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This study examines the relationship between Related Party Transactions (RPTs) and audit fees in 163 companies listed on the Tehran Stock Exchange over 2014&ndash;2024. Despite extensive literature suggesting that RPTs increase audit risk and may affect audit pricing, our findings indicate that in the Iranian context, RPTs do not exert a statistically significant influence on audit fees. Using a panel multivariate regression model controlling for firm- and auditor-specific characteristics, the analysis reveals that other financial and audit attributes such as client importance, firm size, leverage, and auditor characteristics play a more decisive role in determining audit fees. These results diverge from some international evidence and highlight the distinctive institutional environment in Iran, characterized by concentrated ownership, government influence, limited audit market competition, and relatively weak corporate governance mechanisms. The study underscores that audit fees in Iran appear to primarily reflect auditors&rsquo; efforts to maintain general audit quality rather than respond to the presence or volume of related party transactions. Implications for policy and practice include the need to strengthen governance mechanisms, improve transparency in financial reporting, and assess how institutional context moderates the interplay between RPTs and audit processes.

NCAF.2025.14.03.pdf

Original Research 

NCAF.2025.14.03.xml

The Impact of Related Party Transactions on Audit Fees: Evidence from Companies Listed on the Tehran Stock Exchange

This study aims to examine the role of board and audit committee gender diversity in audit effort and financial reporting quality. The research follows a quasi-experimental, ex-post-facto design. To test the research hypotheses, financial data from 163 companies listed on the Tehran Stock Exchange between 2012 and 2022 are analyzed using multivariate regression and panel data techniques. The findings reject all four hypotheses. Specifically, the results of the first hypothesis test indicate that the gender composition of the audit committee has a significant negative impact on audit effort, meaning that the presence of women on the audit committee leads to a reduction in auditors' efforts and, consequently, lower audit fees. Testing the second hypothesis test shows that the presence of women in the audit committee reduces the likelihood of selecting larger, higher-quality audit firms for auditing financial reports. This suggests a lack of female participation in auditor selection and negotiation processes. As for the third hypothesis, the findings reveal no significant impact of board gender on obtaining an unqualified audit opinion, as the presence of women on the audit committee does not reduce the likelihood of the company receiving such opinions from auditors. Finally, the results of the fourth hypothesis test show that female members on the audit committee and board of directors have no significant impact on the quality of financial reporting in Iranian companies.&nbsp;

NCAF.2024.12.03.pdf

NCAF.2024.12.03.xml

Board Gender Diversity, Audit Effort, and Financial Reporting Quality