Accounting and Auditing Research

Accounting and Auditing Research

The Role of Key Audit Matters Disclosure in Enhancing Financial Reporting Quality: Empirical Evidence from Restatements and Tax Avoidance in Iran Stock Exchange

Articles in Press

Document Type : Original Article

Authors
Zeynab Mehtari 1
Fatemeh Jafari 2
Saeed Shirshekan 3
1 Assistant Professor, Department of Accounting, Faculty of Economics, Management and Social Sciences, Shiraz University, Shiraz, Iran.
2 Master of Accounting, Islamic Azad University, Fasa Branch, Fasa,Iran
3 Master of Auditing, Imam Reza International University of Mashhad, Iran
10.22034/iaar.2026.534885.1861
Abstract
Disclosure of Key Audit Matters (KAM) is a recent requirement introduced by international auditing standards to enhance transparency, accountability, and the overall quality of financial reporting. This study aims to empirically examine the impact of KAM disclosure on two key dimensions of financial reporting quality: restatement of financial statements and tax avoidance. The statistical population includes 103 firms listed on the Tehran Stock Exchange over the period 2014 to 2024, resulting in 1,133 firm-year observations. Panel regression, logistic regression, and classical tests were employed to test the hypotheses. The results showed that disclosure of key audit matters does not have a significant effect on reducing restatements and the level of tax avoidance. Qualitative analyses also show that the effectiveness of disclosure of key audit matters depends on factors such as institutional structures, quality of disclosure, and level of user understanding. Accordingly, strengthening institutional infrastructures and enhancing users’ financial literacy may improve the impact of KAM disclosure.
Keywords
Key Audit Matters (KAMs) Disclosure
Financial Reporting Quality
Restatement
Tax Avoidance

Subjects

Accounting and Auditing Research

Articles in Press, Accepted Manuscript
Available Online from 23 February 2026