Abstract
The current study aims to explore the relationship between the moderating influence of auditors' psychological characteristics, particularly narcissism, and the financial expertise of the board of directors on the auditors' expectations gap. This investigation delves into whether the financial expertise of the board of directors impacts the auditors' expectaions gap. To achieve this objective, a questionnaire was employed to test the hypotheses. The research hypotheses were assessed using a sample of 246 auditors and managers from small and medium-sized companies in Iraq, utilizing PLS software. The results revealed a positive and significant relationship between the CEO's narcissism and the auditors' expectation gap. Additionally, there was a negative and significant relationship between the financial expertise of the board of directors and the auditors' expectation gap. Furthermore, the auditor's psychological characteristics were found to moderate the impact of the financial expertise of the board of directors on the auditors' expectation gap. Notably, this moderation did not influence the relationship between the CEO's narcissism and the auditors' expectation gap. A comprehensive review of existing literature indicated a dearth of research on the role of auditors' psychological characteristics as moderators due to the narcissism and financial expertise of the board of directors on the auditors' expectations gap, particularly in emerging markets. Consequently, this study contributes to filling this research gap, offering valuable insights into the dynamics of auditors' expectations in emerging markets and advancing scientific knowledge in this domain.
