Validation of a Model of Factors Affecting the Improvement of Accounting and Auditing Quality in Companies Listed on the Tehran Stock Exchange
Keywords:
Accounting and auditing quality, stock exchange, auditor independenceAbstract
The objective of this study was to develop and validate a model of factors affecting the improvement of accounting and auditing quality in companies listed on the Tehran Stock Exchange using a mixed-method approach. This study employed an exploratory mixed-method design. In the qualitative phase, grounded theory methodology was applied through semi-structured interviews with 14 accounting and auditing experts with more than 10 years of professional experience to identify key concepts and construct a paradigm model. In the quantitative phase, the statistical population included accountants and auditors of listed companies, from which 341 participants were selected. Data were collected using a researcher-developed questionnaire. Qualitative data were analyzed using MaxQDA software, and quantitative data were analyzed using structural equation modeling (SEM) with PLS software. Reliability and validity of the instrument were confirmed through Cronbach’s alpha, composite reliability, AVE, and model fit indices. Structural equation modeling results indicated that developing appropriate accounting and auditing standards (β=0.32), auditor independence (β=0.46), and auditor competence (β=0.37) had significant positive effects on improving accounting and auditing quality (T>1.96). Furthermore, improved accounting and auditing quality had significant positive effects on disclosure quality (β=0.36) and investor confidence (β=0.41). In contrast, inflation (β=-0.31), sanctions (β=-0.36), government-dominated economy (β=-0.36), and lack of transparency (β=-0.35) had significant negative effects on disclosure quality and investor confidence. Additionally, disclosure quality and investor confidence had significant positive effects on stock market development and economic growth. The overall model fit index (GoF=0.705) confirmed the adequacy of the structural model. The findings demonstrate that professional factors such as appropriate standards, auditor independence, and auditor competence are the primary drivers of accounting and auditing quality, whereas macroeconomic and institutional factors negatively influence financial transparency and investor trust; improving accounting and auditing quality plays a crucial role in enhancing disclosure quality, strengthening investor confidence, and promoting capital market development and economic growth.
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Copyright (c) 2025 Kamran Zanjanitabar (Author); Arezoo Khosravani (Corresponding author); Arefeh Mohaghegh (Author)
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