Abstract Considering the importance of potential litigation Risk motives in the Risk-based audit process, this paper assessed the impact of annual audit adjustments and earnings management due to Material errors & Misstatement in clients' financial reporting on the modified audit opinion. Research population includes 131 listed firms in Tehran Securities & Exchange over the period March 2012 till March 2020. Research Hypotheses analyzed using multivariate binary logit regression models based on firm-year observations. Findings showed that more earnings management due to Misstatement in clients’ financial reporting lead to increase the likelihood of issuance the modified opinion by auditors. Also, as the prior period adjustments due to errors in clients’financial reporting increase, the likelihood of issuance the modified audit opinion has increased. In addition, the evidence suggested that the higher level of abnormal accruals and abnormal real activities to manage earnings has strengthened the positive relationship between annual adjustments and likelihood of issuance modified audit opinion. In fact, annual adjustments and earnings management as consequences of errors and Misstatement in clients' financial reporting expose auditors to litigation Risk, which is expected to result in more auditors effort and audit quality in Risk-based audit process. In such circumstances, the auditors act conservatively in order to reduce the potential litigation Risk and respond by issuance the modified audit opinion.

Objective: According to the agency theory, managers have many incentives to have their audit reports presented with a favorable opinion; they are looking for auditors who will behave according to their wishes and have less professional skepticism about financial statements. Expectations can lead to buying the auditor's opinion and increase the possibility of distortion and fraud in financial statements (Fakhari and Amiri, 2019). In response to the increasing complexity, the auditing profession expects to minimize Material Misstatements in financial statements by exercising professional skepticism among auditors (Nolder and Kados, 2018). Hurtt (2010) defines professional skepticism as an attitude of constant pessimism and the habit of delaying an opinion until one obtains sufficient information and evidence and believes that when the auditor has doubts about the reliability of the information provided by the owner, has doubts and wants to look for more signs. Therefore, he can search for more information and conduct additional investigations to create a sufficient basis for better judgments. Professional doubt is a behavioral issue, and from a theoretical point of view, it explains what is known as the underlying principle in the fundamental principles of auditing and assurance (Hosseini et al., 2014). Religiosity and religious beliefs are among the most important behavioral factors that can influence the behavior of accountants and auditors, and professional doubt is no exception to this rule (Khoshbakht et al., 2022). According to the theory of McDaniel and Burnett (1990), religiosity means belief in God, along with the commitment to follow the principles defined by God. The goal of teaching religion and performing rites and rituals is to create moral transformation in human beings. According to the theory of religious ethics, religion is connected with ethics, and religion is the source of ethics; therefore, religiosity can drive moral behavior (Mahdavi et al., 2022). On the other hand, ethics in auditing causes the professional doubt of the auditor to increase because he reasons carefully in the auditing process and has a deep view of and even beyond those issues. In other words, ethics, which results from religion, will increase the auditor's exploratory search to obtain the required evidence and improve professional doubt (Birjandi et al., 2018). Among the behavioral factors that can affect the prevention of fraudulent financial reporting by accountants and the evaluation of auditors is the level of belief and adherence of accountants and auditors to their moral and religious principles (Khoshbakht et al., 2022). Therefore, it can be expected that religious beliefs significantly affect the relationship between professional doubt and distortion Risk assessment. Based on this, the present study aims to investigate the effect of professional doubt on the auditors' assessment of the Risk of Material Misstatement, emphasizing the moderating role of religious beliefs with an Islamic approach.Method: The current research is practical in terms of its purpose and quasi-experimental and survey in terms of research nature. The time domain of the research is 2022. This research uses a scenario-based questionnaire to test the research hypotheses. The standard questionnaire is taken from Hosseini et al.'s research (2017). In order to control the effects caused by severe economic fluctuations, the audit period of the scenario of 2015 has been considered, and to compare the results of the research with previous research such as Hossein et al. has been used in the Tehran Stock Exchange so that the numbers and figures of the scenario in terms of salable product, receivables collection period, etc. are consistent with Iran's economic environment. The second