Expectation – performance of internal auditors: Examining views from Ghana

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