Empirical Studies in Financial Accounting

Abstract the disclosure of material corporate information therein, the auditing of such reports has attracted the attention of capital market stakeholders. Accordingly, the aim of this study is to examine the existing ambiguities in the auditing practices of MD&A reports and to propose strategies for their resolution. This research adopts a qualitative approach, employing grounded theory and interviews with 24 experts, including auditing professionals, capital market analysts, managers of listed companies, and officials from the regulatory authority. The initial interviewees were selected based on theoretical sampling, drawing on their expertise in the subject area, and subsequent participants were identified through snowball sampling. The collected data were analyzed using open, axial, and selective coding techniques. Based on the findings, the main ambiguities in the current auditing practices of MD&A reports include: the auditor’s level of responsibility with respect to MD&A; the auditor’s opinion on MD&A in the context of interim financial statements; and the examination of forward-looking information in MD&A by the auditor. The key proposed strategies to address these ambiguities are: removing forward-looking information from MD&A or entering into a separate engagement with corresponding fees for the auditor to opine on these reports; refraining from expressing an opinion on MD&A in the context of interim financial statements or issuing such an opinion in accordance with review engagement procedures; and expressing an opinion on forward-looking information in MD&A in line with the relevant auditing standard.

Introduction

Given the economic conditions of Iran, which have, due to sanctions, resulted in severe inflationary pressures, systematic risks in the market have increased, and uncertainty about the future has intensified. In such an environment, investors require reliable information beyond financial statements in order to make informed decisions regarding participation in the capital market. Management’s Discussion and Analysis (MD&A) represents one of the appropriate reporting tools through which an adequate level of transparency can be established in the capital market, thereby facilitating the channeling of liquidity toward this market. In this regard, auditing MD&A is of particular importance for enhancing its reliability. However, the inherent complexity and the qualitative and interpretive nature of MD&A pose significant challenges for auditors. One of the main challenges in auditing MD&A is the absence of clear and globally accepted auditing frameworks and standards. At present, independent auditors do not provide any assurance on MD&A and merely read these reports for the purpose of identifying potential material inconsistencies with the financial statements. Consequently, under the existing practice, the manner in which credibility is attributed to MD&A is ambiguous, and it is unclear who would be held accountable in the event of material misstatements in these reports. Accordingly, the present study first seeks to identify the existing ambiguities in the current practice of auditing MD&A and the consequences arising from these ambiguities. In the next stage, it aims to identify appropriate strategies, as well as the necessary infrastructures, to eliminate the existing ambiguities and their associated consequences. The research questions addressed in this study are as follows:

What ambiguities exist in the current practice of auditing MD&A?
What are the consequences of the existing ambiguities in the current practice of auditing MD&A?
What strategies can be adopted to resolve the ambiguities in the current practice of auditing MD&A?
What infrastructures are required to improve the process of auditing MD&A by independent auditors?


Literature Review

Overall, prior studies conducted in the area of auditing Management’s Discussion and Analysis (MD&A) have primarily emphasized the importance of auditing MD&A in enhancing the credibility of these reports, users’ demand for auditors’ opinions and assurance on MD&A, as well as the influence of auditors on the tone of MD&A. In addition, several studies have examined the relationship between the quality of MD&A and auditors’ efforts in auditing these reports, as well as audit fees. Moreover, some studies have focused on the role of the audit committee in the preparation of MD&A and have concluded that the presence of a knowledgeable and expert audit committee contributes to improving the quality of MD&A auditing.

Methodology

The present study was conducted using the grounded theory methodology through interviews with 24 experts from the auditing profession, capital market analysts, managers of listed companies, and specialists from the regulatory authority. The initial interviewee was selected through theoretical sampling, based on their recognized contributions and viewpoints in the subject area of the study. Subsequently, the sample was expanded for later interviews using the snowball sampling technique. The research data were analyzed using open, axial, and selective coding. This process resulted in the development of a coherent and applicable theory regarding the existing ambiguities in the practice of auditing Management’s Discussion and Analysis (MD&A) in Iran and the strategies for addressing them, which can be utilized in both academic and practical contexts.

Results

Based on the research findings, the ambiguities identified in the current practice of auditing Management’s Discussion and Analysis (MD&A) include the level of the auditor’s responsibility with respect to MD&A, the auditor’s opinion on MD&A in the context of interim financial statements, and the auditor’s examination of forward-looking information disclosed in MD&A. The principal strategies identified to address these ambiguities include: eliminating forward-looking information from MD&A; entering into a separate engagement and paying a distinct audit fee to the auditor for providing an opinion on MD&A; refraining from expressing an auditor’s opinion on MD&A in relation to interim financial statements or, alternatively, expressing an opinion in accordance with the procedures applied in review engagements; and providing assurance on the forward-looking information disclosed in MD&A in accordance with Auditing Standard 3400.

Discussion

With respect to the auditor’s responsibility for Management’s Discussion and Analysis (MD&A) and the corresponding strategies, two distinct perspectives emerged among the experts. One group of interviewees believes that the auditor bears no responsibility for MD&A or for any potential material misstatements therein, and that the auditor’s role should be limited to reading MD&A solely in connection with the primary responsibility of auditing the financial statements and reconciling the information disclosed in MD&A with the financial statements. This group argues that, under the current circumstances, the appropriate strategy for auditing MD&A is for the independent auditor to refrain from accepting any responsibility with respect to these reports. Furthermore, independent auditors, according to this viewpoint, should neither enter into separate engagements nor receive separate fees for procedures related to MD&A. In contrast, another group of interviewees contends that, given the guidance issued by the Securities and Exchange Organization regarding the auditing of MD&A and the paragraph included in the auditor’s report pursuant to such guidance, the independent auditor does bear responsibility for MD&A. This is because the auditor’s report is subject to public interpretation, and the inclusion of this paragraph leads users to infer that the auditor’s opinion on the financial statements extends to MD&A as well, thereby implying that assurance has also been provided on this report. Accordingly, the appropriate strategy from this perspective is for the independent auditor to become formally involved in the auditing of MD&A, to enter into separate audit engagements for MD&A, and to receive a separate fee for auditing these reports.

Conclusion

It appears that, given that the independent auditor’s report is closely examined by market stakeholders and users of financial information, the auditor bears responsibility for Management’s Discussion and Analysis (MD&A) through the paragraph included in the “Other Information” section of the auditor’s report. Moreover, pursuant to paragraph T-32 of Auditing Standard 720, specific responsibilities are assigned to the independent auditor in relation to other information, to the extent that, if the auditor is unable to conclude that no material inconsistency exists in the other information or that no material misstatement is present therein, withdrawal from the audit engagement—where permitted by laws or regulations—is recommended. In addition, the auditor’s ethical and professional responsibilities require that the auditor not remain indifferent to misstatements or deviations in financial reporting, including those in MD&A, that may mislead users of financial information, and that the auditor fulfill their credibility-enhancing role with respect to the information disclosed in such reports. Therefore, if—based on these arguments—the independent auditor’s responsibility for MD&A, as one of the key reports communicated to the market, is acknowledged, the auditor’s risk in fulfilling their assurance responsibilities over financial information increases. Consequently, it is reasonable to consider the execution of separate engagement contracts and the payment of separate audit fees to independent auditors for the examination of MD&A.
 
 
 

Abstract Given the regulatory requirement to publish unaudited annual financial statements before the audited versions in Iran's capital market and the significant discrepancies between the two, this study examines the interactive effect of investors' experience and changes in post-audit net income on the perceived credibility of three key pillars of financial reporting (audited financial statements, management, and independent auditors). A 2×2 between-subjects experimental design (investment experience: low/high; income change: increase/decrease) was employed, with 119 finance graduates as investor participants. Data were collected via an online questionnaire in August 2024 and analyzed using rank ANOVA in SPSS-24. Results reveal that investors with low experience, reacting to a post-audit decline in net income, assign lower credibility to audited financial statements and independent auditors, whereas experienced investors remain unaffected by such changes. Notably, regardless of experience level or income change, investors consistently rated managers’ credibility lower than that of auditors. These findings underscore the need for investor education and enhanced audit process transparency to mitigate perceptual gaps across investor groups. Introduction This study investigates how discrepancies between unaudited and audited financial statements—specifically, changes in net income following the audit process—influence the credibility assessments of investors with varying levels of investment experience. According to the executive bylaws of the Tehran Stock Exchange (since 2007), listed companies are mandated to disclose unaudited annual financial statements within 60 days of their fiscal year-end. However, the release of audited statements can be delayed until 110 days after the year-end. This dual-disclosure framework creates a unique informational environment. The early release of unaudited statements enhances transparency and mitigates information asymmetry by providing stakeholders with preliminary financial data. Conversely, the subsequent audited version offers a more reliable representation of the company's financial status. While this process aims to ensure a continuous information flow to the market, the existence of material differences between the two versions can pose significant challenges for investors. This research focuses on how these post-audit income changes affect investors' perceptions of the credibility of three pillars of financial reporting: company management, the independent auditor, and the audited financial statements. Understanding these dynamics is crucial for evaluating the effectiveness of current disclosure policies and for developing measures to enhance market efficiency and protect investor interests.   Literature Review This research is grounded in the tension between rational-assurance theory and cognitive psychology. The rational perspective posits that audited financial statements inherently possess higher credibility than unaudited versions, and thus, post-audit adjustments should not diminish their perceived credibility (Hodge, 2001; Libby, 1979; Mercer, 2004). Conversely, cognitive psychology, through the lens of negativity bias, predicts that investors weigh negative information more heavily, meaning that a post-audit earnings decrease could damage the credibility of the final financial statements (Baumeister et al., 2001; Pratto & John, 1991). This effect is compounded by investors' tendency to integrate audited and unaudited information (Hodge, 2001). A key moderating factor is investor experience. Experienced investors, shaped by adaptive market learning (Lo, 2004), typically develop a better ability to control emotional reactions to negative news (Gervais & Odean, 2001). Novice investors, however, are more susceptible to cognitive biases. Furthermore, the self-serving attribution theory (Heider, 1958) explains how investors assign blame: novices are more likely to attribute negative outcomes (like an earnings decrease) externally to management or the auditor, while experienced investors may make more internal attributions (Gervais & Odean, 2001; Dhar & Zhu, 2006). Based on this framework, the study tests the following hypotheses: H1: A decrease in post-audit net income reduces the credibility of audited financial statements more for novice investors than for experienced investors. H2: Novice investors will assign lower credibility to audited financial statements following a decrease in post-audit net income compared to an increase. H3: A decrease in post-audit net income reduces the credibility of company management more for novice investors than for experienced investors. H4: Novice investors will assign lower credibility to company management following a decrease in post-audit net income compared to an increase. H5: A decrease in post-audit net income reduces the credibility of the independent auditor more for novice investors than for experienced investors. H6: Novice investors will assign lower credibility to the independent auditor following a decrease in post-audit net income compared to an increase.   Research Methodology This experimental study employed a 2x2 between-subjects design to investigate how investment experience (inexperienced/experienced) and post-audit net income changes (12% increase/decrease) influence investors' credibility judgments. Using an online questionnaire, 119 finance graduates, recruited via LinkedIn, were randomly assigned to one of four conditions. Participants, acting as current investors in a hypothetical firm, reviewed unaudited and subsequently manipulated audited financial statements. Their assessments of the credibility of the audited statements, company management, and the independent auditor were then measured using validated Likert scales, with data analyzed using rank-based ANOVA to ensure robustness.   Results and Discussions The results revealed a significant interaction effect between investor experience and post-audit income change on the perceived credibility of audited financial statements (F = 9.413, p<0.01). As hypothesized, novice investors significantly downgraded their credibility assessment when faced with a 12% decrease in post-audit income (Mean = 6.15) compared to an increase (Mean = 7.97, p<0.01), while experienced investors' judgments remained stable (Mean = 7.88 vs. 7.41, p=0.368), confirming that experience mitigates negativity bias. For auditor credibility, a similar pattern emerged: novices assigned significantly lower credibility to auditors following an income decrease compared to experienced investors (Mean = 6.72 vs. 7.52, p = 0.035), aligning with self-serving attribution theory, where novices externalize blame. Conversely, the credibility assessments of company management were unaffected by either experience or income change, suggesting a persistent, underlying distrust in management among all investors, regardless of experimental conditions.   Conclusions This study demonstrates that investor experience critically moderates reactions to discrepancies between unaudited and audited net income. Novice investors, influenced by negativity bias, significantly downgraded their credibility assessments of both audited financial statements and the independent auditor following a post-audit net income decrease, while experienced investors' judgments remained stable. This aligns with cognitive theories in which novices disproportionately externalize blame for negative outcomes. Notably, the credibility of company management remained persistently low across all conditions, indicating a deep-seated, structural distrust in management that is unaffected by positive news or investor sophistication. These findings highlight a vulnerability among retail investors in emerging markets like Iran, where the mandatory early release of unaudited statements can lead to significant reassessments upon audit completion. For regulators and standard-setters, this underscores the need for enhanced investor education and potentially revised disclosure timelines to mitigate the cognitive biases uncovered. Future research should explore different magnitudes of earnings adjustments and incorporate varied auditor opinion types to further generalize these findings.      

