Development of the Audit Quality Model

The purpose of this research is development of Audit Quality model, with regard to contextual and environmental attributes and conditions governing the audit profession in Iran. For this, with regard to exploratory approach of this research, and because of special attributes of Iran's audit profession in terms of the legal environment, regulatory and supervisory mechanisms, audit firms size, and etc., we used qualitative research method and grounded theory approach. Therefore, with obtaining the insights of auditing and capital market experts through unstructured interviews, we discovered determinants of Audit Quality (AQ) and finally developed "Integrated Audit Quality Model" including causal conditions, intervening conditions, context, as well as action strategies related to AQ and their consequences. In this research, AQ with a systemic approach is considered. In this approach, the quality of inputs, process and outputs of auditing determines AQ, so quality of different parts of this system is considered.Since the qualitative method with grounded theory approach has not been used so far in accounting and auditing researches in our country, one of the innovations of the present study is to apply this method. Furthermore, due to the fact that AQ has a complex and multifaceted nature, and, in addition to personal characteristics and performance of auditors, is affected by the attributes of the clients, stakeholders and other persons contribute in financial reporting supply chain, and surrounding legal and regulatory environment, various aspects of AQ were considered to achieve a more comprehensive model.According to the results, partner's commitment to AQ is the most important factor in audit engagement and firm level, which if coupled with knowledge and experience and having the necessary facilities, and implementing action strategies, lead to achieving AQ. Factors such as "effectiveness of quality control system, licensing and certification requirements of CPAs, demand for AQ, effectiveness of holding auditors accountable, audit inputs quality, appropriateness of number of audit firms and companies, supporting auditors against pressure and changing" in audit profession level, and "firm size and structure, reputation, industry specialization, appropriateness of audit fee, durability of partners and staffs, tenure, time pressure, and complexity of business transactions" in audit engagement and firm level are intervening conditions that affect AQ. These factors are presented in "Integrated Audit Quality Model".