part raised questionnaires related to professional doubt and religiosity. To measure the variable of professional doubt, the 30-question questionnaire of Hurtt (2010) was used as a five-point Likert scale, which includes six dimensions of questioning mind, pause in judgment, knowledge search, interpersonal understanding, self-confidence and self-assurance. To measure the variable of religiosity according to the standard questionnaire of Khodayari Fard et al. (2009) and the localized model of Allport and Ross (Shojaizand, 2010), in the form of a 25-question questionnaire including 13 items for faith, 6 items for piety and 6 items for certainty was used. Finally, the participant's demographic information was asked in the third part of the questionnaire. The statistical population of this research is auditors working in the auditing profession, and using Cochran's formula, 384 people were selected as the research sample. In order to collect the required sample, 460 questionnaires were distributed in person and electronically. Among them, 384 complete questionnaires were extracted without defects, and finally, the data were collected using the structural equation method and SmartPL software. S was analyzed. The variables used in this research are divided into three categories: independent, dependent and moderator. The independent variable of the research is professional doubt, the dependent variable of the research is the auditors' assessment of the Risk of significant distortion, and the variables of religiosity with three degrees of faith, piety and certainty are the moderating variables.Findings: The results of structural equation model analysis showed that the significance value of all hypotheses is greater than 1/96, which is significant at the 95% confidence level. Therefore, the hypotheses of the research are confirmed. The standardized path coefficient of the assumptions is also greater than 0/4, which shows the factors' positive effect on assessing the Risk of significant distortion. The coefficients of the path with a value of 0/83 showed that among religious beliefs, faith has the greatest effect on professional doubt and, finally, on the evaluation of the Risk of significant distortion, which is completely consistent with the verses and traditions in the field of faith, because the first order of religiousness is faith that the rest of the levels appear after it. The influence coefficient of certainty and piety, with values of 0/69 and 0/65, respectively, show the second and third rank for these variables in influencing the evaluation of the Risk of significant distortion. This change in ranking for certainty and piety in the research findings is different from religious sources because certainty is the opposite of doubt, which will have a significant effect on the professional doubt of auditors, and from this aspect, it is more important than piety in auditing.Results: The first hypothesis examined the moderating effect of religious beliefs on the relationship between professional skepticism and assessing the Risk of significant distortion. The results showed that religious beliefs positively affect the relationship between professional skepticism and Material Misstatement Risk assessment, and the higher the auditors' commitment to religious beliefs, the higher the quality of Material Misstatement Risk assessment. The result of the first hypothesis is consistent with the research results of Kargarkamvar et al. (2023), Adil et al. (2022) and Mahdavi et al. (2022). It confirms the research of Peransanti and Yulianto. Next, religious beliefs were examined in the three sections of faith, piety and certainty in the form of the second to fourth hypotheses. The results of the considered hypotheses were confirmed. By winning first place for faith in religious beliefs, it showed faith in God, faith in resurrection and auditing even the smallest actions and behaviors, and faith in the punishment with a positive effect on professional doubt, accuracy and sensitivity of auditors in evaluation. It raises the Risk of Material Misstatement. Certainty with the second rank is effective in this connection. Certainty is the opposite of skepticism, and auditors with faith will be cautious in applying judgment in doubtful situations so that they do not reach the level of certainty through scientific and objective examination. Therefore, auditors with a higher degree of certainty in religious beliefs will be more successful in assessing the Risk of Material Misstatement due to higher professional skepticism. Finally, with the third rank, piety positively affected the relationship between professional doubt and assessing the Risk of significant distortion. Pious auditors by avoiding things contaminated with sin, fraud and suspicion and insisting on the truth in speech, observing trust, and adhering to covenants, the result of which, according to the verses of the Holy Quran, is solving problems and getting rid of worldly doubts; They will exercise higher professional skepticism that results in a more Material Misstatement Risk assessment. The results of the second to fourth hypotheses are consistent with the religious teachings according to the verses and traditions and align with the research results of Atrat Dost et al. (2021) and Pourmehdi et al. (2021).

