Q25Q. - Intermediate Accounting (Kieso)

Question

What is the “expectations gap”? What is the profession doing to try to close this gap?

Step-by-Step Solution

Answer

The “expectations gap” is the distinction between the actual and the estimated performance of accountants. It is a challenging gap to close. The accounting profession realizes it must play a vital role in reducing the gap.

Step 1: Meaning of Accounting Profession

The accounting profession is the profession of maintaining records and auditing and organizing financial reports for a business for the purpose of presenting financial statements.

Step 2: Expectations gap and role of the accounting profession in closing the gap

The expectation gap is the variation in the people’s expectations regarding accountants’ performance and what accountants can actually perform. However, is not easy to close the gap. The accounting profession identifies that it must play a significant role in decreasing the gap. For meeting the requirements of society, the profession is advancing its efforts in progressing accounting standards, like issuance of various pronouncements by the FASB, providing support in recording and handling business transactions in the dynamic environment.