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Financial Accounting

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Expectations Gap

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Which of the following statements best expresses what is meant by the "expectations gap" in the field of accounting?

A

Accountants expect to be paid more than they are currently paid for the critical services they provide to society.

B

The general public believes that when an accounting firm audits a company’s financial statements, the audit provides assurance that these reports are free from all errors when in fact, at best, an audit allows an accounting firm to provide assurance that the statements are free from material misstatements.

C

The investing community expects financial statements to include valuation information for "soft assets" such as employee skills and internally generated goodwill and "hard assets" such as cash, buildings, and receivables, while accountants report only on "hard assets" at this time.

D

Ethics are critical to the accounting profession. As such, it is expected accountants will be aware of the ethical standards related to their particular focus (e.g., financial, managerial, auditing, tax, forensic, government and not-for-profit, etc.)