Based on the business Risk audit (BRA) approach, auditors should define and perceive strategic management control techniques and operating processes to evaluate a business. They should also select Risk control processes in vital operating processes to estimate the type and magnitude of residual business Risks that might affect the accuracy and fairness of financial statements. In the present study, using a qualitative approach with the help of Grounded theory and in-depth interviews with 31 auditing experts in 2021 with the titles of partner, members of the audit organization and members of IACPA specialized working groups, to understand their mental meanings and BRA approach to conduct the audit was interviewed. In addition, textual data from notes and articles in international professional journals on BRA were used, which mainly provided the views of various experts. The research data were analyzed using open coding method in Grounded theory and major categories, categories, and subcategories (concepts) were extracted. Using a systemic approach that includes inputs, processes, outputs, outcomes and contextual factors, the model of audit production efficiency was designed based on the business Risk audit and the categories that emerged were presented. Considering the limited scope of previous research on BRA and especially the lack of comprehensive research in Iran, the designed model, which is multifaceted and the result of the views of various auditing experts, provides a broad and comprehensive view of audit production efficiency based on the business Risk audit that can be used in audit quality improvement programs, evaluating independent audit and other macro strategies for the development of audit methodology in Iran. Given the flaws and shortcomings of Iran’, s current auditing framework, integrating the BRA approach into the current framework will be promising. At the same time, this approach can prevent over-auditing due to its proved inherent value. It can also be considered a naturally correct method of auditing.

In evaluating a business based on the business Risk audit (BRA) approach, auditors should define and perceive strategic management control techniques and operating processes. They should also select Risk control processes in vital operating processes to estimate the type and magnitude of residual business Risks that might affect the accuracy and fairness of financial statements. Given the international re-emergence of BRA concepts in recent years, this approach is considered an essential innovation in the auditing methodology. This study aims to analyze the attitude of Iranian auditing experts toward the BRA efficiency for stakeholders. For this purpose, a researcher-made questionnaire was designed in three dimensions: normative legitimacy of BRA, pragmatic legitimacy of BRA, and cognitive legitimacy of BRA (per dimensions of the legitimacy theory proposed by Greenwood, Suddaby & Hinings, 2002). The questionnaire was then distributed to a research sample including the Partners, Audit Org., and IACPA obtained at the end of 2021,the research results indicated that the BRA approach had normative legitimacy (m= 3. 61), pragmatic legitimacy (m= 3. 78), and cognitive legitimacy (m= 3. 29) in Iran for the opinions of experts and statistical findings. Given the flaws and shortcomings of Iran’, s current auditing framework, integrating the BRA approach into the current framework will be promising. At the same time, this approach can prevent over-auditing due to its proven inherent value. It can also be considered a naturally correct method of auditing.

Since ijtihad and the deduction of religious rulings are not possible for everyone, and acting based on precaution (ihtiyat) is often very difficult for ordinary people, the general practice among the devout is to follow a qualified jurist (marjaʿ) in religious rulings. On the other hand, the fatwas of jurists are sometimes expressed in specialized language and require clarification by a preacher or religious expert. In practice, it is observed that these religious experts or preachers may make mistakes in conveying rulings related to financial issues such as khums, zakat, and kaffarat, which can cause financial losses to the legally accountable individual (mukallaf). In some cases, these losses cannot be compensated, even though they result from the negligence, error, or sometimes intentional Misstatement by the religious expert. This study, using a descriptive-analytical approach, aims to examine the civil liability of this group of religious preachers. According to jurisprudential and legal principles, if a preacher is negligent or at fault in misrepresenting religious rulings, and the inquirer acts upon this Misstatement in good faith and suffers loss, the preacher cannot be exempted from liability based on the rule of ihsan (benevolence). Since the elements of civil liability are fulfilled, the preacher—based on the rules of tasbib (causation), ihtiram (respect for others’ rights), and la darar (no harm)—is responsible and obligated to compensate for the damage caused.

