EFFECT OF AUDIT COMMITTEE ON AUDIT EXPECTATION GAP-MEDIATING ROLE AUDIT QUALITY

Abstract

This research aims to identify the effect of the audit committee on the audit expectation gap and also consider the mediating effect of audit quality on corporate governance and Audit expectation Gap. The research samples of 194 non-financial companies have been selected from the Pakistan Stock Exchange for the period from 2009-2018. Corporate governance measured from ACind, ACsze, ACmeet, ACexp, audit quality measured from audit firm size and audit expectation gap measured by proxy i-e difference between market price and share price. The finding of this research corroborates with existing research that components of corporate governance have a significantly negative association with the audit expectation gap whereas, they have a positive relationship with the mediating variable, audit quality. Furthermore, findings show that audit quality has significantly negatively associated with the audit expectation gap and it has significantly mediated the relationship among governance-gap.