Abstract Considering the scientific and practical significance of research in this field, conducting a bibliometric analysis aimed at mapping the global status, trends, factors, and bibliographic relationships within this domain is necessary and has not yet been comprehensively addressed. In this study, articles published in the research domain were collected from the Scopus database for the period spanning 1986 to 2024. Subsequently, to enable a more focused analysis, 38 articles closely aligned with this area were selected. The VOSviewer software was employed for the bibliometric analysis. Based on the bibliometric analysis, the keyword "merger" emerged as a core term, surrounded by other closely related major nodes such as "audit firm merger," "audit quality," "audit fees," "audit efficiency," and "competition," all directly linked to the main research theme. The United States, the Auditing: A Journal of Practice & Theory, and the fields of business, management, and accounting were identified as the most influential in this research area. Additionally, among researchers, Moroney demonstrated the highest level of collaboration with Simnett and Thavapalan. This study elucidates the intellectual and conceptual structure of audit firm mergers, highlighting emerging topics such as auditor-client alignment, audit regulation, market share, auditor switching, and audit efficiency. The findings of this research provide a relatively comprehensive overview of the literature on audit firm mergers throughout its evolution, while also offering future research directions for scholars.

Introduction

Regulators and critics of mergers often express concern that a merged audit firm, due to its enhanced market position, may harm its clients. Following a merger, the number of audit service providers decreases, making it more difficult for audit clients to switch to an alternative and appropriate audit firm at more reasonable audit costs. The merger of audit firms has become one of the key concerns in the auditing profession and has attracted the attention of recent studies. Studies related to the merger of audit firms can be categorized into several phases. These phases include the pre-merger stage (antecedents), the merger stage (agreements), and the post-merger stage (consequences). A review of prior research suggests that the post-merger phase of audit firm mergers has predominantly attracted researchers’ attention. Despite numerous studies on the consequences of audit firm mergers, a research gap remains in the area of antecedents and agreements in these mergers. Therefore, given the scientific and practical importance of research in this field, a bibliometric analysis aimed at mapping the global discourse on audit firm mergers and their bibliographic relationships is essential; however, this topic has not been thoroughly explored. This study, by providing a comprehensive overview of the status of audit firm merger research, identifying existing gaps in the literature, and revealing future research trends, serves as a valuable resource for researchers. Moreover, the present study highlights the evolution and trajectory of research related to the literature on audit firm mergers.
 

Method

 The present study employs a bibliometric methodology within a literature review approach. This quantitative method of reviewing the literature advances understanding of the intellectual structure and evolution of a specific academic field. It aids in visualizing data and performing thematic analyses to better understand the content of research related to audit firm mergers. Additionally, it provides valuable insights for researchers in this domain. In this paper, the process of identifying, screening, qualifying, and analyzing data was systematically implemented. The researchers initiated the process by selecting the Scopus database to collect information from relevant articles. Scopus was chosen as the bibliometric data source due to its applicability across various academic fields and, in this study, for examining the literature on this topic. Initially, a search was conducted to identify articles related to the specified domain. To execute the search, the terms “audit firm mergers,” “audit firm integrations,” “audit firm acquisitions,” “audit firm consolidations,” and “professional services firm mergers” were used in the titles, abstracts, and keywords of articles indexed in the Scopus database. Next, inclusion criteria were established, and articles were filtered based on the 1986–2024 timeframe. More precisely, based on the literature review, only articles published during this period were selected. Subsequently, English was designated as the language criterion, and the type of publication was restricted to peer-reviewed research articles. As a result, only English-language research articles published in the fields of business, management, and accounting; economics, econometrics, and finance; and social sciences were considered for this study. The screening stage ultimately led to the identification of the targeted articles. To ensure their relevance, the titles and abstracts of the articles were reviewed, and irrelevant articles were excluded. Ultimately, 38 articles were included in the analysis. Based on the research process, the final stage involved data analysis, which was performed using the Vosviewer software. Co-occurrence analysis, defined as the repetition of similar keywords across different articles, was conducted. Co-occurrence analysis and the identification of frequently used keywords highlight key research topics. Furthermore, co-citation analysis and co-authorship analysis were performed using the software. Specifically, if two keywords representing a particular research topic appeared simultaneously in a document, those keywords were considered to have a meaningful semantic relationship.
 

Findings

The progression of the literature on audit firm mergers indicates that this field was relatively underexplored until 2002. In other words, this topic did not receive significant attention from researchers before that year. Over time, as the importance of the subject matter examined in this research grew, the number of published articles showed an upward trend, reflecting the rising significance of the topic. From 2002 onward, the field has experienced fluctuating growth, suggesting that substantial research will continue to be conducted in this area through 2024 due to its critical importance. Among the countries contributing to the body of research, the United States leads with 20 publications, followed by the United Kingdom with 8, and Hong Kong with 6. Regarding research areas, the majority of articles pertain to business, management, and accounting (57.1%), followed by economics, econometrics, and finance (38.1%), and social sciences (4.8%). Most articles were published in reputable journals such as Auditing: A Journal of Practice and Theory (4 articles), Contemporary Accounting Research, and the Journal of Accounting and Public Policy (3 articles each). The keyword “mergers” emerged as the central theme, with closely associated major nodes such as audit firm mergers, audit quality, audit fees, audit efficiency, auditor-client alignment, the audit market, knowledge transfer, industry specialization, audit reporting delays, and audit market dynamics, all aligning with the primary focus of this study. In total, 89 authors have contributed to research on audit firm mergers, forming a collaborative network of researchers. The distribution of scholars within this field reveals that several authors have worked together on multiple projects. For instance, Moroney, in collaboration with Simnett and Thavapalan, has co-authored several studies and accounts for the highest number of publications in this domain.
 
Conclusion
The present study systematically reviews articles on audit firm mergers published between 1986 and 2024, mapping the knowledge network through keyword co-occurrence analysis and co-authorship analysis. The keyword "mergers" was identified as the central theme, with closely related major nodes including audit firm mergers, audit quality, audit fees, audit efficiency, auditor-client alignment, the audit market, knowledge transfer, industry specialization, audit reporting delays, and audit market dynamics, all aligned with the primary focus of the study. The findings indicate that, while the topic of audit firm mergers was underexplored until 2002, interest in the field has shown an upward trajectory in subsequent years, reflecting its growing significance, with notable research activity expected to continue through 2024. The United States leads the field with 20 publications, followed by the Auditing: A Journal of Practice and Theory with four articles. The domain of business, management, and accounting accounts for 57.1% of publications, and prominent contributors include Moroney, Simnett, and Thavapalan, each with three highly relevant studies. Future research directions in this field should focus on emerging topics such as auditor-client alignment, market share, auditor switching, audit regulations, audit reporting delays, and audit efficiency. Based on the literature review, future investigations should aim to enhance academic awareness of approaches to audit firm mergers and the associated keywords. The results of this study offer a comprehensive overview of the literature on audit firm mergers over time, providing valuable insights for researchers regarding topic selection, potential collaborators, and research centers for potential funding opportunities.

Abstract In recent years, increasing attention has been paid to the adoption of information technology (IT) in organizations, particularly in the field of internal auditing. Integrating IT tools and systems into traditional auditing practices is a key driver for improving the efficiency, effectiveness, and accuracy of internal audit processes. This study aimed to explore the challenges, barriers, and solutions for IT integration in the internal auditing processes of companies listed on the Tehran Stock Exchange. A qualitative approach was adopted, and data were collected in 2024 through interviews with 18 internal audit experts. Thematic analysis was performed using MAXQDA software. The findings revealed that the primary challenges and barriers to IT integration in internal auditing were organizational limitations, technical constraints, auditors' perceived barriers, and insufficient training. To address these issues, the following solutions were proposed: promoting a culture of IT adoption, organizational commitment to implementing new technologies, providing the necessary infrastructure, and reinforcing employees’ training and IT-related skills.

Introduction

In recent years, the role of technology in organizations, particularly in internal auditing, has become increasingly critical. It is now essential for improving processes and ensuring accountability in today’s digital environment (Mohd Noor & Mansor, 2019; Ronkko et al., 2018). Traditional auditing approaches, which rely on manual work and paperwork, are both time-intensive and resource-heavy (Eulerich et al., 2021). Adopting technology in internal auditing is crucial for several reasons. First, technology can simplify auditing processes by automating repetitive tasks, giving auditors more capacity to focus on important areas such as risk evaluation (Al-Hiyari, 2019). Second, it can enhance the precision of audits by processing complex data and minimizing errors, resulting in higher-quality reports (Jaber & Abu Wadi, 2018). Third, using technology enables real-time access to data, allowing auditors to monitor financial activities and compliance more effectively (Mohd Noor & Mansor, 2019). This study examines the challenges and potential approaches to introducing technology into internal auditing in companies listed on the Tehran Stock Exchange. It seeks to answer the question: What challenges and approaches do experts identify for integrating technology into internal auditing?

