Abstract:
The study examines the audit expectation-performance gap from the standpoint of the internal audit
function from the perspective of a developing economy. It evaluates the audit expectation-performance
gap from the perspective of internal audit with the view to providing useful insights, interesting
dimensions and innovative perspectives to the Audit Expectation Gap (AEG) debate. A questionnaire
survey method was used to elicit and analyze the views of four main stakeholders in the financial
reporting supply chain. These were; (1) external auditors, (2) Senior Management, (3) Audit Committee
Members and (4) Professional Bodies. The independent sample t-test technique was used. This
technique compares the means of two independent groups, (the users of internal auditors reports
group and the internal auditors group) so as to determine whether or not there was statistical evidence
that their associated population means were significantly different, relative to questions of
responsibility of internal auditors; proactiveness of internal auditors; and professionalism and quality
of internal audit work. The results show that the views of stakeholders (that is, users of financial
information) on the expectation-performance of internal auditors do not differ significantly from those
of internal auditors on the issues of responsibility of internal auditors, proactiveness of internal
auditors, the level of professionalism of internal auditors and the quality of internal audit work. As
demostrated in the fidndings and discussions section of this paper, the paper evinces that the
application of the agency theory to issues concerning internal auditing is practicable and supported in
the context of the economic environment of developing countries. The paper provides some empirical
evidence based on the survey on stakeholder perceptions on the expectation-performance of internal
auditors from an AEG perspective. The study thus rekindles and adds to the myriad of discourses on
the longstanding AEG phenomenon as it relates to the internal audit function from the viewpoint of
different stakeholders
