Audit Expectation Gap of Government Auditees on the Duties of Public Sector Auditors in Sri Lanka

The phenomenon of the audit expectation gap (AEG) is a significant concern within the private sector while the AEG in the public sector has garnered little attention from scholars. However, it was found that the definition provided for the expectation gap is directly relevant to the context of public sector auditing as well. The purpose of this study is to investigate the differences in perceptions of government auditees on the duties of public sector auditors (PSA) in Sri Lanka. Further, it is expected to examine the causes for such differences in perceptions empirically. The sample was selected randomly from government sector auditees consisting of administrators, accountants, and senior staff members. Self-administered questionnaire including twenty existing duties of public sector auditors was used as the instrument for collecting primary data. Kruskal-Wallis test, a non-parametric test, was mainly performed to examine the significant differences of the auditee group, whereas the significant differences between groups were further examined by employing the Mann-Whitney U test. Perception gaps were found related to the existing duties of PSA, the perceived standard of performance of PSA, and the expected duties of PSA in Sri Lanka. It was further found that the AEG was widely spread between staff-associated groups rather than non-staff-associated groups. Consequently, it was concluded that AEG exists among the government auditees in relation to the duties of PSA in Sri Lanka. Further, five main causes for the AEG were recognized.