Accounting and Auditing Research

Accounting and Auditing Research

Audit committee members' willingness to challenge management's significant accounting estimates (joint effects of major audit issues and investor type)

Document Type : Original Article

Authors
Mohammad Afkhami 1
Naghi Fazeli 2
Khosro Faghani Makrani 3
1 PhD student of accounting department, Semnan branch, Islamic Azad University, Semnan, Iran.
2 Assistant Professor, Department of Accounting, Semnan Branch, Islamic Azad University, Semnan, Iran (corresponding author)
3 Associate Professor of Accounting, Semnan Branch, Islamic Azad University, Semnan, Iran
10.22034/iaar.2024.216964
Abstract
New researches show that the paradigm governing audit reporting standards and the expectations of users of these reports have led to the development of new standards for reporting and the initial standardized audit report has undergone numerous content changes; This has been crystallized by the compilation of the 701 audit standard with the title "Information of the major audit issues to the governing bodies". This research with the statistical population consisting of the members of the audit committees of listed and non-listed companies and through the interview test and questionnaire, the joint effect of the content of the audit report with an emphasis on the approach of new reporting disclosures regarding major audit issues and the type of investor, whether professional investment or not. The professional and predictive perspective of these disclosures on major audit matters examines the willingness of audit committee members to challenge management's critical estimates. The results indicate that the disclosure of major audit issues in the independent auditor's report and the presence of non-professional investors highlight the duty of audit committee members to protect investors and ensure the reasonableness of financial statements, which leads to an increase in the amount of probing and challenging questions asked by the audit committee. It is monitored in the process.
Keywords
Major audit issues
audit committee
professional and non-professional investors

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Accounting and Auditing Research
Volume 16, Issue 64
Winter 2025
Pages 23-42