Theoretical Background and Literature Review

Davis’s (1989) Technology Acceptance Model explains two factors that influence whether people adopt new tools: how useful they believe the tools will be and how simple they are to use. These factors shape the decisions of internal auditors when considering new technologies (Radner & Rothschild, 1975). Ease of use refers to how much effort a person expects will be needed to work with a system. For auditors, this includes whether the tools are straightforward, easy to learn, and well-supported. Integrating technology with traditional auditing practices offers opportunities for improvement, such as making processes faster, more accurate, and more effective. However, studies show that despite these advantages, technology adoption in auditing has not progressed as expected in Iran. While some research has explored the reasons behind this slow uptake, there is little analysis of the specific challenges and solutions involved. This study aims to fill that gap by examining these issues and providing recommendations.

Research Methodology

This research is qualitative and uses thematic analysis. It is a cross-sectional study carried out in 2024. The participants included internal auditors from companies listed on the Tehran Stock Exchange, selected using the snowball sampling method.
 
The reliability of the interviews conducted in this research, calculated using the above formula, is 77%. Since this value is greater than 60%, the coding reliability of this study is confirmed.

Discussion and Conclusion

This study aimed to explore the challenges, obstacles, and approaches to incorporating information technology into internal auditing through an analysis of participant responses. The findings point to several difficulties, including structural issues within organizations, technical challenges, and auditors’ perceptions of technology use. The study also highlights a gap in providing proper training for internal auditors in this area. Despite rapid advancements in technology, companies are not allocating enough resources to prepare their staff. Moreover, since many auditors are older, offering training often requires significant effort and expense. To address these issues, organizations can focus on helping managers and employees better understand the benefits of using technology in internal auditing. Explaining how it adds value to their work and showing clear examples of cost efficiency can reduce resistance. Another important step is creating a workplace environment that encourages fresh thinking and supports the adoption of modern tools. This can inspire auditors to explore and use technology more confidently.
 
 

Abstract The purpose of this study is based on two analytical objectives. First, it aims to identify the areas in which hegemonic power dynamics are embedded within audit institutions in order to provide a paradigmatic theoretical framework. Second, it seeks to evaluate the results of the hegemonic power within the structure of audit institutions, with the goal of determining the most central factor that reduces the quality of auditors' working life. The methodology of this qualitative study is grounded in inductive philosophy. The qualitative phase employed grounded theory using the approach of Strauss and Corbin (1998), while the quantitative phase utilized interpretive ranking analysis. The findings from the qualitative phase, based on 13 interviews, resulted in the identification of 426 open codes, 46 themes, 14 components (axis), and 8 main categories through the grounded theory process. The results of the quantitative phase also indicated that the most central outcome arising from the spread of hegemonic authoritarianism in audit institutions is the emergence of work-family conflicts among auditors.
Introduction
Audit firms, like any organizational structure, are shaped by frameworks governed by the administrative approaches of audit partners to achieve formal, standardized, and specialized objectives. These frameworks result in the firm's strategic orientations within the audit market. Part of these strategic orientations pertains to operational areas, while another part relates to behavioral management methods. Depending on each partner’s cognitive and learning approach, these methods significantly influence auditors’ behavioral dynamics. Moreover, the type of managerial interaction, whether rooted in collaboration or authoritarianism, can lead either to synergies in audit quality or, conversely, to professional dissatisfaction and frustration among auditors.

2. Literature Review

In every area of ​​organizational communication, power is considered a determining factor in the interactions and responses of individuals within a structure. In this context, paying attention to different levels of power structures, while considering organizational complexities, seems necessary, as the process of power within organizations can have varying consequences in advancing organizational goals and strategies, depending on how it is formed. Each perspective defines the functions of power differently. For example, from a behavioral perspective, power is shaped through interactions with others based on initial trust. Depending on the ambition of the individual in power, this trust can be either strengthened or undermined.

Methodology

Given the three distinct mechanisms in the methodology of humanities research, namely purpose, result, and data type, this study should be considered exploratory in terms of purpose. This is because the emerging aspects of the central phenomenon of the study, namely the dominant hegemonic power orientation in auditing institutions, can be explained through interviews that provide a theoretical framework within the auditing profession. In terms of results, this study is developmental, as it aims to expand the understanding and capacity of this phenomenon within auditing knowledge through a set of analytical processes that lead to deeper insights into the nature of the subject. Regarding data type, this study falls into the category of mixed-method research. It addresses the research questions in the qualitative phase using grounded theory and the Delphi method, and in the quantitative phase through sequential matrix processes. The philosophical foundation of the study supports the integration of both inductive and deductive approaches. In the inductive process, the study first seeks to design a theoretical framework for the central phenomenon through grounded theory analysis using three stages of coding to develop a paradigmatic model. Then, following a deductive approach and based on the richness of the qualitative data, this study aims to examine the most central negative consequence of the emergence of hegemonic powerism in audit institutions by evaluating paired comparisons in row "i" and column "j".

Result

This study, which was conducted in two phases, qualitative and quantitative, used a combined analytical implementation approach. It aimed to present a paradigmatic framework for the spread of dominant hegemonic power in auditing institutions through grounded theory following the approach of Strauss and Corbin (1998) and to evaluate the outcomes of the framework developed in the qualitative phase using an interpretive ranking matrix within the context of the auditing profession. The results of the study showed that the most central outcome resulting from the spread of dominant hegemonic power in auditing institutions is the emergence of work-family conflict among auditors (M4).

Discussion

In analyzing the results, it must be acknowledged that the spread of hegemonic power within auditing institutions contributes to professional conflict, leading auditors to experience disorders that arise from the tension between work and personal life. Over time, this issue can not only lead to professional frustrations but also negatively affect auditors’ other social roles, as spouses, children, and parents, ultimately challenging the quality of their professional lives. Given that the most significant outcome identified in this study is the emergence of work-family conflict among auditors, it is important to highlight the overlap of roles in professional careers. This overlap disrupts the mental and cognitive clarity required for effective auditing and results in the erosion of professional and technical capabilities. As a result, the desired balance promoted by the code of professional conduct, aimed at reducing audit risk, may no longer be maintained. With the loss of personal self-confidence, auditors may experience a decline in professional effectiveness in audit reporting functions. Moreover, the psychological burden imposed on auditors will likely extend to their family life as well.

Conclusion

Given the significance of this study, it is recommended that policymakers in the auditing field, beyond focusing solely on auditing standards, also strengthen or revise codes of professional conduct to regulate the management and leadership styles of audit partners. Doing so could enhance the effectiveness of mechanisms for implementing the audit profession and contribute ​​to the creation of more reliable social value for the profession. Additionally, it is suggested that a guild or association be established to protect the rights of auditors. Such a body could play a critical role in reducing the authoritarian behavior of dominant audit partners and mitigating instances of gender discrimination within audit firms.

Abstract The purpose of this research is to contextualize the strategic thinking of auditors' bricolage functions in controlling the occurrence of auditing profession pressure spillover disorders. In the qualitative phase of this study, the functional areas of auditors' bricolage strategic thinking and the disorders caused by auditing profession pressures were identified. Using grounded theory and systematic content screening, followed by the implementation of the fuzzy Delphi analysis process and verification of the reliability of the identified dimensions, these functional areas were expanded for the study platform. The findings from the qualitative phase indicate the identification of 36 conceptual themes, 6 core components, and 3 categories related to the variables of auditors' bricolage strategic thinking functions. The results further show that by improving the efficiency of auditors’ negotiation abilities through the development of bricolage strategic thinking, conflicts arising from tolerating employer pressure due to the demands of the auditing profession can be controlled more effectively than other identified disorders. Introduction The auditing profession, more than any other, demands mental control and the application of critical thinking and skills to provide opinions on the financial performance of business owners. Consequently, it is natural for this profession to involve higher psychological pressure compared to other jobs in the financial field. As a result of these psychological pressures, auditors often face conflicts in their professional work, increasing the likelihood of job pressures spilling over into other aspects of their roles. In other words, the intense job pressures and the mismatch between an auditor’s personal characteristics and the professional demands of auditing can gradually lead to job burnout, ultimately disturbing the individual’s professional balance. Literature Review Since auditors, in the field of auditing, on the one hand, safeguard the public interests of stakeholders by validating financial reports, and on the other hand, operate within for-profit entities to earn revenue and provide services to business owners, they face substantial job pressure. Consequently, there is a concern among legislators and general stakeholders that these dual roles may conflict under such pressure. For instance, an employer with significant economic power might pressure an independent auditor to accept fraudulent or questionable accounting practices. Methodology This study is exploratory/descriptive in nature from an objective perspective. On one hand, interviews are employed to identify the functional areas of auditors' bricolage strategic thinking. On the other hand, checklists from the critical evaluation list serve as the foundation for identifying the types of disorders caused by the pressures of the auditing profession. This study is considered developmental in terms of result, as the interplay between auditors' bricolage strategic thinking and the overflow disorder of auditing profession pressures lacks theoretical coherence and an integrated content framework, necessitating content and cognitive analysis to expand the dimensions of this knowledge within the audit field. In terms of data type, this study is mixed-method. In the qualitative phase, the functional areas of auditors' bricolage strategic thinking are first identified through foundational data theory and interviews. Subsequently, during several stages of the systematic content screening process, the types of disorders caused by the overflow of auditing profession pressures are determined. Based on Delphi analysis, the reliability of the identified dimensions is verified, allowing the examined dimensions to be generalized to the study platform. In the quantitative phase, the gray Vicor matrix is employed to compare criteria in row "i" and column "j", identifying the most effective functional field of auditors from the perspective of bricolage strategic thinking. This is achieved by controlling the drivers of overflow disorders arising from the pressures of the auditing profession. Result In this study, during the qualitative phase and based on the answers to the first two research questions, an effort was made to identify the functional areas of auditors' bricolage strategic thinking and the disorders caused by the overflow of pressures in the auditing profession. This was achieved through grounded theory analyses and systematic content screening. Following this, action was taken to implement the fuzzy Delphi analysis process and verify the reliability of the identified dimensions, enabling their expansion to the study platform. The results of the qualitative phase, in line with the first and second research questions, indicate the identification of 36 conceptual themes, 6 core components, and 3 categories for the variable of auditors' bricolage strategic thinking functions. Additionally, 5 disorders caused by the overflow of auditing profession pressures were identified. Subsequently, with the aim of integrating these variables through the implementation of the gray Vicor analysis process, the study sought to answer the third research question: under which function of strengthening strategic thinking in auditors can the conflict caused by the overflow of auditing profession pressures be reduced? The results in this section showed that by improving the efficiency of auditors’ negotiation abilities through the development of bricolage strategic thinking, it can be expected that the conflict caused by tolerance with employers due to the overflow of auditing profession pressures will become more controllable compared to other identified disorders. Discussion In analyzing the obtained results, it should be noted that one of the functional fields of strategic thinking, based on the conceptual mechanism of bricolage, is the ability to design a negotiation path with business owners and conclude audit contracts. Through adherence to professional and ethical values, auditors can avoid potential pressures and prevent disruptions (conflicts) in their tolerance toward business owners. Given the wide range of pressures in the auditing profession, auditors often face desperation during negotiations with business owners. This can negatively affect the quality of audit reports and have destructive behavioral consequences, first on auditors’ performance in their professional roles and later extending to their family life. Conclusion This study highlights that strengthening bricolage strategic thinking in auditors can effectively manage work-family conflicts and, to some extent, control role ambiguity conflicts, family-work conflicts, and conflicts related to profession attachment. Negotiations conducted with consistent behavioral and professional capabilities, grounded in auditors' cognitive and perceptual approaches, create opportunities to mitigate professional pressures from the outset. This, in turn, enhances the effectiveness of auditors in their professional roles and broader social roles.

