Environmental Uncertainty and Pricing of Independent Audit Services

Subject Areas :

Mohsen Tanani ¹ , Saeid Homayoun ² , Tanaz Amirzade ^{3 *}

1 - Assistant Prof. of Accounting, Faculty of Financial Sciences, Kharazmi University, Tehran, Iran.
2 - Associate Professor, Department of Business and Economic Studies, Faculty of Education and Business Studies, University of Gävle, Gavle. Sweden
3 - MSc. Student of Accounting, Faculty of Financial Sciences, Kharazmi University, Tehran, Iran.

Received: 2023-01-29 Published : 2026-01-25

Keywords: Environmental Uncertainty, Pricing of Independent Audit Services, Audit Risk.,

Abstract :

The purpose of this article is to investigate the impact of environmental uncertainty on the pricing of independent audit services in companies listed on the Tehran Stock Exchange. According to the company theory, environmental uncertainty causes financial reporting to be affected by the economic consequences of these uncertainties. Based on the theories of agency, trust building, and litigation risk, it can be argued that auditors demand a higher fee to cover the negative impact of economic consequences caused by environmental uncertainty on financial reporting and to cover the acceptable risk of auditing; For this purpose, data related to 102 companies were collected during the years 1394 to 1400 and analyzed using multivariate regression. In the current research, the two criteria of the coefficient of changes in sales and the coefficient of changes in capital expenditures are used to determine the environmental uncertainty and the natural logarithm of the audit fee is used for the pricing of auditor services. The results showed that with the increase in environmental uncertainty, the audit fee has also increased; Auditors demand a higher fee to cover their risk in uncertain environmental conditions. It can be claimed that in companies where environmental uncertainty has increased, the independent auditor has reacted to this issue by requesting more fees for the audit.