The relationship between audit fees and reporting delay with financial statements tone in companies listed on the Iraq Stock Exchange

Document Type : Research Paper

Authors

1 M.A. of Accounting, Department of Accounting, Faculty of Economics & Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran, . Email: sadeqrazaq33@gmail.com

2 Professor of Accounting, Department of Accounting, Faculty of Economics & Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran Email: bagherpour@um.ac.ir

3 Professor of Accounting, Department of Accounting, Faculty of Economics & Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran. Email: hesarzadeh@um.ac.ir

10.22111/ijbds.2025.52875.2270

Abstract

Purpose: Financial reporting is a competitive strategy among companies listed on capital markets, providing stakeholders with timely and reliable data. The sensitivity of topic drives development of increasingly sophisticated reporting languages, enhancing financial transparency. Thus, this study examined relationship between audit fees and reporting delays with tone of financial statements in companies on the Iraq Stock Exchange.
Design/methodology/approach: Data from companies on the Iraq Stock Exchange were collected from 2016 to 2021, encompassing 33 companies (198 observations). A random-effects multiple regression analysis using panel data was conducted to evaluate the hypotheses.
Findings: Results demonstrated audit fees, auditor skill, and auditor turnover positively influence upbeat tone of financial statements. In contrast, prolonged reporting delays lead to more negative tone. Furthermore, earnings management and the debt-to-equity ratio contributed to less optimistic tone in financial statements.
Originality/value: Originality of study lies in its exploration of intersection between audit fees, reporting delays, and tone of financial statements, specifically within context of companies on the Iraq Stock Exchange. While prior research has examined relationship between audit fees and financial reporting quality, few studies have investigated how these factors influence tone of statements in emerging markets. Focus on Iraq, an economy with a unique regulatory and market environment, adds new insights into dynamics between audit-related costs, reporting timeliness, and narrative style of financial disclosures. This study also contributes to broader literature by highlighting how both audit-related factors and financial metrics impact tone of reporting, offering a nuanced understanding of corporate communication practices in an underexplored market.

Keywords

References

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International Journal of Business and Development Studies
Volume 17, Issue 2
October 2025
Pages 111-128

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