Auditors are always looking to identify factors that can be used for estimating the Risk of Material Misstatement more accurately at the level of financial statements. In this regard, this study examined whether decisions to hire or fire the staffs that make an important part of the company's operations help to anticipate accounting Misstatements and, consequently, whether this affect the timing of auditor's reporting of auditor's fee and resubmission of financial statements. The research period of 1392-1398 was considered, during which 105 companies listed on Tehran Stock Exchange (TSE) were selected as the samples and the research hypotheses were tested by using Ordinary Least-Squares (OLS) regression and binary regression. The results of testing the research hypotheses indicated that the effect of abnormal investment in the staffs on the delay in submitting the auditor's report and restatement of financial statements was not accepted, but its effect on auditor's fee was accepted. Our results showed that the auditors of the sample companies were able to correctly estimate the Risk of Material Misstatement caused by abnormal investment in labor and other factors and plan their proceedings to cover the Risk of Material Misstatement through proper and timely planning. The results of this study provided evidence that auditors pay attention to red flags in financial reporting when reviewing financial statements.

Investors in the capital market sometimes exhibit emotional and irrational behavior, which can impact two groups of individuals. On one hand, company managers may act on their opportunistic motives when observing this emotional atmosphere. On the other hand, auditors may underestimate their legal Risk and reduce the number of content tests they perform, resulting in a decrease in their fees. The purpose of this study is to examine the effect of investors' sentiments on the probability of Misstatement of financial statements and the conservatism of auditors in companies listed on the Iranian IFB stock exchange. A sample of 51 companies listed on the Iranian IFB stock exchange between 2013 and 2020 was selected, and multivariate regression and logit regression were used to test the research hypotheses. The results of the study indicate that investor sentiment does not significantly impact the likelihood of Misstatement of financial statements or the likelihood of issuing a going concern opinion. However, it does have an inverse and significant effect on audit fees. As investor sentiment increases, auditors become less conservative, resulting in a reduction in audit fees. The keywords for this study include investors' sentiment, Misstatement, auditors' conservatism, legal Risk, and going concern opinion.IntroductionAs investors' sentiment intensifies, they tend to pay less attention to the financial statements and fundamental information of companies, instead relying on exaggerated and sometimes fictitious news and information published in the media and press. These conditions may incentivize managers to take advantage of the situation by misstating information that portrays the company's future growth prospects in a positive light for investors. However, if the image presented to investors is inconsistent with the reality of the company, the likelihood of financial statement fraud may increase. Additionally, auditors who are responsible for validating financial statements are also impacted by the investors' sentiment. On one hand, it is possible that investors' inattention to financial statements due to heightened sentiments may cause auditors to perceive less (or more) legal Risk. This could result in a decrease (or increase) in the conservatism of auditors, with less (or more) effort put into obtaining sufficient and appropriate audit evidence. As a result, auditors may charge lower (or higher) fees to the employer or issue a statement of going concern opinion with less (or more) strictness. Therefore, this study aims to investigate the impact of investors' sentiment on the likelihood of financial statement Misstatement and the conservatism of auditors. At times, the sentiments of investors have caused irrational fluctuations in the capital market. In such conditions, the media space is used to draw a bright future for various companies, enticing investors who do not trade based on fundamental information. However, with the passage of time and the emergence of actual company performance, the capital market corrects its emotional and inaccurate process through the release of new and confirmed information. Nevertheless, it is the immature investors who have acted under the influence of their emotions that ultimately become the main victims of this situation. Therefore, studying the field of investors' sentiments is crucial. While various experimental researches have dealt with different dimensions of investors' sentiments, the impact of investors' sentiments on the behavior of managers and auditors in the context of the Iranian capital market has not been addressed. This research aims to investigate whether investors' sentiments have an effect on the likelihood of financial statement Misstatement and the conservatism of auditors. Methods & Material For the purpose of hypothesis testing, the research covers the time period between 2013 and 2020. The statistical population consists of all companies listed on the Iranian IFB stock exchange. The focus of the study is on the conservatism of auditors, making it appropriate to analyze a market