The Expectations Gap: Has SAS58 Changed The Publics Perception Of The Independent Auditors Legal Responsibilities?

Abstract

SAS58, one of the Expectation Gap auditing standards, changed the wording of the standard unqualified auditors report. The changes mandated by SAS58 do not reflect changes in the underlying auditing process or in the auditors responsibility for the audited financial statements. An experiment was conducted to determine whether these changes in the auditors report would affect jurors assessments of liability in an audit failure suit. No difference was found between liability assessments based on old and new forms of the report, suggesting that the changes mandated by SAS58 have no decision usefulness to report users.