Abstract:
This quantitative study comprehensively assessed the factors influencing the audit
expectation gap within Tanzania's public sector, focusing on the Arusha City Council.
The specific objectives were to assess the influence of communication practices,
regulatory frameworks related to financial reporting, auditing, and governance on the
audit expectation gap. The study was guided by Stakeholder Theory and Agency
Theory. It was conducted using a descriptive statistical research design. Quantitative
methods, including descriptive statistics and Pearson correlation analysis, were
employed to analyze data gathered through surveys. The study's location at the Arusha
City Council provided crucial access to data and stakeholders, ensuring the relevance
of the findings to policy decisions. A total of 186 questionnaires were completed from
an initial sample size of 243.In relation to the first objective, the findings revealed that
communication practices had a positive correlation with the audit expectation gap,
indicated by r = 0.662 and p = 0.000. Results regarding the second objective
demonstrated a strong positive correlation between regulatory frameworks and the
audit expectation gap, indicated by r = 0.770 and p = 0.000. Additionally, results
regarding the third objective showed a strong positive correlation between regulatory
frameworks and the audit expectation gap, indicated by r = 0.825 and p = 0.000.The
study concluded that effective communication practices significantly reduced the audit
expectation gap by clarifying audit objectives, scope, and outcomes, thereby
enhancing stakeholder satisfaction and trust. Robust regulatory frameworks were
found to play a pivotal role in aligning stakeholder perceptions with audit outcomes,
emphasizing transparency and compliance with international standards. Furthermore,
capacity-building initiatives were identified as critical in enhancing audit quality and
stakeholder satisfaction by improving auditors' technical expertise and adaptability.
The study recommended the importance of investing in training and tools to improve
communication skills among auditors, strengthening regulatory frameworks, and
prioritizing continuous professional development to bridge the audit expectation gap
in Tanzania's public sector. Future studies should focus on identifying the determinants
of audit quality.
