An Assessment of the Impact of Forensic Audit on Bridging the Audit Expectation Gap in Cooperative Societies: a Case of Central Kenya Cooperative Societies

KENYA METHODIST UNIVERISTY

MCOM

AN ASSESSMENT OF THE IMPACT OF FORENSIC AUDIT ON BRIDGING THE AUDIT EXPECTATION GAP IN COOPERATIVE SOCIETIES: A CASE OF CENTRAL KENYA COOPERATIVE SOCIETIES

BY:
JAMES MWANGI MAINA
ADMISSI0N NUMBER: 050686

THIS RESEARCH PROPOSAL IS PRESENTED IN PARTIAL FULFILMENT FOR THE REQUIREMENTS OF THE REQUIREMENTS OF MASTERS OF COMMERCE

FEBRUARY 2009

CHAPTER ONE

1.0 BACKGROUND OF THE STUDY

Cooperative societies are membership-owned entities that are established for the purposes of enhancing the economic well-being of their members. The individuals on their own come together with the aim of pooling their financial resources and then using these resources to advance credit facilities to them. In the process they have access to readily available credit (M’Itiri, 1995). Co-operative and the spirit of co-operation have been an integral part of humanity since the dawn of history. The very early man co-operated in activities such as gathering, hunting and fighting (M’Itiri, 1995).
The issue revolving round the expectations gap debate relates to the different and inconsistent meanings attributed to the definition of an audit by users of financial statements, the public and the audit profession. The “expectations gap” is the difference between what the public and users of financial statements perceive the role of an audit to be and what the audit profession claim is expected of them during the conduct of an audit. As mentioned in the introduction, this definition is preferred as it is important to distinguish between the audit profession's expectations of an audit on the one hand, and the auditor's perception of an audit on the other hand.

2.0 STATEMENT OF THE PROBLEM
According to the World bank report on observance of standards and codes (Rosc) of year 2001,   Kenya is a major economy in the east and central African region, and its success in improving economic performance is likely to have a significant demonstration...