Accounting and Auditing Review

Accounting and Auditing Review

Audit Firm Quality Control Systems and the Performance of Audit Managers

Document Type : Research Paper

Authors
Saman Moazam 1
Abdolreza Mohseni 2
Mostafa Ghasemi 2
1 PhD. Candidate, Department of Accounting, Bu.C, Islamic Azad University, Bushehr, Iran.
2 Assistant Prof., Department of Accounting, Bu.C, Islamic Azad University, Bushehr, Iran.
10.22059/acctgrev.2026.407579.1009198
Abstract
Objective
In recent years, the quality of audit managers’ professional performance, particularly in high-risk and sensitive contexts such as regulatory bodies and audit firms, has received increasing attention. Among the key factors influencing this performance is the effective design and implementation of quality control systems within audit firms. This study aims to examine the effect of audit firms' quality control systems on the performance of professional managers in this field, emphasizing the mediating role of three key variables: psychological empowerment, auditors’ attitudes toward auditing standards, and role clarity. In this study, the performance of professional audit managers was evaluated through the five dimensions of the balanced scorecard, including learning and growth, internal business processes, clients or employers, financial, and corporate ethics.
Methods
This research is applied in purpose and descriptive-survey in method. In this study, the quality control system of audit firms serves as the independent variable, the performance of professional audit managers is the dependent variable, and the variables of auditors’ psychological empowerment, auditors’ attitudes toward auditing standards, and auditors’ role clarity function as mediating variables. The statistical population includes all professional audit managers employed in the Supreme Audit Court and private-sector audit firms in Iran. Data were collected through a structured questionnaire using a Likert scale. The reliability and validity of the measurement instrument were assessed using Cronbach's alpha, composite reliability, rho_A coefficient, average variance extracted, and Heterotrait–Monotrait Ratio (HTMT). According to statistics and data obtained from the Human Resources Department of the Supreme Audit Court and the Iranian Association of Certified Public Accountants, the population of professional audit managers in the country consists of approximately 1,671 individuals. The sample size was determined based on the Morgan table, and 352 participants were selected using a non-probability cluster sampling method. The collected data were analyzed using structural equation modeling (SEM) with SmartPLS software.
Results
The findings revealed that the audit firm's quality control system has a significant direct effect on the performance of professional audit managers. Moreover, psychological empowerment and role clarity strengthen this relationship, while the mediating role of attitudes toward auditing standards was not supported. However, this variable showed a significant moderating effect on the relationship between quality control system and managerial performance, indicating its complex and multidimensional nature in auditors’ mental frameworks. Robustness tests via multi-group analysis based on gender and employment sector were also conducted. The results showed significant differences between male and female respondents in certain model paths, while no significant differences were found between public and private sector respondents.
Conclusion
The obtained findings not only reinforce the theoretical foundations of quality control models in the auditing profession but also offer practical insights for designing motivational structures, developing professional training programs, and enhancing managerial performance in audit settings.
Keywords
Psychological empowerment, Role clarity, Managerial performance, Quality control system, Auditors&rsquo
attitudes toward auditing standards
Subjects
References
Adnan Hammood, M., Piri, P. & Ashtab, A. (2025). Feasibility of Utilizing Advanced Artificial Intelligence Technologies to Improve Auditing Processes in the Country. Accounting and Auditing Review, 32(3), 535-559. doi: 10.22059/acctgrev.2025.391837.1009085
(in Persian)
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179–211.
Ajzen, I. & Fishbein, M. (1980). Understanding attitudes and predicting social behavior. Englewood Cliffs, NJ: Prentice-Hall.
Alavi, S. M., Ghorbani, B. & Rostami, V. (2015). An investigation of factors affecting audit quality in audit firms that are members of the Iranian Association of Certified Public Accountants. Audit Knowledge, 15(60), 47–70. (in Persian)
Amofa-Sarpong, K., Tornyeva, K. & Boakye, L.Y. (2024). The Effect of Audit Process and Quality Control Systems on Audit Quality in the Public Sector: The Moderating Role of Audit Expertise. In: Aigbavboa, C., et al. Sustainable Education and Development—Clean Energy. ARCA 2023. Springer, Cham.
Antle, R. (1984). Auditor independence. Journal of Accounting Research, 22(1), 1–20.
Aobdia, D. (2020). The economic consequences of audit firms’ quality control system deficiencies. Management Science, 66(7), 2883-2905.
Bedard, J.C., Deis, D.R., Curtis, M.B. & Jenkins, J.G. (2008). Risk monitoring and control in audit firms: A research synthesis. Auditing: A Journal of Practice & Theory, 27(1), 187–218.
Beygpanah, B., Asnaashari, H., Hoshi, A. & Assadi, G. H. (2022). Accountability of audit firms: Content analysis method. Accounting and Auditing Review, 29(2), 213–241.
 (in Persian)
Chenhall, R.H. (2005). Integrative strategic performance measurement systems, strategic alignment of manufacturing, learning and strategic outcomes: an exploratory study. Accounting, Organizations and Society, 30(5), 395-422.
