency theory.
Description
Submitted in partial fulfillment of the requirements for the Degree of Master of Commerce
Keywords
Auditing, NSE, Client expectation, Customer care, Audit performance gap