The Research Department of Economics and Management of Tadbir Nikan Business, Marketing, and Finance Open 3092-6238 In Press 2027 05 01 Empirical Testing of a Business Risk–Based Auditing Model in Iran: A Partial Least Squares Approach Empirical Testing of a Business Risk–Based Auditing Model in Iran: A Partial Least Squares Approach 1 22 EN Journal Article 2026 03 10 <p>Business risk–based auditing, as a contemporary auditing approach, emphasizes an in-depth understanding of the business environment, strategic risks, and factors affecting the going-concern status of the audited entity. Despite the importance of this approach in enhancing audit quality, its effective implementation in Iran faces structural, institutional, cultural, and technological barriers. Accordingly, the present study aimed to empirically validate a business risk–based auditing model in Iran and examine the relationships among its principal dimensions. In terms of purpose, this study was applied, and in terms of methodology, it employed a quantitative descriptive-survey design. The statistical population comprised experts, auditors, members of the Iranian Association of Certified Public Accountants, and financial managers familiar with the business risk–based auditing process. The required data were collected using a researcher-developed questionnaire, and data obtained from 384 completed questionnaires were ultimately analyzed. Exploratory factor analysis and partial least squares structural equation modeling were employed to examine the factor structure and validate the proposed model. Data analysis was conducted using SPSS and SmartPLS software. The findings indicated that the proposed model demonstrated an acceptable level of fit, with a standardized root mean square residual value of SRMR = .055. The results further showed that the relationships among the principal dimensions of the model were statistically significant at the 99% confidence level. Structural barriers, including inadequate transparency, ineffective internal controls, and process-related constraints, had a significant effect on weaknesses in the analytical system of business risk–based auditing. In addition, institutional and cultural factors, technological limitations, and time pressure played influential roles in intensifying the challenges associated with implementing this approach. Formalistic and compliance-oriented action strategies also mediated the relationship between weaknesses in the analytical system and inefficient audit outcomes. These outcomes were primarily manifested in the weakening of the audit oversight function and a decline in stakeholder trust. The findings demonstrate that the successful implementation of business risk–based auditing in Iran does not depend solely on technical modifications to auditing procedures; rather, it requires organizational restructuring, enhanced information transparency, improved technological infrastructure, and a reassessment of the professional and institutional culture of auditing. The findings may assist the Iranian Association of Certified Public Accountants, audit firms, and regulatory bodies in developing implementation guidelines, improving risk assessment processes, and enhancing the quality of auditors’ decision-making.</p> https://bmfopen.com/index.php/bmfopen/article/download/549/471