Abstract The purpose of this research is to investigate the moderating role of conservatism in the relationship between audit quality and earnings management. The current research is analytical and correlational. Furthermore, this study is considered quantitative based on the nature and characteristics of the data used to analyze the hypotheses. Data collection involved first using the library method, followed by statistics provided by the Tehran Stock Exchange Organization. The findings obtained from the regression model, based on a sample of 110 companies listed on the Tehran Stock Exchange over an 8-year period from 2015 to 2022, indicate that audit quality has an inverse and significant relationship with earnings management. Additionally, it was found that conservatism influences the relationship between audit quality and earnings management. The results concluded that conservatism reduces earnings management by recognizing losses promptly and delaying the recognition of profits. Since audit quality reduces information asymmetry, it limits profit manipulation through earnings management. In this context, conservatism plays a vital role in restricting managers' opportunistic reporting. Also, conservatism diminishes the company's incentives for earnings management, thereby reducing biases caused by managerial opportunism in accounting. Consequently, conservatism is expected to have a moderating role in the relationship between audit quality and earnings management, and the findings of this research confirm these expectations.
Introduction
The objective of this research is to investigate the moderating role of accounting conservatism in the relationship between audit quality and earnings management. In today's capital markets, earnings management has become a critical concern. It is a tool used by company management to influence earnings so that the numbers reach a predetermined target. This approach is employed for various reasons, one of which is earnings smoothing. As a result, instead of experiencing years of abnormally high or negative earnings, companies aim to maintain relatively stable results by employing innovative accounting tactics (Ismail et al., 2022). The main objective of financial statement auditing is to assure users that the financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). According to IFRS, financial reporting must provide truthful information, ensuring that financial statements accurately present the information they claim to provide. It is therefore logical that audit quality has an inverse relationship with the occurrence of earnings manipulation (Ismail et al., 2022). There is also substantial research suggesting that the level of accounting conservatism may reduce the practice of earnings management (Chen et al., 2007; Ball et al., 2000; Khan & Watts, 2009; Aminu & Hassan, 2018; Li et al., 2018). Chen et al. (2007) argued for the existence of a trade-off in conservative practice. Adopting the principle of conservatism may lead to more noise in accounting reports, potentially reducing the value of the stewardship role. On the other hand, this principle may decrease the practice of earnings management. However, Chen et al., (2007) asserted that under reasonable conditions, the reduction in earnings management is sufficient to compensate for the noise caused by excessive accounting conservatism. Legislators, standard setters, and academics have expressed concern that companies use conservative accounting coverage to manage earnings (AICPA, 1939; Devine, 1963; FASB, 1980; Levitt, 1998; Penman, 2001). A significant number of previous studies link the effects of earnings management to audit quality issues (Chowdhury & Eliwa, 2021). The importance of this research lies in its effort to fill the gap in understanding the moderating role of accounting conservatism in the relationship between audit quality and earnings management.

Methodology

Research Type: Based on its objective, this research falls under the category of applied research. Applied research uses the theories, principles, and techniques developed in basic research to address practical, real-world problems. In terms of methodology and nature, this research is a correlational study. Additionally, it is considered descriptive research, as the researcher does not intervene in the position, state, or role of the variables. The research method is inductive.
Data Collection: Data collection will be conducted in two stages. In the first stage, a literature review will be performed using library resources and specialized Persian and English texts to establish the theoretical and conceptual framework of the research. In the second stage, financial data for the research will be extracted from the financial statements of companies listed on the Tehran Stock Exchange.
Data Analysis: Eviews software will be used to analyze the collected data.
Population and Sample: The population of this study includes all companies listed on the Tehran Stock Exchange between 2015 and 2022 (eight years). After applying the necessary limitations, the sample size for this research will consist of 110 companies listed on the Tehran Stock Exchange, representing 880 company-years. It is important to note that only listed companies are included in the study.

Result

Hypothesis 1: To test the first hypothesis of the study, Model (1) was used. The results of the model estimation show that the coefficient of audit quality (0.3645) is significant at the 5% level, indicating a significant inverse relationship between audit quality and earnings management. Among the control variables, firm size, sales growth, and research and development expenses exhibit a positive and significant relationship with earnings management, while financial leverage shows a negative and significant relationship. Additionally, it was found that book value, operating expenses, and sales volatility do not have a significant relationship with earnings management. The variance inflation factor values confirm the absence of multicollinearity among the explanatory variables. The significance of the F-statistic (3674.6) at the 1% level demonstrates that the model is significant. The Durbin-Watson statistic (2.0803) indicates no autocorrelation problem in the model components. Furthermore, the coefficient of determination shows that the independent variable explains approximately 53% of the variation in total. Based on these results, the first hypothesis of the study is not rejected at the 5% confidence level.
Hypothesis 2: To test the second hypothesis of the study, Model (2) was used. The results show that the coefficient of the audit quality variable (0.6577) is significant at the 5% level, indicating a significant inverse relationship between audit quality and earnings management. The coefficient of the conservatism variable (0.7305), significant at the 10% level, reveals a significant inverse relationship between conservatism and earnings management. Finally, the combined coefficient of determination for audit quality and conservatism (0.5913) is significant at the 5% level, indicating that conservatism moderates the relationship between audit quality and earnings management. The variance inflation factor values confirm the absence of multicollinearity among the explanatory variables. The significance of the F-statistic (1893.6) at the 1% level demonstrates that the model is significant. The Durbin-Watson statistic (2.1972) indicates no autocorrelation problem in the model components. Furthermore, the coefficient of determination shows that the independent variable explains about 51% of the variation in total. Based on these results, the second hypothesis of the study is not rejected at the 5% confidence level.

Conclusion

The results of the test for the first hypothesis indicate a significant inverse relationship between audit quality and corporate earnings management. Low audit quality occurs when audited financial statements contain errors that the auditor has not identified or disclosed in their report. Therefore, audit quality can be associated with the quality of financial reporting, as higher audit quality ensures higher reporting quality. The presence of audit quality reduces in information asymmetry, which in turn decreases earnings manipulation through earnings management. These results are consistent with the research of Hanoun et al. (2010), Alzoubi (2017), Fatahi Nafchi, and Fazel Dehkordi (2018), and Khajavi and Maimand (2015). The results of the test of the second hypothesis show that conservatism has a moderating effect on the relationship between audit quality and earnings management. Audit quality reduces information asymmetry, which subsequently decreases earnings manipulation through earnings management. In this context, conservatism plays an important role in restricting opportunistic reporting by managers. Furthermore, conservatism reduces a company's motivation for earnings management, thereby mitigating the biases caused by opportunism in accounting.
 
 