Ditillo, A., Endenich, C. & Hoffjan, A. (2016). Performance measurement and control systems in global audit firms-comparative case studies from Germany and Italy. The American Accounting Association Annual Meeting, New York.
Dontoh, A., Ronen, J. & Sarath, B. (2013). Financial statements insurance. Abacus, 49(3), 269–307.
Dormishi, M., Taherinia, M., Moslemi, A. & Givaki, I. (2021). The effect of auditors’ inefficient behavior on audit quality using structural equation modeling. International Journal of Nonlinear Analysis and Applications, 12, 2461-2474.
Elinda, A.I., Iswati, S. & Setiawan, P. (2019). Analysis of the influence of role stress on reduced audit quality. Jurnal Akuntansi, 23(2), 301-315.
Fiolleau, K., Hoang, K., Jamal, K. & Sunder, S. (2013). How do regulatory reforms to enhance auditor independence work in practice? Contemporary Accounting Research, 30(3), 864–890.
Frögéli, E., Rudman, A. & Gustavsson, P. (2019). The relationship between task mastery, role clarity, social acceptance, and stress: An intensive longitudinal study with a sample of newly registered nurses. International Journal of Nursing Studies, 91, 60– 69.
Gramling, A.A., Krishnan, J. & Zhang, Y. (2011). Are PCAOB-identified audit deficiencies associated with a change in reporting decisions of triennially inspected audit firms? Auditing: A Journal of Practice & Theory, 30(3), 59–79.
Gul, F.A., Wu, D. & Yang, Z. (2013). Do individual auditors affect audit quality? Evidence from archival data. The Accounting Review, 88(6), 1993–2023.
Hair, J. F., Sarstedt, M., Ringle, C.M. & Mena, J. A. (2012). An assessment of the use of partial least squares structural equation modeling in marketing research. Journal of the Academy of Marketing Science, 40, 414–433.
Hall, D. B. (2008). Measurement error in nonlinear models: a modern perspective.
Hammood, M. A., Piri, P. & Ashtab, A. (2025). Feasibility of utilizing advanced artificial intelligence technologies to improve auditing processes in the country. Accounting and Auditing Review, 32(3), 535–559. (in Persian)
Hay, D., Knechel, W.R. & Ling, H. (2008). Evidence on the impact of internal control and corporate governance on audit fees. International Journal of Auditing, 12(1), 9-24.
Hayne, C., Peecher, M.E., Pickerd, J.S. & Zhou, Y. (2023). Managing Quality Control Systems: How Audit Firms Experience and Navigate Conflicting Institutional Demands. Available at SSRN: https://ssrn.com/abstract=4339512
Hegazy, M. & Tawfik, M. (2015). Performance measurement systems in auditing firms. Journal of Accounting in Emerging Economies, 5(4), 395–423.
Hegazy, M., El-Deeb, M.S., Hamdy, H.I. & Halim, Y.T. (2023). Effects of organizational climate, role clarity, turnover intention, and workplace burnout on audit quality and performance. Journal of Accounting & Organizational Change, 19(5), 765-789.
Hegazy, M., Hegazy, H. & Eldeeb, M. (2022). The Balanced Scorecard: Measures That Drive Performance Evaluation in Auditing Firms. Journal of Accounting, Auditing & Finance, 37(4), 902–927.
Huber, C., Kraus, K. & Meidell, A. (2025). Integrating the balanced scorecard and enterprise risk management: Exploring the dynamics between management control anchor practices and subsidiary practices. Management Accounting Research, 66, 109-124.
Hwang, S., Sarath, B. & Han, S. (2022). Auditor independence: The effect of auditors’ quality control efforts and corporate governance. Journal of International Accounting, Auditing and Taxation, 47, 100-127.
Jackling, B., Cooper, B. J., Leung, P. & Dellaportas, S. (2007). Professional accounting bodies’ perceptions of ethical issues, causes of ethical failure and ethics education. Managerial Auditing Journal, 22(9), 928–944.
Kermanshahi, B., Salehi, T. & Azami, Z. (2023). Examining the dimensions of an effective balanced scorecard approach to the performance evaluation of audit firms: Using confirmatory factor analysis. Audit Knowledge, 23(93), 180–204. (in Persian)
Kinney, W. (2005). Twenty five years of audit deregulation and re-regulation: what does it mean for 2005 and beyond? Auditing: A Journal of Practice and Theory, 24(3), 89-109.
Liu, X. & Simunic, D.A. (2005). Profit sharing in an auditing oligopoly. The Accounting Review, 80(2): 677–702.
Mashayekh, S., Heydari, Z. & Mahmoudkhani, M. (2023). The status of talent management and auditing performance in audit firms. Accounting and Auditing Review, 30(2), 311–340. (in Persian)
Mehrabanpour, M., Karami, G. & Jandaghi Ghomi, M. (2021). Balanced scorecard and strategy map for Iranian audit firms. Journal of Accounting Advances, 13(2), 343–386.
(in Persian)
Palmrose, Z.V. (2006). Maintaining the value and viability of independent auditors as gatekeepers under SOX: An auditing master proposal. In U. Fuchita & R. Litan (Eds.), Financial gatekeepers: Can they protect investors (pp. 103–135). Baltimore, MD: The Brookings Institute.
Safarzadeh, M. H., Kazemi, K. & Dehghanisaadi, A. (2018). The role of auditors’ psychological empowerment in observance of the code of professional conduct: Emphasis on the moderating role of organizational status and job experience. Accounting and Auditing Review, 25(1), 71–90. (in Persian)
Sawyer, J.E. (1992). Goal and process clarity: specification of multiple constructs of role ambiguity and a structural equation model of their antecedents and consequences. Journal of Applied Psychology, 77, 130-142.
Spreitzer, G.M. (2017). Psychological empowerment in the workplace: Dimensions, measurement, and validation. Academy of Management Journal, 38(5), 1442–1465.
Tsamenyi, M., Onumah, J. & Kumah, E. (2010). Post privatisation performance and organizational changes: Case studies from Ghana. Critical Perspectives on Accounting, 21(5), 428–448.
Zulaikha, I.A. & Istiqomah, F.N. (2021). Investigating the mediating effect of the role stressor in the relationship between type a personality and auditor burnout. Advances in Social Science, Education
Accounting and Auditing Review
Volume 33, Issue 3
2026
Pages 625-654