Big changes and new technology lead to expectations. Johan Lorentzon and Lazarus Fotoh at ý Business School have examined how the expectation gap in the audit industry affects change. Their research has been praised internationally.
What is your article “Audit Digitalization and Its Consequences on the Audit Expectation Gap: A Critical Perspective” about?
– The so-called expectation gap, which means that users of auditing information has expectations on auditing that cannot be fulfilled, has existed for a long time, says Johan Lorentzon, Senior Lecturer in Business Administration at ý Business School. Implementation of new technology has led to a paradigm shift in the audit industry, and the article is about how the expectation gap is affected by this change.
What are the most important findings in your research?
– Our study shows that the utilisation of digital tools in auditing has the potential to eliminate the expectation gap in certain areas, says Lazarus Fotoh, Lecturer in Business Administration at ý Business School. We also show that new dimensions of the expectation gap can arise and that these gaps can be mitigated if the audit industry acts proactively. In our article, we also predict a potential shift from a passive auditor role, where auditors inform about their obligations, to a more constructive approach. This can result in the fulfilment of more stakeholder expectations.
In what way can your findings be used in practice or contribute to the wider community?
– Our results contribute to practical applications by highlighting the opportunities related to the implementation of new technology in auditing, and how this can reduce the expectation gap, says Johan Lorentzon. Hopefully, this can contribute to a reinforced confidence in auditors, which in turn will increase the value of audits. Auditing has an important function in society, so it’s important that audits are effective and ready to meet future challenges.
– The audit industry must also be made aware of the potential challenges and limitations of new technology, says Lazarus Fotoh. Our study emphasises the need of updating standard practices in auditing in order to facilitate the implementation of new technology by auditing firms and auditors. Consequently, developers of auditing standards must update them, or at least provide guidance on how these technologies should be utilised.
Your article has received much praise, and the American CPE certification is internationally prestigious. What does all this recognition mean for ý Business School?
–The Certified Public Accountant (CPA) certification in the US is one of the most reputable in the world, says Johan Lorentzon. The course is offered to professional auditors in several states. California Society of Certified Public Accountants (CalCPA) has offered courses aimed at working professionals since 1909. They have 40,000 members. Massachusetts Society of Certified Public Accountants (Mass CPAs) was founded in 1900 and has approximately 11,500 members. It’s of course great if our research is included in their courses. One of the aims of ý Business School is: “We educate responsible, professional individuals and our research significantly impact society.” We hope to have contributed somewhat to achieving this goal.