dominated by smaller and Riskier companies. The sample selection process involves excluding companies that do not meet certain criteria, such as being present in the Iranian stock market during the research period, not being in the financial industry, banking or financial intermediation, having a fiscal year ending on the Iranian calendar, not changing their fiscal year during the research period, having available information, and not having a trading break of more than one year. Applying these conditions and limitations, the study ultimately selected a sample of 51 companies from the Iranian IFB stock exchange, providing a total of 408 observations (company-years) for analysis. The study considers the "investor sentiment index" as the independent variable, while the "probability of Misstatement of financial statements", "audit fee", and "probability of issuing a going concern opinion in the audit report" are the dependent variables. To determine the sentiment index, the researchers used the principal component analysis (PCA) technique. The study employed multivariate least squares regression and logit regression to test the research hypotheses. Findings The study found that the first hypothesis was rejected, meaning that investors' sentiments do not have an impact on the possibility of financial statement Misstatement. This result can possibly be explained by the presence of appropriate institutional and structural frameworks. The second hypothesis was not rejected, indicating that investors' sentiments had a significant inverse effect on audit fees. As mentioned earlier, if auditors perceive less Risk due to investors' emotional behavior and inattention to financial information, they may reduce audit fees and provide satisfaction to their employer while also fulfilling their economic motivations and maintaining their economic link with the employer. The third hypothesis was rejected, meaning that investors' sentiments did not have a significant effect on the possibility of issuing a going concern opinion in the audit report. It can be argued that the auditor's response to increased judicial Risk may be hierarchical, and investors' sentiments may not have been enough during the study period to change the auditor's willingness to issue or not issue an ambiguity clause in the continuity of activity. Conclusion & ResultsThe findings of this study suggest that auditors should exercise caution in reducing their conservatism in response to emotional market conditions, as this behavior poses significant Risks such as audit Risk, reputation Risk, and judicial Risk. It is recommended that auditors maintain their professional skepticism and not compromise their auditing standards in response to market sentiment. Additionally, investors are advised to increase their financial literacy and avoid herd behavior in order to make informed decisions based on logic and analysis rather than emotions. This is especially important given the significant losses experienced by investors in the Iranian market in 2020 due to emotional decision-making. Overall, this research highlights the importance of maintaining objectivity and professionalism in auditing and investing, even in the face of market volatility and emotional pressures. * Corresponding author

The world is embroiled in a pandemic of a new coronavirus at the end of 2019 and early in 2020, with such a large scale that it has severely involved the political, economic, and social systems in most countries around the world. The scale of the crisis is so widespread that many experts believe that the post-corona world will be substantially different from the pre-corona world. In the face of this massive epidemic, how people perceive Risk and how to Risk is communicated, plays a central role in deciding and choosing people's behavior. Fighting with this emerging phenomenon requires mobilizing all the possibilities of society and helping all people in the field of empathy and altruism. In this article, we briefly review aspects of the important concept of Risk perception and communication in this pervasive crisis.

In this paper, a novel Risk-based, two-objective (technical and economical) optimal reactive power dispatch method in a wind-integrated power system is proposed which is more consistent with operational criteria.  The technical objective includes the minimization of the new voltage instability Risk index. The economical objective includes cost minimization of reactive power generation and active power loss. The proposed voltage instability Risk employs a hybrid possibilistic (Delphi-Fuzzy)-probabilistic approach that takes into consideration the operator’s experience, the wind speed and demand forecast uncertainties when quantifying the Risk index. The decision variables are the reactive power resources of the system. To solve the problem, the modified multi-objective particle swarm optimization algorithm with sine and cosine acceleration coefficients is utilized. The method is implemented on the modified IEEE 30-bus system. The proposed method is compared with those in the previously published literature, and the results confirm that the proposed Risk index is better at estimating the voltage instability Risk of the system, especially in cases with severe impact and low probability. In addition, according to the simulation results compared to typical security-based planning, the proposed Risk-based planning may increase the security and economy of the system due to better utilization of system resources.