Day: August 17, 2025

Accounting Multiple Choice Question – 17 August 2025

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In the context of a statutory audit, which ONE of the following is NOT an example of the expectation gap?

The belief that?

Select ONE answer:

  1. the auditor’s report certifies the financial statements as correct
  2. the auditor’s principal duty is to detect fraud
  3. the auditor is employed by the directors
  4. the auditor checks all transactions

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

  1. Not correct
  2. Not correct
  3. Correct == >    The expectation gap is the gap between what users of financial statements believe the auditor does and what the auditor actually does. The following three are common manifestations of the expectation gap: • the auditor’s report certifies the financial statements as correct • the auditor’s principal duty is to detect fraud • the auditor checks all transactions. The belief that the auditor is employed by the directors is a common misconception but not a manifestation of the expectation gap. (The company employs the auditor, who is appointed by the shareholders in a general meeting.)
  4. Not correct

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