Audit Expectation Gap in Bangladesh

Publish Status:  Completed

Research For:  CHSR

Date:  28-May-2024

Year:  2024

Supervisor Name/Project Supervisor:  Mahfuzul Hoque, PhD Professor Department of Accounting & Information Systems University of Dhaka


The frequent market crash raised a lot of question during the past few years, deteriorated investors’ confidence. Questions have been raised as to why investors in the stock market of Bangladesh cannot rely on the financial figures just like other developed country’s stock market. Mainly disbelief in the financial figures arising from lack of accountability and transparency sprouted such thought process within the stakeholders. The auditors are burdened with a huge responsibility and at times they are also biased resulting into different scam which eventually destroyed the confidence over the market and the corporation itself. Independent audit is there to ensure the transparency and accountability but still the corporations are struggling due to various factors. The main objective of the paper is to explain how independent audit enhances the transparency and accountability in corporate sector of Bangladesh. The paper examines the factors for accountability and transparency along with relation with independent audit. Factors like internal control, Appropriate risk disclosure, Adherence with International Financial Reporting Standards (IFRS) structure and presence of competent internal auditor are incorporated in the study which consequently pointed out which area should be focused for further development. The study also investigates why accountability and transparency is not maintained within the corporations and if independent audit within the corporation can help to enhance it. Cross sectional deductive study has been conducted on primary data collected from two groups namely External auditor and Management. 5 Point Likert scale has been used in the questionnaire with 15 questions and Stratified sampling has been used for the fulfillment of the study. It has been evident that internal control, risk disclosure, adherence with IFRS and presence of competent internal auditor have a significant influence over maintaining accountability and transparency. Apart from this, presence of independent board helps the management to sustain better in the corporation and grow the confidence of the investors. The co-operation between the management and external auditor ensures the suitable environment which is appropriate to create accountability and transparency for the long run.

Key Words: Independent Audit, Transparency, Accountability, Corporation, Internal Control, Independent Board.