Abstract Compliance with social and environmental responsibilities is one of the requirements of the current competitive era, and the competitive pressure on companies in this situation imposes costs that can affect financial performance. This research investigates the moderating role of competitive strength in the relationship between social and environmental responsibilities and financial performance. The statistical sample for this research consists of companies listed on the Tehran Stock Exchange between 2016 and 2021. Using a regular screening method, 108 companies were selected as samples. After checking the classical assumptions of regression, the panel data model with fixed effects was used. The results showed that social performance has a positive relationship with financial performance. Competitive strength has a negative moderating effect on the relationship between social performance and financial performance. Environmental performance also has a positive relationship with financial performance, and competitive strength has a negative moderating role in this relationship. According to the coefficients of the variables, the social dimension of the company is more effective in increasing performance than the environmental dimension. Introduction A balance must be established between the modernization process and social and environmental concerns. Additionally, society's expectations regarding moral, legal, economic, and public interests require companies to commit to the communities in which they operate (Porter & Kramer, 2011). On the other hand, the growing interest of companies, especially large, national, and multinational companies, to demonstrate better environmental and social performance as part of their corporate social responsibility policy is often reflected in their management structures and investment policies. In line with the social responsibility policy, companies invest in the environmental field for three reasons: complying with environmental and social regulations and standards, improving company conditions, creating a favorable image of the company for society, and gaining access to other markets (Zaid et al., 2020). Social responsibilities have been utilized in various businesses to achieve a competitive advantage and create stable relationships with society. In this regard, the theory of social responsibilities refers to the combined pursuit of economic progress, social equality, and environmental protection. The nature of social responsibilities is the interconnected and mutual realization of financial, social, and environmental goals (Donkor et al., 2023). A company's environmental responsibility refers to its organizational behavior and commitment to the natural environment, which symbolizes the company's environmental ethics (Dilla et al., 2019). Several studies have shown conflicting results regarding a firm's environmental performance and financial performance. Some previous studies have shown that environmental responsibility improves long-term performance (Arda et al., 2019; Gilal et al., 2019). In addition, green knowledge and innovation promote an environmental orientation that allows companies to improve performance (Atan et al., 2018). On the contrary, since introducing environmental initiatives is costly (Zhang et al., 2019), evidence has shown that corporate environmental responsibility does not always lead to positive results (Chollet & Sandwidi, 2018). Based on a sample of companies listed on the Tehran Stock Exchange, this study examines the role of competitive strength in the relationship between firms’ social and environmental performance and financial performance. Literature Review Green theory emphasizes that community care helps organizations in sustainable development. Hence, government regulations and customer pressure encourage companies to adopt such practices in emerging markets. Environmental responsibility allows companies to improve their competitive advantages and dynamic capabilities (Arda et al., 2019). Incorporating environmental values supports environmental business in the long term (Gill et al., 2019). In general, green knowledge and innovation promote an environmental orientation and green resource management in companies, subsequently allowing them to improve their performance (Atan et al., 2018; Zhang et al., 2019). Based on this, this research expects to improve the effectiveness of a company by using organizational resources for environmental performance while simultaneously improving social performance. Proponents of the positive effects of CSR argue that CSR enhances corporate value and image, as well as develops brand positioning, reputation, and corporate image, which in turn enhances financial performance in the long run (Hill, 2020). It is often assumed that the proper use of economic, social, and governance standards requires higher financial efficiency and performance. Managers of firms with fewer resources have fewer opportunities to divert resources to their advantage (Kumar et al., 2023). They are more concerned about their presence in the market and maintaining their market share in the industry, and they consider themselves less socially responsible towards the company, market, and society (Jiang et al., 2019). The moderating power of competition encourages companies to act in socially responsible ways and helps maintain their reputation (Chih et al., 2010; Graafland, 2018). The intensity of competition affects decisions related to social responsibilities, including social and environmental performance (Jiang et al., 2019). Different levels of competition affect the relationship between the social and environmental performance of companies. Social practices and environmental ethics are intangible assets for a company in capital markets, and these assets change with shifts in competition levels. In particular, considering the role of competitive strength, the relationship between social performance and environmental performance with financial performance changes as the level of competition fluctuates (Saeed et al., 2023). Therefore, the following hypotheses can be proposed: Hypothesis 1: There is a positive relationship between social performance and financial performance. Hypothesis 2: Competitive strength moderates the relationship between social performance and financial performance. Hypothesis 3: There is a positive relationship between environmental performance and financial performance. Hypothesis 4: Competitive strength moderates the relationship between environmental performance and financial performance. Methodology This research is practical and post-event, conducted using the secondary data collection method. The information from companies was collected by referring to the Codal.ir website and using their financial statements and attached notes. The study period covers 2016 to 2021. Before testing the proposed model and hypotheses, the assumptions of the regression models were checked. The Chow test, Hausman test, and variance heterogeneity test indicated that the panel data model with fixed effects is suitable for the models of this research. In this study, the Breusch-Pagan-Godfrey test was used to check for heteroscedasticity. The results of the heteroscedasticity analysis show that the residuals of the normal regression models do not have constant variance, indicating heteroscedasticity, and the generalized least squares method was used to address this issue. Results The variable coefficient of social performance in models 1 and 2 is 0.0092 and 0.019, respectively, and is significant at the 99% confidence level in both models. There is a positive relationship between social performance and financial performance, meaning that compliance with social responsibilities leads to an increase in financial performance. However, in model 2, the moderating variable (strength of competition) reverses the relationship between social performance and financial performance. At the 99% confidence level, the strength of competition has a negative effect on the relationship between social performance and financial performance. The variable coefficient of environmental performance in models 3 and 4 is 0.003 and 0.004, respectively, and is significant at the 95% confidence level. There is a positive relationship between environmental performance and financial performance, indicating that compliance with environmental responsibilities leads to an increase in financial performance. In model 4, the sign of the coefficient for the moderating variable (strength of competition) is positive, meaning that the strength of competition has a positive relationship with financial performance. However, the moderating variable reverses the relationship between environmental performance and financial performance, so at the 99% confidence level, the strength of competition has a negative effect on the relationship between environmental performance and financial performance. Conclusion Disclosure of social performance leads to increased financial performance. The disclosure of social performance by the company, as a positive signal to the market and shareholders, directly benefits the improvement of the company’s reputation and value. Additionally, this disclosure can indirectly affect the company’s financial performance through mediators such as competitive advantage, reputation, customer satisfaction, access to capital, and environmental resource efficiency. The company's competitive advantages are one of the important dimensions of market characteristics that company leaders should consider in their efforts to make optimal decisions to maximize financial performance. When there are no competitive pressures, managers may become lax in their duties, leading to poor management and high agency costs. Disclosure of environmental performance also leads to increased financial performance. Compliance with environmental responsibilities and publication of periodic reports raise awareness and judgment among society and stakeholders, thereby strengthening the company's brand. To ensure that environmental goals are met, environmental functions such as the development of environmental policies and programs, setting quantitative and measurable goals for reducing environmental pollution, implementing pollution prevention obligations, measuring and evaluating potential environmental effects, revising executive plans, and making reforms must be carried out. Competitive strength has a negative moderating role in the relationship between environmental responsibilities and financial performance. Today, governments support and encourage companies to fulfill social and environmental responsibilities. On the other hand, when facing external pressures, companies rely on government support and try to attract technical and financial incentives to carry out social and environmental responsibilities at a lower cost and more easily. By actively implementing social and environmental responsibilities, companies can communicate with governing bodies and actively participate in the development and approval of environmental responsibility programs. These actions help companies gain external legitimacy and promote their corporate brand. In this way, by taking advantage of these factors, companies can increase profitability while raising product prices and consolidating customer loyalty. Additionally, emphasizing the reduction of physical waste through environmentally friendly solutions can lay the groundwork for reducing costs and increasing profitability.    

Abstract The purpose of this research is presenting a pathological framework of teamwork in auditing by matrix ranking process. The aim of this study is to present a pathological framework of teamwork in auditing using a matrix ranking process. This study employs a mixed-methods and exploratory approach due to the lack of identification of vulnerable areas of teamism in the auditing profession. The grounded theory method was applied to determine the dimensions of the model through fuzzy Delphi analysis. There is a content similarity between the components representing the central field of damage of teamism in the auditing profession and the identified categories. Using the interpretive ranking process, an attempt was made to prioritize the identified axes. The results of this study, based on 12 interviews in the qualitative phase and the model presentation, indicate the existence of 3 categories, 8 components, and 42 conceptual themes. In the second phase of the research, it was also determined that individual perception disorder is the most significant issue that the audit teams face in the process of sharing information and focusing on collaborative methods. This issue can seriously challenge the performance of audit teams. Introduction In organizational structures, one of the most important processes for fostering participation and information sharing is developing team orientation to achieve effectiveness. In other words, participation and the creation of synergy are considered key outcomes of team orientation, through which any organization can improve competitive results. However, it is important to note that some professions benefit more from team orientation because the specific characteristics of certain jobs, particularly those involving the sharing of knowledge and experience, can yield greater advantages. Auditing is one of such profession that relies on team orientation due to the specialized knowledge and experience required. Auditing teams are structured according to certain norms designed to improve knowledge sharing and learning. Literature Review At the onset of interpersonal communication, the concept of a group was viewed as a collaborative function. This was believed to yield more long-term results compared to individual decision-making, as joint efforts between individuals were thought to provide better solutions to the organization’s challenges. However, with the development of behavioral research in the functional fields of the group, it became evident that, like previous theories, the group offered only proportional efficiency for the organization and did not significantly differ from individual decision-making in terms of effectiveness. In fact, issues within the group, such as power dynamics, fear, and frustration among members, particularly among minority stakeholders, often cause more disruptions in solving organizational problems and could impose significant costs on the organization. Methodology The research approach of the present study, in terms of data collection logic, is hybrid in nature. This is because it examines a phenomenon for which no comprehensive framework exists in the theoretical literature of the auditing profession, nor is there a consensus. Therefore, the study begins by analyzing the qualitative data and relying on the data theory method of the foundation, aiming to identify the dimensions of the damages of the audit teams through a multidimensional model. For this purpose, Glaser's (1992) emergent approach is employed to formulate the audit teams' vulnerability framework, utilizing expert interviews conducted in three stages of coding. Result Based on the arguments presented in the methodology regarding the lack of a theoretical framework for team orientation vulnerability in the auditing profession, the foundation data theory analysis process, following Glazer's approach, was used as the basis for the qualitative section. In this analysis, a total of 315 open codes were generated from interviews with 12 identified accounting experts. Through a three-stage coding process, 8 components and 4 main categories were identified. To ensure the reliability of the identified dimensions, Fuzzy Delphi analysis was employed. The findings from this analysis confirm all the core areas of the damage of team orientation within the audit profession. Subsequently, to address the research question of determining the most significant central field of damage of team orientation within the auditing profession, the interpretive ranking process was utilized. Discussion In analyzing the obtained results, it can be stated that auditors, as members of the audit team, can effectively contribute to improving audit quality when each auditor can individually play a meaningful role in collaboration, due to their level of perceptual knowledge, which stems from behavioral and psychological characteristics, and their ability to share information. Conclusion The results indicate that auditors, as members of the audit team, can effectively contribute to improving audit quality when each auditor can individually play an active role in collaboration, due to their level of perceptual knowledge, which stems from behavioral and psychological characteristics.  

Abstract Considering the goals of forming the audit committee and its extensive duties, evaluating the performance of the audit committee in order to identify its strengths and weaknesses is very important. The present study presents a model for evaluating the performance of the audit committee and a practical model for the use of the activities of the audit committee by the beneficiaries. The model obtained in the current research includes 3 parts of evaluating the individual characteristics of the members of the audit committee, evaluating the work processes and reporting of the audit committee, and evaluating its duties and responsibilities, and the final model includes 3 dimensions, 13 components, and 78 indicators. The results of the research showed that the working and reporting processes of the audit committee have the most weight in evaluating the performance of the audit committee, and the evaluation of the audit committee meetings as the focus of the audit committee's activities is the most important among the performance evaluation components.

Objective

The optimal performance of the audit committee is an important variable in improving the processes and structure of corporate governance as well as financial reports. The duties of audit committees around the world are in sync with developments in the economic environment, and in Iran, according to the approved charter of the audit committee, the purpose of forming an audit committee in companies is to help fulfill the supervisory responsibility of the board of directors and to improve it in order to obtain assurance of reasonable quality of financial reporting, effectiveness of the internal audit process, ensuring the independence of the independent auditor and its effectiveness, adapting the company's activities to the laws, and ensuring the effectiveness of the activities of the corporate governance system, its committees, and other components. Considering the goals of forming the audit committee and its extensive duties, evaluating the performance of the audit committee in order to identify its strengths and weaknesses is very important. Due to the lack of comprehensive research in the country to provide a model to evaluate the performance of the audit committee, the present research has addressed this issue and a practical model for the use of the activities of the audit committee has been presented.

Method

The research method used in the first stage of the study involved extracting the dimensions, components, and performance evaluation indicators of the audit committee from the theoretical sources of the research. Then, the Fuzzy Delphi method was used to screen the indicators, and the Best-Worst Method (BWM) multi-criteria decision-making method was used to weigh each dimension, component, and index. Finally, to determine the gap between the existing situation in the field of audit committee performance evaluation and the model obtained in the current research, the Fuzzy Gap method has been used.

