Developing a Model of Ambiguity in Understanding Iranian Financial Reporting Standards Using Grounded Theory

Abstract

This study aimed to develop a comprehensive model explaining the dimensions, antecedents, contextual and intervening conditions, response strategies, and consequences of ambiguity in understanding Iranian financial reporting standards. This exploratory qualitative study employed grounded theory based on the Strauss and Corbin approach. Participants comprised 17 accounting and auditing experts, including university faculty members, accountants, and auditors, who were selected through purposive sampling. Data were collected through semi-structured interviews lasting approximately 20–40 minutes. Sampling and data collection continued until theoretical saturation was achieved; no substantially new concepts emerged after the fourteenth interview, and three additional interviews were conducted to confirm and refine the emerging findings. Data collection and analysis were conducted concurrently using constant comparison, and the data were analyzed through open, axial, and selective coding. The analysis yielded 117 subcategories organized into 23 main categories. “Ambiguity in understanding Iranian financial reporting standards” emerged as the core category. Six causal categories were identified: textual and structural characteristics of financial reporting standards, technical characteristics and the need for professional judgment, users’ perceptual and cognitive capacities, transaction complexity and standard dynamics, translation challenges, and weaknesses in professional education and development. Contextual conditions comprised economic and political factors, organizational infrastructure weaknesses, localization and convergence of standards, and legal and institutional factors. Access to knowledge and interpretive resources, organizational support and learning culture, and human capital and professional participation constituted the intervening conditions. Identified responses included cognitive, interactive, professional-judgment, and information- and technology-based strategies. The resulting consequences occurred at interpretive and implementation, accounting and reporting, professional, organizational, economic, and legal levels. Ambiguity in understanding Iranian financial reporting standards is a multidimensional and interactive phenomenon arising from the interplay among characteristics of the standards, users’ cognitive and professional capacities, and the broader organizational, economic, legal, and institutional environment. Accordingly, its effective management requires an integrated approach involving clearer standards, stronger professional education, accessible interpretive guidance, improved organizational infrastructure, and enhanced professional interaction and judgment.