The Effect of Board Characteristics on the Relationship Between Key Audit Topics and Audit Fees

Subject Areas : Corporate governance

Elahe Shazade Hamze ¹ , Seyyed Abbas Borhani ²

1 - MSc. Department of Accounting, Qom Branch, Islamic Azad University, Qom, Iran.
2 - Assistant Prof. Department of Accounting, Qom Branch, Islamic Azad University, Qom, Iran.

Received: 2025-01-18 Accepted : 2025-02-24 Published : 2025-06-10

Keywords: Key audit issues, audit fees, corporate governance.,

Abstract :

Objective: The purpose of this study was to investigate the relationship between key audit topics and audit fees and whether the size and independence of the board of directors affect this relationship.

Method: For this purpose, this study uses data from companies listed on the Tehran Stock Exchange during the years 2013-2023. This research is quantitative, descriptive, semi-experimental, correlational and library. Multiple regression with fixed effects of year and industry, and Stata version 17 software were used to test the research hypotheses.

Findings: The results provide evidence of a significant positive relationship between key audit matters and audit fees. When the percentage of independent directors is considered as a moderating factor, this relationship is relatively higher. The results did not provide any empirical evidence to support the moderating effect of CEO duality on the relationship between key audit matters and audit fees.

Conclusion: The results are consistent with the agency theory literature and companies with good governance reduce agency conflicts of interest and improve the quality of financial reporting. Therefore, good governance may moderate the relationship between reported key audit matters and audit fees. The results of this study are very useful for standard setters and management. Regulators will better understand the consequences of adopting key audit matters. Also, management will have a better idea of ​​the role of corporate governance in increasing audit disclosure, but it will be associated with higher costs.

References:


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