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Volume :15 Issue : 3 2008      Add To Cart                                                                    Download

CORPORATE AUDITING EXPECTATION GAPS IN DEVELOPING MARKETS: EVIDENCE FROM SAUDI ARABIA

Auther : ABDULRAHMAN A. AL-TWAIJRY

This study endeavors to identify the existing corporate audit expectation gaps in developing countries such as Saudi Arabia, and to suggest ways for bridging these gaps. Based on an interview comprising of 128 individuals from five different groups: academic staff, external auditors, directors of internal audit departments from the private sector, general managers or their deputies from private companies, and finally relevant prominent figures of society, the five various gaps were identified. These were: (1) gap between what corporate management believe external auditors do when performing the independent audit and what their real task is, (2) gap between how the corporate management should appreciate its internal audit and how management recognizes internal audit in reality, (3) gap between what those being audited expect corporate auditors search for when performing their duties and what internal auditors real job is, (4) gap between what the private sector requires from internal auditors (qualification and experience) and what the internal auditor's actual qualifications and experiences are, (5) gap between the scope of internal audit as expected by the professional standards (SPPIA) and what internal auditors are actually doing. The existence of such gaps results in delaying the development of the corporate audit profession, and probably weakening corporate governance. Possible ways of bridging these gaps include: i) educating relevant parties of the actual role of internal and external audit and how they work together, ii) enhancing collaboration between corporate internal auditors and audited parties, iii) adopting an effective mechanism to ensure corporate auditors are qualified, iv) establishing an effective internal professional body to serve the whole region.

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