Title: Auditing standards and the expectations gap: evidence from Spain

Authors: Emiliano Ruiz-Barbadillo; Nieves Gómez-Aguilar; Estibaliz Biedma-López; Nieves Carrera

Addresses: Facultad de Ciencias Económicas y Empresariales, University of Cadiz, Duque de Nájera, 8, 110 Cádiz, Spain ' Facultad de Ciencias Económicas y Empresariales, University of Cadiz, Duque de Nájera, 8, 110 Cádiz, Spain ' Facultad de Ciencias Económicas y Empresariales, University of Cadiz, Duque de Nájera, 8, 110 Cádiz, Spain ' Instituto de Empresas Business School, Pinar 15, 1st floor, 28006, Madrid, Spain

Abstract: This article examines the impact of auditing standards intending to reduce the audit expectations gap on auditors' behaviour. Specifically, we examine whether the adoption of an auditing standard ongoing concern evaluation in Spain is associated with changes in auditors' behaviour. Our empirical results suggest that the implementation of the new standard did not impact on auditors' propensity to issue going concern opinions; on auditors' interest on maintaining their reputation; and on the influence of auditors' economic incentives. Our results indicate that the implementation of auditing standards seems not to have an impact on day-to-day auditing practices, and therefore, auditing standards related to going concern evaluation fail to reduce the expectations gap. Our results also suggest that, in spite of the differences between the regulatory framework of auditing in Spain and in Anglo-Saxon countries (e.g., degree of state intervention), the impact of such standards on auditors' behaviour are comparable.

Keywords: audit report; going concern; auditing standards; expectations gap; auditing profession; auditor independence; auditor reputation; Spain; Anglo-Saxon countries; state intervention; auditor behaviour.

DOI: 10.1504/IJCA.2012.051462

International Journal of Critical Accounting, 2012 Vol.4 No.5/6, pp.483 - 510

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 18 Jan 2013 *

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