Islamic Religious Atmosphere and Audit Pricing: Evidence from Iran. Issue 4 (14th July 2021)

• Record Type: Journal Article
• Authors: Khodakarami, Mehdi; Rezaee, Zabihollah; Hesarzadeh, Reza
• Is Part Of: Business ethics, the environment & responsibility. Volume 30:Issue 4(2021)
• Page Start: 716
• Page End: 737
• Publication Date: 2021-07-14
• Subjects: Business ethics -- Periodicals; Social responsibility of business -- Periodicals; Business enterprises -- Environmental aspects -- Periodicals; 174.4; 174.4
• DOI: 10.1111/beer.12364
• Languages: English
• ISSNs: 2694-6416

Abstract

Abstract: This study examines whether the Islamic religious atmosphere of local communities influences audit pricing. We use a comprehensive survey conducted by Iran's Ministry of Culture and Islamic Guidance to measure the Islamic religious atmosphere. Using a sample of 1, 204 observations from firms listed in Iran's capital market, we find that firms located in regions with a strong Islamic religious atmosphere pay significantly lower audit fees. Furthermore, the study reveals that family ownership (auditor size) strengthens (weakens) the aforementioned relationship. However, we did not find a significant moderating role for the local community's social capital. We contribute to the ethics literature by providing a better understanding of the economic consequences of the religious atmosphere and offering policy, practical, and educational implications.