Abstract
The expectation gap according to Saladrigues and Grañó (2014), is the difference between the expectations of the auditors and those who use the audited financial statements. Furthermore Ijeoma (2014), noted that the expectation gap arises as result of the difference in expectations on the assurance that the auditors gives on the financial statements and those which the stakeholders expect from the work of the auditors. The expectation of the management of the Ministry of Foreign Affairs, the Ministry of Finance and Economic Development and the Parliament is that the internal auditors together with the Auditor General Department should detect fraud and error .The non-detection of these errors and fraudulent transactions and activities by the internal audit functions has raised questions by management and other users of financial statements as to why they were not initially noted by internal audit. This has piled pressure on the internal audit function such that, what internal auditors can reasonably achieve and what stakeholders expects of them has created an expectation gap. It has been reported that funds have been embezzled and misappropriated within the Ministry (Auditor General’s report, 2011-2013). These irregularities are in most cases unearthed by the external auditors. Ijeoma (2014) defined the expectation gap as the gap between the auditor’s actual standard of performance and the various public expectations of required standard of performance. The users of financial statements expect that the auditors will detect fraud and errors in the financial statements under audit, (Bogdanoviciute, 2011). Concerns have been raised as to why the internal auditors fail to unearth these irregularities before the external audit. According to Agyei et al (2013) , fraud detection was considered the main objective of internal audit until the 20th century, when it was directed towards verifications of the financial 4 statements in ascertaining the assurance level .Abubakar and Ojemen (2011) further pointed out that the audit expectation gap is critical to the auditing profession because the greater the unfulfilled expectation from the public, the lower the credibility earning potential and prestige associated with the work of auditors . Extensive content tests are being used by the public sector, according to Hematfar and Hemmati (2013). The technological developments and the complexity of the transactions being handled have however necessitated the transition to risk based auditing, (Messier Jr, 2014).By definition, risk is an internal methodology which is primarily focused on the inherent risk involved in the activities or system and provide assurance that risk is being managed by the management within the defined risk appetite level (Institute of internal Auditors (IIA)). Risk based auditing according to the Institute of Internal Auditors (IIAs) (2014), allows internal auditors to concentrate on reviewing the major risks of the organization. Unlike extensive vouching which is the current practice, team members and resources are concentrated on the areas which need greater attention, Prinsloo (2008).Further Hematfar and Hemmati (2013), noted that risk based auditing goes further than traditional auditing by considering business risks over and above audit risks. However the major question for which this study need to unearth is whether the adoption and implementation of such an audit approach will reduce the expectation gap in the public sector.
