Is there an Accounting “Expectation Gap”?

In auditing one of the risks inherent in the process is the “Expectation Gap”. Put simplistically this is the gap between what the client expects as an outcome from the audit, and what the auditor can actually achieve. An example might be as follows:

Client – I expect the auditor to find every theft in the company, even the little ones

Auditor – I structure my work so that there is a reasonable chance of detecting fraud and error, but I don’t examine every document so I can’t detect every fraud

This is an ongoing problem that is a recognised part of auditing, and auditors try to manage this risk in a number of ways – including by including clear terms in the letter of engagement that explains to the clients that they will not be in a position to detect absolutely every single occurrence fraud and error. Rather they will detect material (i.e. sufficiently large to impact the company) fraud and error.

Expectation Gap in Accounting

The question I am asking here is similar gap in expectation in accounting. The examples I am thinkinf of are quite mundane:

• Have customers expected you to provide advice on the best structure for their business or personal finances?
• Do they expect to be able to contact you at a moments notice?
• Do they expect you to put in hours not directly related to basic accounting service but are surprised that this in not included it in your agreed base charge?
• Do managers or the Board in the company you work for expect you to wring data on performance out of a sub-standard records system?

To me all of the above examples also come under the heading of “Expectation Gap”. If that is the case then, just as in auditing, this gap needs to be clearly managed. How? Well a letter of engagement might be one approach, providing your customers with a clear charge card at the beginning of your relationship might be another, yet another is to have an “if in doubt policy” – if a client asks for extra work you tell them there and then what the charge will be. Also include a description of what work is being provided as part of a contract for an agreed price and include a clear statement that extra work will be charged at €X per hour.

These simple approaches can save a lot of trouble further down the line.