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1- Ph.D. Student of Accounting, Faculty of Economics and Management, Urmia University, Urmia, Iran
2- Department of Accounting, Faculty of Economics and Management, Urmia University, Urmia, Iran ,p.chalaki@urmia.ac.ir
3- Department of Accounting, Faculty of Economics and Management, Urmia University, Urmia, Iran
2- Department of Accounting, Faculty of Economics and Management, Urmia University, Urmia, Iran ,
3- Department of Accounting, Faculty of Economics and Management, Urmia University, Urmia, Iran
Abstract: (17 Views)
Introduction: This study focuses on examining ethical commitment to financial reporting transparency and its role in the process determining the type of audit opinion. In this regard, the effect of the CEO’s succession origin (internal vs. external) on the type of audit opinion is investigated, and it is explained how ethical commitment to reporting transparency can mediate this relationship. The importance of the topic lies in the fact that the origin of a CEO’s appointment can influence their ethical attitudes toward financial reporting and, consequently, affect auditors’ perceptions of the risk of material misstatement.
Material and Methods: This is an applied study conducted using a descriptive–correlational approach. The statistical population includes all companies listed on the Tehran Stock Exchange. After applying screening criteria, 138 companies were selected as the sample over the period 2010–2023 (1389–1402). Raw data were collected through data extraction from the Tehran Stock Exchange Organization database, Rahavard Novin software, companies’ financial statements, accompanying notes, the board of directors’ activity reports, and independent auditors’ reports. Data analysis was performed using multivariate regressions (logistic and ordinary least squares), while controlling for year and industry fixed effects.
Results: The results indicate that an internally appointed CEO increases the likelihood of receiving an unmodified audit opinion. In addition, internally sourced CEOs exhibit a higher ethical commitment to financial reporting transparency than externally sourced CEOs. Mediation analysis further shows that ethical commitment to financial reporting transparency mediates the relationship between CEO origin and the type of audit opinion; that is, an internal origin, by strengthening ethical reporting behaviors, reduces the auditor’s perceived risk and lowers the probability of issuing a modified audit opinion.
Conclusion: For the first time in the Iranian institutional context, this study examines the effect of CEO origin on the type of audit opinion through the lens of ethical reporting behaviors. The findings demonstrate that the ethical dimensions of CEO performance play a fundamental role in shaping auditors’ judgments and financial reporting outcomes.
Material and Methods: This is an applied study conducted using a descriptive–correlational approach. The statistical population includes all companies listed on the Tehran Stock Exchange. After applying screening criteria, 138 companies were selected as the sample over the period 2010–2023 (1389–1402). Raw data were collected through data extraction from the Tehran Stock Exchange Organization database, Rahavard Novin software, companies’ financial statements, accompanying notes, the board of directors’ activity reports, and independent auditors’ reports. Data analysis was performed using multivariate regressions (logistic and ordinary least squares), while controlling for year and industry fixed effects.
Results: The results indicate that an internally appointed CEO increases the likelihood of receiving an unmodified audit opinion. In addition, internally sourced CEOs exhibit a higher ethical commitment to financial reporting transparency than externally sourced CEOs. Mediation analysis further shows that ethical commitment to financial reporting transparency mediates the relationship between CEO origin and the type of audit opinion; that is, an internal origin, by strengthening ethical reporting behaviors, reduces the auditor’s perceived risk and lowers the probability of issuing a modified audit opinion.
Conclusion: For the first time in the Iranian institutional context, this study examines the effect of CEO origin on the type of audit opinion through the lens of ethical reporting behaviors. The findings demonstrate that the ethical dimensions of CEO performance play a fundamental role in shaping auditors’ judgments and financial reporting outcomes.
Keywords: Ethical commitment to reporting transparency, CEO origin, Professional ethics, Type of audit opinion
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© 2026 CC BY 4.0 | International Journal of Ethics and Society
This work is licensed under a Creative Commons Attribution 4.0 International License.
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