Users' Perceptions of the Auditing Responsibilities for the Prevention, Detection and Reporting of Fraud, Other Illegal Acts and Error

This paper reports the results of a questionnaire administered to ascertain financial report users' perceptions of auditor's responsibilities for the prevention, detection and reporting of fraud and other irregularities, including other illegal acts and error. It appears that users may have "unreasonable" expectations of auditors' responsibilities for irregularities, particularly in relation to the prevention of fraud and the detection of illegal acts, and that a "deficient standards" gap may exist in relation to immaterial fraud. Users who had considerable business experience, were familiar with financial reports, had investment experience or had undertaken an auditing subject as part of their tertiary studies had more moderate expectations of auditors' responsibilities in relation to irregularities, and their perceptions were closer to those of the auditing profession than users who did not have these characteristics.