Assurance provided by auditors' reports on prospective financial information: implications for the expectation gap

The results of this study indicate significant differences in beliefs between auditors, users and preparers of prospective financial information, concerning forecast reliability and the role and responsibilities of auditors and management. Contrary to the usual published studies on expectation gap, it was found that auditors believe that forecasts are more reliable than users or preparers. Auditors also believe that they have a higher level of responsibility and accountability than is attributed to them by users or preparers. Beliefs were affected by the type of report issued by the auditor and subjects were able to discriminate between the level of assurance provided by positive and negative assurance opinions. However, based on the responses of shareholders, it appears that the negative assurance opinion on assumptions for an audit might confuse users and might not meet the demands of the market.