| dc.description.abstract | The audit expectation gap (AEG) is denoted as the difference between what the public
expects from an audit function and what the audit profession accepts the objective of
auditing to be. The existence of an audit expectation gap is likely to be detrimental to the
value of auditing and the well-being of the audit profession as the contribution of auditing
may not be fully recognised by society. This has stirred a number of professional and
regulatory reforms aimed at protecting shareholders who rely on the financial statements
for decision purposes. In spite of the existence of research pointing to the difference
between what the public expects from audit and what the audit profession accepts as the
objective of auditing, there appears to be paucity of research on how to address this issue
in Kenya.
The objective of this study was to investigate the existence of audit expectation gap in
Kenya and to determine its effect on investor confidence within the Nairobi Securities
Exchange. To meet this objective, primary data was collected using questionnaires
dropped and later picked. The respondents were 40 investors for companies listed in the
Nairobi Securities Exchange. The data was analysed using descriptive statistics which
included mean scores, percentages, measures of variability (ANOVA), and measures of
relative frequencies.
The study established that the Audit Expectation Gap does exist within the Nairobi
Securities Exchange. The study found out that the investors expected much more from
auditors with regard to their responsibility, did not deem the audit report to be reliable,
seldom used the audit report in making their decisions and finally it was established that | en |