Findings

By studying the theoretical sources of the research, 96 indicators were determined to evaluate the performance of the audit committee, which were classified into 3 dimensions and 15 components using theoretical foundations. In the next step, to check the indicators, interviews were first conducted with 10 experts. In the interviews conducted regarding 6 indicators, revisions, and content adjustments were made to adapt to the current conditions of the country's economic environment. One index was also removed due to the lack of a legal structure for the index in Iran. In the next step, 95 finalized indicators were presented to the research experts for screening, and the responses given by the research experts were analyzed using the Fuzzy Delphi method. By calculating the fuzzy average of the numbers and then de-fuzzifying them, indicators with a de-fuzzified number less than 0.7 were removed, and 78 indicators were approved by the research experts. The model obtained in the current research includes three parts: evaluating the individual characteristics of the members of the audit committee, evaluating the work processes and reporting of the audit committee, and evaluating its duties and responsibilities. The final model includes 3 dimensions, 13 components, and 78 indicators.
­4- Conclusion
According to the findings of the research, the important components in evaluating the performance of the audit committee are the audit committee meetings, the audit committee resources, communication with the board of directors, the audit committee charter, and monitoring of financial reporting. The results of the research showed that the working and reporting processes of the audit committee carry the most weight in the evaluation of the audit committee's performance, with a weight of about 66%, and the evaluation of the audit committee meetings as the focus of the audit committee's activities is the most important among the evaluation components. Also, proper communication with the board of directors, provision of sufficient resources for the activities of the audit committee, the existence of an approved charter of the audit committee, and monitoring of internal controls and financial reporting are important areas for evaluating the performance of the audit committee. The results of the research also indicated the existence of a significant gap between the current status of the audit committee's performance evaluation and the model obtained in the research. In this regard, it is suggested that the legislator (Securities and Exchange Organization) obliges the listed companies to evaluate the performance of the audit committee under their supervision. Furthermore, it is recommended to use the model presented in the current research, considering the importance of dimensions and components. Additionally, the board of directors of the companies can improve the performance of these committees by taking into account the important components of the audit committee's performance, by holding the audit committees under their supervision accountable in these areas, and also making a reasonable and logical assessment of their performance.
Enhancing Knowledge
This research has presented a practical model to evaluate the performance of the audit committee according to the characteristics of Iran's economic environment, which can serve as the basis for analyzing the performance of the audit committee based on its different functional dimensions.

Abstract The purpose of this study is to examine the relationship between financial expertise and the experience of the audit committee chairman with auditor selection, audit fees, and audit quality. To achieve the research goal, a sample equal to 99 companies listed on the Tehran Stock Exchange during the period from 2015 to 2023, equivalent to 792 company-years, was analyzed using multiple regression analysis based on combined data. The findings showed that the companies whose heads of the audit committee possess financial expertise are more likely to choose the Audit Organization or audit institutions with quality control ‘A’ as their independent auditors. Also, according to the findings, the financial expertise of audit committee heads leads to an increase in audit fees and audit quality. However, this study did not identify a significant relationship between the audit committee chairman's experience with auditor selection and audit fees, but a positive and significant relationship between the audit committee chairman's experience and audit quality was identified. The findings of this study contribute to the literature by documenting that financial expertise and experience of audit committee heads are important for improving the audit process and audit quality.
­1. Introduction
In recent years, the significant impact of the audit committee on the effectiveness of the audit process has been confirmed by various researchers (Azizkhani et al., 2023). The chairman of the audit committee is considered the chief executive officer of the audit committee (Ernst & Young, 2013). It is necessary for the chairman of the audit committee, as a leader, to understand the culture of the organization, set clear expectations for the committee members, and consider both management and auditors in their decisions. The chairman of the audit committee, who is more responsible than other members of the committee, plays a vital role in controlling financial reporting and evaluating the effectiveness of the audit committee (Bromilo & Keeler, 2011). The chairman of the audit committee plays a key role in ensuring the quality of financial reports through cooperation with the members of the audit committee, setting the agenda of the committee, communicating with the board of directors, management, and independent auditors, and helping to select the members of the audit committee (Azizkhani et al., 2023). In Iran, the audit committee is one of the basic committees of a company. In 2013, the Securities and Exchange Organization required all listed companies to form an audit committee. This committee is responsible for supervising the work of internal and independent auditors, proposing independent auditors to the general meeting of shareholders for the purpose of appointing, determining the fees, and dismissing independent auditors, reviewing the frequency of audits, receiving audit reports, and ensuring that corrective actions are taken in a timely and correct manner. It is the responsibility of management to address weaknesses and shortcomings, non-compliance with policies, laws, and regulations, and resolve other problems identified by the auditors (Nazari et al., 2019).

Methodology

The present research is a descriptive, correlational study in terms of its applied purpose and the relationship between variables. The data and information used are historical and post-event. The statistical population of this research includes all the companies listed on the Tehran Stock Exchange. The statistical sample of the research comprises all the companies that were active in the stock market from the beginning of 2015 to the end of 2023 and meet the following conditions: 1. Their membership in the Tehran Stock Exchange must have continued throughout the research period. 2. The data needed for the research must have been available to them during the research period. 3. They must not belong to investment, financial mediation, holding, bank, or leasing companies. 4. The end of the financial year for these companies should not have changed during the research period and must coincide with the end of March. Finally, after applying the above conditions, 99 companies (equivalent to 792 company-years) were selected as the statistical sample. To collect the data, the database of Rahavard Novin and the reports published on Codal were used. Research hypotheses were tested based on combined data and using multivariate regression models.

Result

In this study, the effect of financial expertise and the experience of the head of the audit committee on auditor selection, audit fees, and audit quality was investigated. The findings indicate that the heads of the audit committee who possess accounting and financial expertise are more likely to choose a first-rate auditor (The Audit Organization or audit institutions with a quality rating of ‘A’) as an independent auditor. Additionally, audit committee heads with accounting and financial expertise tend to pay higher audit fees and enhance audit quality. These findings are consistent with the results of studies by Azizkhani et al. (2023), Lari Dasht Beyaz et al. (2017), and Ghafaran and Yasman (2018). Therefore, the accounting and financial expertise of the head of the audit committee, as an important and influential factor in the audit process, should receive attention from supervisory and legislative institutions. Due to its significance, it should become a legal requirement for companies listed on the Tehran Stock Exchange.

Conclusion

Although the accounting and financial expertise of the head of the audit committee was identified as an influencing factor in the selection of the auditor and the audit fee, the results of this study showed that the greater experience of the heads of the audit committee does not lead to the selection of a first-class independent auditor and does not significantly affect the audit fee. This finding is not compatible with the results of the studies by Elsayani et al. (2023) and Lari Dasht Beyaz et al. (2017). However, the findings indicate that the greater experience of the heads of the audit committee increases the quality of the audit, which is consistent with the findings of the study by Azizkhani et al (2023). These results indicate that the accounting and financial expertise of the head of the audit committee, as an internationally proven factor, demonstrates the expected performance in companies listed on the Tehran Stock Exchange. However, the experience of the head of the audit committee is not as effective as accounting and financial expertise. In this regard, it may be possible to attribute the weak role of audit committee heads in the selection of auditors and audit fees in our country as a reason for this lack of influence. It is expected that with the passage of time and future legal and regulatory reforms, audit committees will become more efficient and effective, and their heads will play a greater role in improving the audit process.

Abstract The implementation of the engagement quality control review (EQCR) by the engagement quality control reviewer has been considered as one of the key elements of quality control in the auditing standards and its implementation is required in the audit of companies listed on the stock exchange. In this research, the data were collected through (1) conducting interviews with 25 partners of Iranian auditing firms in the spring and summer of 2023 and (2) the opinions of 12 certified accountants that were published in a newspaper or professional journals in the form of a conversation, round table, notes or articles. Then, by applying the grounded theory, the components that are the obstacles to the effective application of EQCR are identified and presented in the form of a conceptual system model. The validity of the research model was confirmed by 7 audit partners. The findings from the analysis of research data show that there are various obstacles in its different dimensions, the most important of which are: the structure and organization of some audit firm, the small size of many audit firms, economic considerations, low fees of Iranian audit firms, lack of qualified auditors, moral issues in the society, the society's specific problems, governing laws and regulations, weaknesses in quality grading of audit firms, inadequate communication with international professional communities, low awareness of auditing and lack of development, and low application of technology in Iranian audit firms. Considering that the international auditing standard 220 has been updated and includes more requirements for the EQCR, along with the findings of this research showing that the quality control standard is not effectively implemented by Iranian audit firms, some suggestions are given to fill these gaps.

Introduction

The objective of a firm is to design, implement, and operate a system of quality control for audit, review of financial statements, or other assurance or related services engagements performed by a firm, that provides the firm with reasonable assurance that: (a) The firm and its personnel fulfill their responsibilities in accordance with professional standards and applicable legal and regulatory requirements, and conduct engagements in accordance with such standards and requirements; and (b) Engagement reports issued by the firm or engagement partners are appropriate in the circumstances. According to the auditing standards, engagement quality review is an objective evaluation of the significant judgments made by the engagement team and the conclusions reached thereon, performed by the engagement quality reviewer and completed on or before the date of the engagement report. Engagement quality reviewer is a partner, other individual in the firm, or an external individual, appointed by the firm to perform the engagement quality review (IAASB, 2020). Surveys show that engagement quality control review, as one of the key elements of quality control, has not been established in Iranian audit firms. Its causes have not been clarified in previous research. Therefore, in this research, we seek to clarify its causes and obstacles.
Research Question(s)
What are the obstacles of applying engagement quality control review in Iranian audit firms?

Literature Review

Engagement quality control review is one of the key elements of the quality control system of auditing firms, which is considered in the auditing standards. The literature review shows that this issue has not been studied in Iran. However, some Iranian certified public accountants and audit firm partners have pointed out some obstacles of implementing quality control reviews in the form of notes and roundtables published in professional journals. The Public Company Accounting Oversight Board has described the key issues of quality control review in the United States in 2023 in a report entitled " SPOTLIGHT: Inspection Observations Related to Engagement Quality Reviews". This report shows that there are still many concerns about the quality control review (PCAOB, 2023).

Methodology

Considering the nature of the research problem, which is subjective and relies on the experience of audit institution partners, the application of a qualitative research approach is deemed appropriate. Additionally, since no specific theory has elucidated this phenomenon and there has been no prior research in this area, the use of grounded theory is fitting. Conducting interviews is one of the main methods of data collection in grounded theory (Strauss & Corbin,1990). Therefore, research data have been collected through interviews. Interviews were conducted with 25 partners of audit firms in the spring and summer of 2023. It is noteworthy that in grounded theory, all information is considered as data (Danai Fred et al., 2013). Hence, discussions, roundtables or articles published by 12 Iranian certified public accountants in professional journals or newspapers were also used as data. In the qualitative method of research, unlike the quantitative approach, statistical sampling is not important and sampling is judgmental. That is, people who have the most experience and involvement with the studied phenomenon are selected. Interviews with participants continue until theoretical saturation is reached, meaning that new participants do not introduce new insights beyond what has already been discussed.The interviews are then transcribed, and conceptual tags are attached to each sentence or paragraph of the text. In grounded theory, data analysis is done in three stages: open coding, axial coding, and selective coding. In this research, three methods were used to analyze the data.

