Post-Implementation Assessment of Auditing Standard 701 Across Industries: Timing of Independent Audit Report Issuance

The purpose of this article is to assess the impact of disclosing key audit matters on the lag in issuing audit reports. For this purpose, the audit reports of 451 companies listed on the Tehran Stock Exchange and Iran's Over-the-Counter (OTC) market were analyzed over a timeframe that spans two years in the past and two years post-implementation of the standard. For a more accurate assessment, analyses have been conducted at both the overall industry level and within specific industry groups. The results indicate that audit reports are typically issued, on average, 76 days after the end of the financial period. The highest level of lag was observed in industry group 3 (which includes basic metals and similar industries), while the lowest lag was found in industry group 5 (which includes cement, lime, gypsum, and similar industries). Furthermore, the findings suggest that, at the overall industry level and across most industry groups, the disclosure of Key Audit Matters leads to a lag in the issuance of audit reports. Although this effect was not particularly noticeable in the first year of the standard's implementation, it appears to have increased in the second year. The number of Key Audit Matters disclosed in the auditor's report shows a positive association with the lag in the issuance of the audit report; however, newly disclosed Key Audit Matters do not appear to significantly affect this lag.