This paper examines the changing scope of auditor responsibility in light of growing reliance on forward-looking estimates, fraud risk, and stakeholder expectations. It critiques the traditional Audit Risk Model, which assumes risks are quantifiable and independent, and shows how it fails to address uncertainties in areas such as expected credit losses, goodwill impairment, and fair value assessments. In response, newer frameworks like the Performance Materiality Model offer a more integrated approach by combining audit risk with accounting risk, better aligning with the complexities of modern audits. The discussion also highlights the audit expectation gap, which is the disparity between what the public expects auditors to do and what auditing standards require. Although stakeholders increasingly expect auditors to detect fraud and anticipate business failure, the auditor’s formal role remains limited to providing reasonable assurance. Professional skepticism, though crucial, is often reduced to procedural compliance rather than being practiced as a code of conduct. The paper argues that reframing auditor responsibility requires both methodological and cultural shifts in how skepticism is exercised and communicated. Auditors must adopt more flexible risk assessment tools, actively apply skepticism, and clearly communicate their role to stakeholders. Bridging this gap is critical to maintaining public trust and the relevance of the audit profession.
M Zhang (Thu,) studied this question.