Results

After conducting the research and data analysis, it is found that there are various obstacles in various dimensions for the application of quality control in Iranian audit firms. These obstacles were extracted in the form of conceptual tags. Based on selective coding, they were classified into different categories. To provide a comprehensible presentation of the barriers, these conceptual labels were categorized and presented in the form of inputs, processes, outputs, consequences, and contextual factors. Presenting these conceptual labels of obstacles in different dimensions helps us to have an accurate picture of the causes and obstacles so that we can adopt strategies to solve them. Some of the most important obstacles are: the structure and organization of some audit firms, the small size of many audit firms, economic considerations, low fees of Iranian audit firms, lack of qualified auditors, moral issues in the society, the society's specific problems, governing laws and regulations, weaknesses in quality grading of audit firms, inadequate communication with international professional communities, low awareness of auditing, and lack of development, and low application of technology in Iranian audit firms.

Discussion

In this research, after analyzing the data, many obstacles are extracted in various dimensions. These factors limit the effective implementation of engagement quality control review as one of the key elements of the audit quality control system. With these conditions, achieving audit quality becomes challenging.

Conclusion

In this research, the obstacles to the application of quality control review in Iranian audit firms were examined. The findings show that there are many obstacles in different dimensions. The structure and organization of some audit firm, the small size of many audit firms, economic considerations, low fees of Iranian audit firms, lack of qualified auditors, moral issues in the society, the society's specific problems, governing laws and regulations, weaknesses in quality grading of audit firms, inadequate communication with international professional communities, low awareness of auditing and lack of development, and low application of technology in Iranian audit firms are the main obstacles to the application of engagement quality control review in Iranian audit firms. If these obstacles are not removed, the audit quality of Iranian audit firms will be affected. Additionally, in the present circumstances, it cannot be assured that professional standards will be fully followed. This research is the first Iranian research that has studied this issue and can be an avenue for future research. Future research could study other stakeholders or rank these obstacles. Furthermore, conducting similar research in the future will clarify the extent to which these obstacles can be overcome. The findings of this research can provide a clear perspective on engagement quality control review in Iranian audit firms and its obstacles to regulators, such as the Iranian Association of Certified Public Accountants (IACPA). One suggestion arising from the findings could be to increase the weight of the scores related to the engagement quality control review. Another suggestion would be to promote and clarify the benefits of engagement quality control review for audit firms. The last suggestion is the training of competent quality control reviewers by the AICPA or other educational and professional centers.
Acknowledgments
We acknowledge the participants in this research who helped us.
 

Abstract In this research, the relationship between the discovery of audit distortions and the readability of financial reports has been investigated, as well as the moderating effect of management ability on this relationship. This research is practical in terms of its purpose, and the correlation method is causal (post-event). In this research, the data of 129 companies listed on the Iran Stock Exchange during a seven-year period (from 2015 to 2021) were gathered to test the hypotheses using panel data. The collection of information in this study was done using library methods. Related data to measure the variables were collected from the Codal website and financial statements of the companies. Basic calculations were done in Excel. Then, Stata software was used to test the research hypotheses. The results of the research show that the discovery of audit distortions has a direct and significant effect on the readability of financial reports. Additionally, the results indicate that the ability of managers can not only moderate the positive relationship between the discovery of audit distortions and the readability of financial reports, but also increase the intensity of this relationship.

Introduction

A significant part of the companies' information is presented through the annual reports. A clear presentation of this amount of information is important for the clear understanding and interpretation of the information in the financial statements. There is a possibility that company managers change the readability of financial reports in order to attract the attention of investors, and control the perceptions of information users. The possibility of managers exploiting loopholes in accepted accounting principles and standards for personal gain necessitates a thorough evaluation and review by auditors. This evaluation aims to identify potential opportunities for fraud and weaknesses in these principles and standards for rectification. In this way, auditors can play an important role in making financial reports more readable through the quality of the audit. At the same time, the motivation and ability of managers to apply personal interests can also be an obstacle to high-quality auditing. Therefore, the purpose of this research is to examine the effect of audit quality on the readability of financial reports and to investigate how managers' ability can influence this relationship.
Research Question(s):
Does audit quality have a significant effect on the readability of financial reports?
Can managers' ability moderate the relationship between audit quality and readability of financial reports?

Literature Review

Blanco et al. (2021) stated in their research that when annual reports are less readable, auditors spend more effort on auditing financial statements. Furthermore, Hassan (2017) indicated that companies with capable managers publish more readable financial reports. Ghanizadeh et al. (2021) also concluded that financial knowledge and ability of managers have a positive and significant effect on audit quality.

Methodology

The data needed for the research were collected through Rahvard Navin software and Codal website, as well as from the audited financial statements of the companies and their audit reports. The statistical population of the research consists of the companies listed on the Iran Stock Exchange. Thus, 129 companies were selected from the statistical population over seven years (903 observations) from those active between 2015 and 2021, after applying restrictions.

Results

The findings of the research show that the increase in sensitivity of the auditors in their proceedings, which has led to the discovery of more and more accounting distortions and finally the improvement of audit quality, has led to effective communication with managers in choosing simple words and phrases. This results in an increase in the use of simple language and a reduction in the complexity of financial report content, thereby enhancing the readability of financial reports. Additionally, the ability of managers can not only moderate the positive relationship between audit quality and the readability of financial reports, but also increase the intensity of this relationship.

Discussion

The readability of managers' explanatory reports is crucial for influencing information users. However, the absence of a universal standard for reading such reports presents management with numerous choices regarding content and even formatting. It is possible for managers to mislead the users of information when choosing the right decision by manipulating the readability of financial reports. This issue underscores the essential role of auditors, given its financial consequences and the potential for economic crises. Auditors play a crucial role in enhancing the quality of financial reports and mitigating opportunistic motives of managers. As the CEO is a key figure in the company's economy with significant influence, they can impact the company's value and profitability through their presentation of news and reports. Therefore, audit quality as one of the most important factors in the implementation of audit operations in audit institutions should be considered, so that the mission of auditing, which is ensuring financial statements, is carried out at the highest level of confidence. However, in situations where managers possess high abilities, there is a possibility of adjusting and being affected by this relationship. In this situation, there is a contradiction regarding the managers' ability to provide clear or complex reports and the quality of the audit. This issue originated from theories such as representation and stakeholders. Therefore, the moderating effect of managers' ability on the relationship between audit quality and readability of financial reports is important. In other words, capable managers in different situations send a positive sign of the company's status to the market by providing clear information and thus reduce agency costs. Thus, these managers have a greater ability to clearly express information to the market, which helps create a competitive advantage, maintain reputation, and foster self-motivation.

Conclusion

In general, the results of this research indicate that the quality of auditing has improved, and the ability of managers plays a crucial role in enhancing the quality and transparency of financial reports. Therefore, it can be said that audit quality is an important and influential variable in ensuring financial statements and gaining the trust of information users. Additionally, capable managers demonstrate a greater inclination towards information transparency due to their superior performance.

Abstract In this study, by using the Fuzzy Delphi research methodology and getting the expert opinions, it was tried to identify indicators for improving audit quality approved by experts in order to design a suitable model for the Economy of IRAN by utilizing a confirmatory factor analysis model. Also in this research, the gap between current and desired situation of audit quality indicators in IRAN is investigated. Finally, the dimensions of audit quality are ranked in terms of importance. For this purpose, following the International Auditing and Assurance Standards Board, 60 indicators were identified. These indicators were classified in five dimensions: a. Input factors with 21 indicators; B. Process factors with 10 indicators; C. Output factors with 9 indicators; D. Key interactions with 10 indicators; and E. Contextual factors by 10 indicators. Data were analyzed by utilizing R, Amos and Super Decisions software. The findings indicate that 54 indicators have been adopted, which provide a model for improving the Audit Quality. Also the results of comparing the current and desired situation of audit quality improvement indicators shows a significant difference between the current situation of the audit quality and the desired environment in Iran. Finally, the results of ranking the dimensions affecting the improvement of audit quality Shows that process factors are in the first place of importance from the point of view of experts, input factors are in the second place, main interactions and contextual factors are both in the third place and output factors are in the fourth place.
 
 
 

Introduction

The accuracy of the operation of each component of the financial reporting supply chain leads to higher-quality financial reporting. One of the most important components of this chain is external audits that, by considering the public interests, assure that the financial information presented in financial reports is fair and reliable (IAASB, 2011; Royaei et al., 2015; Imani Barandagh, Mehrani and Hojjat Shamami, 2016). Therefore, the international auditing and assurance standards board (IAASB), using a holistic approach, published a framework for audit quality in which the main factors contributing to audit quality are introduced. Researchers in different countries, including Iran, are expected to pay attention to the indicators suggested by the IAASB and adjust these indicators according to the context in which audit firms operate to help those involved in the financial reporting supply chain, especially auditors, to improve audit quality.
Thus, conducting a study aimed at developing a model for audit quality improvement in Iran, considering the indicators suggested by the IAASB to improve audit quality and enhance the position of the auditing profession in Iran.
Research Question(s)
The present study can answer this question: What is the audit quality improvement model in Iran?

Literature Review

2.1. Audit quality definition:
There is still no comprehensive, worldwide, and consensual definition, and thus, audit quality can be introduced as a complex and multidimensional concept (Mashayekhi et al., 2013; Alavi and Vakili Fard, 2021) that cannot be limited to a simple definition and the opinions of all those involved in the financial reporting supply chain should be taken into account (Bonner, 2008; Knechel et al., 2012; IAASB, 2014; Mohammadrezaei et al., 2019).
2.2. Efforts to improve audit quality:
Financial crises in recent decades have called into question the auditing profession and audit quality. Therefore, Policymakers have made attempts to identify key indicators of audit quality. As a more considerable step, in 2014, the IAASB developed a framework for audit quality in which the main factors contributing to audit quality were introduced. The IAASB has introduced the main factors contributing to audit quality in this framework and believes that following the framework in the economic environment of each country can lead to high-quality audits and improve the position of the auditing profession in society.

Methodology

The present study is applied research in terms of purpose and descriptive survey in terms of the data collection method. The purpose of this study is to identify the indicators of audit quality improvement in Iran and develop a model for audit quality improvement. To this end, the fuzzy Delphi method and the confirmatory factor analysis (CFA) technique are employed.
3.1. Statistical population and sampling method
The statistical population of this study comprises audit experts (the partners and senior managers of audit firms that are a member of the IACPA and Iran audit organization). The expert panel members were selected using the purposive sampling technique and 80 questionnaires were distributed among the audit experts, and finally, 58 questionnaires were collected to analyze the data.

Results

4.1. The importance level of the research indicators based on experts’ opinions (the results obtained from the fuzzy Delphi method)
According to the obtained results, no indicator is removed, and all the indicators play a role in improving audit quality in Iran and are confirmed by experts.
 
4.2. Audit quality improvement model
In the next step, the CFA technique was used to extract the research final model. To this end, first, the first-order one-factor CFA model related to audit quality improvement was fitted, and after removing items with factor loadings less than 0.5, 54 indicators remained. The final research model, which is a model for improving audit quality in the economic environment of Iran, was formed as described in Figure 2.
 

