engleski

The Extent of the Knowledge Gap among Auditors and Audit Users in Croatia

When a stakeholder in the audit process is not familiar with the duties of auditors, it results in the knowledge gap, which may lead to forming unrealistic expectations regarding the audit of financial statements. The most common consequence of the unrealistic expectations of audit users is the discontent with the quality of audit. The aim of this paper was to investigate what is the extent of the knowledge gap among audit stakeholders in Croatia and which group of stakeholders is the most effected. The results have shown that the knowledge gap is the most expressed in the group of external audit users in the form of managers and accountants which work in companies where the audit is not conducted. Due to the fact that this group of respondents is not exposed to the audit process, such results were expected. When analyzed at the level of all respondents, the areas where the knowledge gap is the most expressed include the level of auditors' assurance and the scope of their work. Namely, more than half of the respondents believe that the auditors are required to provide absolute assurance that the financial statements are free of material misstatements. As for the scope of the auditors' work, the majority of respondents also think that the auditor is obligated to assist the subject in correcting significant deficiencies in its internal control system, as well as examine the truthfulness of all the information contained in the subject's annual report.

audit of financial statements, audit quality, audit users, Croatia, knowledge gap

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