Providing a Framework for Identifying and Recognizing Key Audit Matters and Examining Its Impact on Audit Quality
Keywords:
Identifying major audit issues, regulatory frameworks, institutional structures, audit qualityAbstract
Identifying key audit matters, as both an art and a science, requires a deep understanding of the various dimensions of the business environment and human interactions. This study, with a comprehensive perspective on the essence of recognizing key audit matters, seeks to demonstrate how continuous efforts toward personal and professional development can elevate audit quality beyond expectations. In this pursuit, grounded in methodological reasoning, both qualitative and quantitative approaches were employed in parallel to examine the phenomenon in a comprehensive manner. In the qualitative phase, through thematic analysis and in-depth interviews with experts, the components of identifying key audit matters were extracted. Subsequently, using a researcher-developed questionnaire, data related to this variable were collected. For audit quality, a standardized questionnaire was utilized to more precisely measure the dimensions of this construct. Finally, to test the study’s hypotheses, structural equation modeling with the partial least squares method was applied. By integrating qualitative and quantitative approaches, this research not only achieved a deeper understanding of the identification of key audit matters but also demonstrated how this practice can serve as a key factor in enhancing audit quality to a higher level. The results revealed 4 overarching themes (regulatory frameworks and professional requirements, institutional and environmental structures, client-specific characteristics, and individual and professional frameworks of auditors), 8 organizing themes (ethical requirements and auditor accountability, the role of regulatory structures in shaping auditor behavior, the influence of institutional structures on auditor behavior, the economic environment and its impact on the audit process, client financial and operational characteristics, client governance and managerial attributes, individual auditor characteristics, and professional and organizational auditor attributes), and 55 basic themes. Moreover, the findings from the quantitative phase indicated that identifying key audit matters has a positive and significant effect on audit quality. The outcomes of this study can provide valuable contributions and practical applications for regulators, auditing policymakers, and other oversight bodies in the Iranian audit market. The findings can assist them in gaining a better understanding of the dimensions of key audit matters and in adopting mechanisms and regulations aimed at improving professional judgment and audit quality.
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Copyright (c) 2025 Aqeel Salim Mohammed (Author); Khadijeh Ebrahimi Kahrizsangi (Corresponding author); Adil Basheer Dhahir Dukhkhani , Saeid Aliahmadi (Author)
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