Discussion and Conclusion

This study, using the fuzzy Delphi method and obtaining the opinions of 58 experts, seeks to identify audit quality improvement indicators and design a model suitable for the economic environment of Iran. To this end, based on the theoretical framework, 60 indicators were collected and categorized into five dimensions: a) input factors with 21 indicators, b) process factors with 10 indicators, c) output factors with 9 indicators, d) key interactions within the financial reporting supply chain with 10 indicators, and e) contextual factors with 10 indicators. The results show that 54 out of 60 indicators in five separate dimensions are accepted, which represent the model for audit quality improvement in the economic environment of Iran according to experts’ opinions as described in the aforementioned model (Figure 2).

Abstract The aim of this study is to develop a comprehensive model that identifies the non-fragile variables affecting the quality of tax audit. We analyzed 511 tax files from Mazandaran province in the period spanning 2012 and 2021. Initially, through interviews with experts and literature, 64 factors affecting the quality of tax audits were identified. These factors were categorized into three groups: characteristics of taxpayers, tax auditors, and macro factors. Subsequently, the relevant data were applied to Bayesian Model Averaging (BMA), Time-Varying Parameter Dynamic Model Averaging (TVP- DMA), and the Time-Varying Parameter Dynamic Model Selection (TVP-DMS) models. Among these, the BMA model demonstrated the highest accuracy based on the error rate. After model estimation, 17 main indicators were identified as influential variables in three areas. In the realm of tax auditors, these included the quality of past period tax audits, work experience, individual or group handling of audits, auditor expertise, auditors’ use of information, auditor’s workload, conducting audits across multiple tax sources, interactions with related parties, the presence of unofficial invoices, and the use of others’ business cards. In terms of intra-company variables, accrued earning management and debt ratio were identified. Finally, macroeconomic variables impacting the quality of tax audits were found to be inflation, unofficial exchange rates, tax complexity, tax fairness, the business environment index, and the social capital index.
 

Introduction

Factors affecting the quality of tax auditors can be divided into three groups: characteristics of taxpayers, tax auditors, and macro factors. The current challenge in evaluating factors that determine the quality of tax auditors lies in the diversity of theories and the absence of a specific, universally accepted model. On one hand, the multitude of potential explanatory variables affects the quality of tax auditors. On the other hand, this abundance makes the use of classical econometric models problematic. One method to address the uncertainty in selecting variables and choosing the appropriate model is to employ conventional techniques in Bayesian econometrics. These include Bayesian Model Averaging (BMA), Bayesian Maximum Likelihood Averaging Model (BML), Time-Varying Parameter Dynamic Model Averaging (TVP-DMA), and Time-Varying Parameter Dynamic Model Selection (TVP-DMS). Little research has been conducted in the field of tax audit quality. Furthermore, to date, there has been no research that attempts to model this index using non-linear Bayesian approaches and time-varying parameters simultaneously; such an approach has not yet been adopted.

Literature Review

The lack of tax revenue and non-payment of taxes pose significant challenges to the development of countries. In recent years, the tax gap has widened in both developing and developed countries. The tax gap is defined as the difference between the taxes that are legally owed and the amount of tax actually collected. Non-compliance with tax laws by both taxpayers and tax officials is a fundamental issue in emerging and developing economies. Tax audit is one of the methods employed to achieve the necessary compliance with tax laws (Aia et al., 2016). Combating tax evasion is a fundamental objective of all global tax systems, for which there are generally two basic strategies. One strategy is the establishment and enhancement of reliable self-assessment systems, and the second is the implementation of risk-based tax audits (Dehghani Doyle, 2019). Therefore, the primary objective of this study is to develop a model aimed at enhancing the quality of tax audits.
 

Methodology

The research focuses on the tax files of all taxpayers, both individuals and legal entities, which have been audited by the Mazandaran province tax organization between 2010 and 2021. The sample comprises information extracted from tax files of taxpayers with files valued at 10 billion Rials and above. This threshold of 10 billion Rials was set to exclude small taxpayers, who generally do not have a substantial information burden, thus focusing on a more specific level of taxpayers. Following interviews with experts from the tax organization and university professors, and a review of past research, a total of 64 factors influencing the quality of tax audits were identified. These factors were categorized into three main groups: macro variables, characteristics of taxpayers, and characteristics of tax auditors. BMA approach has been used in this research.

Results

From the viewpoint of tax audit service providers, establishing strategies to enhance the quality of tax audits is essential. This includes creating and reinforcing facilities systematically, conducting joint and integrated audits, and defining mechanisms to ensure auditors' independence. To effectively implement these strategies, it is crucial to consider the various dimensions of factors that affect the quality of tax audits. To achieve this objective, information on the indicators of the 64 factors affecting the quality of tax audits was input into three models: BMA, TVP-DMA and TVP-DMS. Based on the error rate, the BMA model demonstrated the highest level of accuracy. Following the model estimation, 17 main variables were identified. These variables include: the quality of tax audit of the past period, job experience, whether the case should be handled individually or as a group, auditor expertise, the extent of auditors’ use of received information, auditor’s work pressure, transactions with related parties, the presence of unofficial invoices, using other people’s business cards, accrued profit management, debt ratio, inflation, unofficial exchange rate, tax complexity, tax fairness, business climate index, and social capital index.
Based on the results of the research, the following suggestions are proposed:

Mechanization of all tax audit processes.
Establishing an integrated system of a smart database of circulars, instructions, and regulations.
Implementing measures and efforts to provide all tax auditors with access to the financial and economic microdata of taxpayers.
Development and implementation of integrated tax audit software across all sources.
Emphasizing the quality and substance of the content in issued tax audit reports.


Discussion

The identified variables are divided into three main categories: tax auditor variables (the quality of tax audit of the past period, job experience, whether the case should be handled individually or as a group, auditor expertise, the extent of auditors’ use of received information, auditor’s work pressure, transactions with related parties, the presence of unofficial invoices, using other people’s business cards), Internal variables (accrued profit management; debt ratio), and macroeconomic variables (inflation, unofficial exchange rate, tax complexity, tax fairness, business climate index and social capital index).

Conclusion

Given the scarcity of comprehensive research in the field of tax audit quality, a multifaceted model has been designed to address this gap. It provides a comprehensive perspective on the quality of tax audit. Focusing on all dimensions of tax audit quality fosters the development of a systemic perspective in this field. Expanding the systemic perspective is expected to enhance the efficiency of the tax audit system. This improvement in efficiency can lead to more effective tax collection across different economic sectors, ultimately contributing to broader economic development.
 

Abstract This study aims to conduct a literature review on internal audit quality literature using bibliometrics methods, including time-trend and impact analysis of studies, journals, authors, institutions, and countries. We also identified Conceptual, Intellectual, and Social structure of this line of research. To fulfill our purpose, we applied a bibliometrics approach to 92 research papers from 1993-2023, which we acquired from Web of Science (WoS) database.

Introduction

A review of the literature in the field of internal audit quality shows the variety of topics in the research conducted in the past years. Therefore, a systematic review of the research is conducted in this field with the intention of creating a deeper understanding of the research on internal audit quality for researchers who intend to study in this field, and drawing some potential future research paths for this field.
The main research questions are as follows:
1) What is the trend of studies conducted in the field of internal audit quality? (Trend analysis)
2) Which are the most influential articles, authors, journals, research institutions, and countries in the field of internal audit quality research? (Impact analysis)
3) Which topics form the body of knowledge of internal audit quality research? (Conceptual structure)
4) Which topics in the field of internal audit quality have been sufficiently developed and which are still developing and need further investigation? (Conceptual structure)
5) What are the cooperation networks between authors, research institutions, and countries in conducting internal audit quality research? (Intellectual and social structure)

Literature Review

2.1. Determinants of internal audit quality
Based on previous research, the personal characteristics of the internal auditors (Erasmus and Coetzee, 2018), the support and power of senior management (Jiang et al., 2018), Organizational independence and commitment, the time pressure imposed on the internal auditor (Samagaio and Felício, 2022), the use of information technology by internal auditors (Deribe and Regasa, 2014), the quality of the audit committee's performance and its participation in internal audit planning and reporting (Abdullah, 2018), the size of the internal audit (Erasmus and Coetzee, 2018), and the uncertainty and complexity of the company's environment (Jiang et al., 2018) affect the internal audit quality.
2.1. Concequences of internal audit quality
According to previous research, the high-quality internal audit can affect the quality of corporate governance (Lenz and Hahn, 2015), internal controls quality (IIA, 2015), earnings management and financial reporting quality (Prawitt et al., 2009), external audit fee (Mat Zail et al., 2015), and external audit delay (Abbott et al., 2012b).

Methodology

In this paper, the bibliometric analysis is used in order to examine the trend and impact analysis, as well as analyze the conceptual, intellectual, and social structure of the internal audit quality research field. Also, in order to implement bibliometric methods, the Bibliometrix package is used in R.

Results

Our findings indicate an increasing trend in the number of research studies on internal audit quality literature. We also document that Prawitt et al. (2009) is the most cited paper; David A. Wood from Brigham Young University is the most influential author; Accounting Review is the most influential journal; Managerial Auditing Journal is the most productive journal; Brigham Young University is the most prolific institution; and the USA is the most influential country in this research field. "Corporate Governance", "Internal Controls", "Audit Effectiveness", and "Audit Competency" are among the dynamic topics that are well-developed in internal audit quality literature. "Earnings Management" and "Risk Management" are emerging topics, and we predict an increase in the number of studies on them in the years to come. We also argue that although "Accountability" is a critical topic in internal audit quality literature, it can still be developed further in future research.

Discussion

The results indicate the concepts of "corporate governance", "audit committees", "earnings management", "internal controls", and "financial reporting quality" are the most frequent keywords in this field. Repetition of these concepts in the articles of this field can emphasize the role of high-quality internal audit in a suitable structure of corporate governance, indicating its role in strengthening internal controls and preventing managers’ misconduct, and ultimately increasing the transparency and quality of financial reporting. Also, "earnings management" and "risk management" are hot topics and of particular interest to researchers and academics. It is expected that future research will focus on these two topics. Also, the analysis of the thematic map of keywords in the research field of internal audit quality shows the important role of "accountability" in improving the quality of internal audit and its potential for development and growth in future research. The global map of countries' cooperation in the field of internal audit quality shows that the most scientific cooperation of countries in the field of internal audit quality research is dedicated to some developing countries. It seems that the quality of internal audit in these countries has a double importance in the eyes of researchers and professionals.

Conclusion

The findings of this paper can provide researchers with an insight to conduct studies on the quality of internal audit in the future. This research has several contributions. This research is the first attempt to use bibliometric methods in order to review the internal audit quality literature. The results of this research not only provide a comprehensive picture of the research in this field but also help in the direction of future studies by introducing the hot topics in the field. Also, researchers can refer to the results of this research in choosing co-authors or research institutions to conduct joint research in the field of internal audit quality.
The professionals can use our results to improve the quality of internal audits by knowing the related key issues and the researchers and sources who have produced more reliable documents.