Expanded audit report
Empirical studies have been conducted in the US, the UK and Australia to examine whether using an expanded audit report is effective in reducing an audit expectation gap. A survey conducted by Nair and Rittenberg (1987) in the USA revealed that an expanded audit report changes the users’ perceptions with regard to the responsibilities of the auditors. Likewise, Gay and Schelluch (1993) found that audit reports based on the revised Statement of
Auditing AUP3 (i.e. an expanded audit report) in Australia significantly improved users’ perceptions of the purpose of an audit, the audit procedures, as well as the responsibilities of the directors for the financial report. A similar study on the revised
AUP3 conducted by Monroe and
Woodliff (1994) confirmed the previous findings of Gay and Schelluch (1993). Over-all, the Australian findings are generally similar to the previous studies in the USA
(Kelly and Mohrweis, 1989; Miller at al.,
1990) and the UK (Hatherly et al., 1991) that longform audit reports improve and clarify users’ perceptions of the auditor’s roles and responsibilities in the financial reporting process.
The above studies provide evidence that an expanded audit report can be used as a way to reduce the audit expectation gap.
This is because it provides a better understanding of the nature, scope and extent of an audit; as well as the roles and responsibilities of the auditors and the management.

Structured audit methodologies
It is believed that the audit expectation gap is likely to reduce when the public is satisfied with the auditors’ performance.
Koh and Woo (1998) asserted that the use of more structured methodologies in the course of an audit helps to improve the auditors’ performance. Purvis (1987) examined the usefulness of adopting structured and semi-structured methodologies
of