Expectations Gap What is the expectations gap?
Some investors mistakenly view the unqualified audit report as an insurance policy against any and all losses from a risky investment. When they do suffer losses, these investors believe that they should be able to recover their losses from the auditor. This misperception has elements of an "expectations gap " whereby shareholders believe that they are entitled to recover losses on investments for which the auditor provided an unqualified opinion on the financial statements. This misperception, coupled with joint and several liability, class action lawsuits, and contingent fee compensation for lawyers, encourages large lawsuits against auditors, even for cases in which the auditor is only partially at fault or is not at fault.
You might also like to view...
Which of the following is true in regards to instant messaging?
A) IM is more secure than email. B) IM doesn't get misused as a one-to-many broadcast method as often as email does. C) IM takes longer to plan, write and send than email. D) IM is universally accepted in corporate communications. E) IM is typically used internally to the organization and is rarely used for customers and other important audiences.
Which of the following accounts includes the cost of completed but unsold units of a manufacturing firm?
A) Cost of Goods Sold B) Finished Goods Inventory C) Work in Process Inventory D) Materials Inventory
Consider the network diagram given in Figure 3 with the indicated flow capacities along each branch
What is the input-output constraint associated with the fifth node of the network diagram for the 0-1 integer linear programming formulation of the maximal flow problem?
Advertisers use shock advertising primarily to
A. reach conservative or older audiences. B. create an ethical model of shock advertising for others to follow. C. avoid controversy and scrutiny and deliver a direct message. D. increase the brand association of certain products. E. get consumers' attention amid the clutter.