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Developing and Validating of the Audit Fee Determination Model with an Emphasis on the Tone of Financial Reporting in a Mixed Method
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Taher Abdolahi1   , Saied Jabarzade *2 , Jamal Bahri3 , Asghar Pakmaram4 |
1- Department of Accounting, Faculty of Humanities, Ur.C., Islamic Azad University, Urmia, Iran.
2- Department of Accounting, Ur.C., Islamic Azad University, Urmia, Iran , s.jabarzade@iau.ac.ir
3- Department of Accounting, Ur.C., Islamic Azad University, Urmia, Iran.
4- Department of Accounting, Bon.C., Islamic Azad University, Bonab, Iran. |
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Abstract: (8 Views) |
The purpose of this study is to develop and validate a model for determining audit fees with an emphasis on the tone of financial reporting. This applied research adopts an exploratory mixed‑methods design conducted in two qualitative and quantitative phases. In the qualitative phase, the grounded theory approach was employed and data were collected through semi‑structured interviews with 12 purposively selected participants, including auditors from audit firms, auditors from the Audit Organization, and financial managers. The credibility of qualitative data was assessed based on Guba and Lincoln’s criteria, and the analysis was conducted through open, axial, and selective coding. In the quantitative phase, a researcher‑developed questionnaire derived from the qualitative findings was distributed among 305 experts and auditors selected through convenience sampling. The content validity of the questionnaire was confirmed by academic and professional experts, and its reliability was verified with a Cronbach’s alpha coefficient of 0.803. To validate the proposed model, structural equation modeling using the Partial Least Squares (PLS) approach was applied. Qualitative data analysis was conducted using MAXQDA10 software. The findings indicated that the central phenomenon of the study is “audit fee determination with emphasis on the tone of the annual report.” Causal conditions include human resources, organizational structure, and characteristics of both audit firms and clients. Contextual conditions consist of regulatory frameworks, sanctions‑related constraints, and broader political, economic, and social environments. Intervening conditions involve management report tone, working conditions, audit demand, and risk factors. Identified strategies include the status of internal control and internal auditing within client organizations, client information technology, the audit process and value creation within audit firms, as well as the role of professional associations and regulatory oversight. The results also show that the proposed model demonstrates satisfactory fit and quality, and can contribute to improving auditing processes, enhancing the quality of financial reporting, and enabling more accurate estimation of audit fees.
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Article number: 19 |
| Keywords: Audit Fees, Financial Reporting Tone, Grounded Theory, Partial Least Squares (PLS) |
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Full-Text [PDF 752 kb]
(4 Downloads)
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Article type: Research |
Subject:
General
Received: 2026/02/24 | Accepted: 2026/05/25 | Published: 2026/08/23
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