The algorithmic trust paradox: A multi-stakeholder analysis of the audit expectation gap in AI-assisted engagements

The integration of artificial intelligence (AI) into financial auditing disrupts traditional trust-building, significantly impacting the Audit Expectation Gap's dimensions of the Reasonableness Gap (RG) and Deficient Performance (DP). Utilizing Agency and Trust Transfer theories, this study explores these dynamics through Covariance-Based Structural Equation Modeling and Multi-Group Analysis of 431 professionals in Vietnam, comprising 206 auditees (chief accountants and internal auditors) and 225 beneficiaries (financial analysts and bankers). The participants represent a high-expertise cohort, with over 87% holding post-graduate or professional certifications and more than 45% possessing over 10 years of professional experience. The findings reveal a stark polarization in trust formation: auditees rely primarily on human auditor characteristics like competence and independence, whereas beneficiaries exhibit “algorithm appreciation,” grounding their trust entirely in AI capability and objectivity. Furthermore, institutional trust acts as a double-edged sword. While it effectively mitigates perceptions of DP, it paradoxically inflates the RG by triggering an “expectation halo effect” - a finding that refutes traditional literature which typically views trust as a harmonizing mechanism. where stakeholders falsely equate AI-assisted reasonable assurance with absolute algorithmic certainty. Ultimately, trust serves as a crucial mediator absorbing these socio-technical antecedents. This study contributes to behavioral auditing literature by highlighting the paradoxical capability of trust to exacerbate unreasonable societal expectations in a digital context. The results offer urgent practical implications for audit firms, business practitioners, and standard-setters, emphasizing the need for strategic expectation management and the careful calibration of trust as algorithmic agents become central to the audit process within emerging markets.