Mehdi Zolfaghari 1 ,* , Iraj Shirinpour 1 1 Department of Accounting, Someh Sara Branch, Islamic Azad University, Someh Sara, Iran; zolfaghari.mhd@gmail.com ; shirinpoor.irj@gmail.com . Received: 11 April 2026 Zolfaghari, M., & Shirinpour , I . ( 2026 ). Revised: 21 June 2026 CSR Accepted: 23 September 2026 . Accounting and Auditing with Application , 3 ( 4 ), 283 - 296 .
The main objective of this study is to examine the relationship between (CSR) and financial performance, considering the interactive role of Audit Committee Expertise ( ACE) , in companies listed on the Tehran Stock Exchange. In this study, CSR and ACE are considered independent variables, while financial performance is considered the dependent variable. To this end, 145 companies listed on the Tehran Stock Exchange were examined over the period from 2019 to 2024. After selecting the sample and collecti ng the required data, the research variables were calculated. Finally, the Chow and Hausman tests were employed to analyze the data and test the research hypotheses. The results of the hypothesis tests indicated that CSR has a direct and significant relationship with financial performance. The results of the second hypothesis showed that CSR does not have a significant relationship with financial performance in companies with highly specialized audit committees. In other words, due to the absence of a significant relationship between ACE ACE also neutralizes the direct CSR .
, Audit committee expertise , .
Corporate Social Responsibility (CSR) has become an important component of business strategy in recent years. Researchers and business practitioners have increasingly focused on the relationship between CSR and financial success in emerging countries. CSR UHIHUVWRDEXVLQHVV·VFRPPLWPHQWWRFRQGXFWLQJLWVRSHUDWLRQV in a socially and environmentally responsible manner. This indicates that, in addition to generating profits, a business also considers its impact on various stakeholders and society. Scholars have extensively examined the impact of CSR on business success, with mixed results. The relationship between CSR and financial performance varies depending on the context and industry. Empirical evidence and theoretical foundations Corresponding Author: zolfaghari.mhd@gmail.com 10.22105/aaa.v3i4.111 Licensee System Analytics . This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0).
« suggest that CSR and financial outcomes may be positively correlated in developing economies. However, it is essential to recognize that the impact of CSR on financial performance is complex and may not always be immediately or clearly observable. This is because it often involves intangible outcomes and long - term strategic considerations. Observational data from emerging economies have provided insights into the correlation between CSR and financial outcomes. However, conflicting claims have been made rega rding these outcomes. Some studies have identified a favorable correlation. Companies that allocate resources to CSR initiatives, such as community development programs or environmentally sustainable practices, achieve better financial performance than the ir peers.
Furthermore, the implementation of CSR policies can help companies operating in emerging markets mitigate potential risks associated with environmental and social concerns. As Frederiksen [1] stated, this, in turn, can enhance their financial stability and ability to withstand challenges. According to previous studies, companies with strong CSR performance may have an advantage in obtaining capital and financing on more favorable terms. Invest ors have greater confidence in these companies because they perceive them as being less risky.
Consumers in developing markets are becoming increasingly aware of social and environmental issues. Companies that align themselves with these priorities through CSR initiatives may attract more customers, resulting in increased sales and revenues. In developing markets, regulatory authorities may encourage or mandate CSR practices. Companies that comply with such regulations may benefit from specific advantages, such as tax exemptions or government contracts.
However, CSR may lead to lower financial performance for early adopters due to the absence of a robust system for measuring and reporting the benefits of sustainability reporting and disclosure. Moreover, heavy investment in CSR activities may divert resou rces away from core business activities. Cavaco and Crifo [2] argue that engaging in CSR activities that satisfy one stakeholder group may dissatisfy another group and potentially harm financial performance. Companies operating in developing markets may engage in CSR activities merely to comply with social expectati ons and government regulations rather than as part of a strategic business decision. Empirical evidence in the literature supports these arguments.
In addition, there are factors that affect the relationship between CSR and financial performance. The audit committee is an important factor that has received relatively less attention. The audit committee is responsible IRU RYHUVHHLQJ D FRPSDQ\·V ILQDQFL al reporting, internal controls, and risk management. Therefore, for effective corporate governance, the expertise of audit committee members is of great importance. This study examines the relationship between CSR and corporate financial performance in th e Iranian capital market. In addition, it investigates how the experience of audit committee members alters the relationship between CSR and business performance in developing markets. The objective of this study is to determine whether the experience of audit committee members moderates the relationship between CSR and corporate financial 7KLVVWXG\HPSOR\VYDULRXVUHJUHVVLRQDQDO\VHVWRDVVHVVWKHPRGHUDWLQJHIIHFWRIDXGLWFRPPLWWHHPHPEHUV· expertise on the relationship between CSR and corporate financial performance. By focusing on developing markets, particularly within the distinctive context of regions such as Iran, the findings of this study contribute to the existing literature on CSR and corporate performance. Although the impact of CSR on business performance in developed economies has been extensively examined, our research addre sses a significant knowledge gap by investigating how it affects developing markets. Understanding the relationship between CSR and corporate performance in these contexts is crucial because they present both opportunities and challenges for businesses see king to implement CSR practices. Furthermore, our findings have practical implications for businesses operating in developing regions. We emphasize the value of having audit committee members who possess the necessary skills and are capable of addressing t he complexities associated with measuring and reporting CSR. Our research enables businesses to understand how CSR affects their bottom line, communicate CSR strategically, and benefit from the rewards of their efforts. The knowledge gained from our study can be utilized by policymakers to develop regulations that encourage CSR in emerging economies. Our research emphasizes the importance of appointing audit committee members Zolfaghari and Shirinpour | Acc. Aud. Appl.
3 ( 4 ) ( 2026 ) 283 - 2 96 with specialized knowledge and calls upon policymakers to consider such expertise as a critical factor in overseeing and promoting CSR practices within their regulatory frameworks. The relationship between the audit committee and CSR has received increasing attention in recent years. $XGLWFRPPLWWHHVDUHUHVSRQVLEOHIRURYHUVHHLQJDFRPSDQ\·VILQDQFLDOUHSRUWLQJDQGGLVFORVXUHDQGSOD\D key role in ensuring that the company complies with legal and regulatory requirements. Accordingly, audit FRPPLWWHHPHPEHUV·H[SHUWLVHLVEHOLHYHGWREHDPDMRUIDFWRULQSURPRWLQJVXVWDLQDEOHSHUIRUPDQFHDQG disclosure within a company. By providing oversight and guidance regarding social and environ mental risks and opportunities, audit committee members with greater expertise can help ensure that companies manage their CSR activities effectively and responsibly.
Studies have found a positive relationship between Audit Committee Expertise (ACE) and CSR. For example, a study by Mohammadi et al. [3] found that audit committee financial expertise had a positive effect on CSR performance in Iranian companies during 2012 ² 2018. The authors argued that audit committee members with greater expertise are better able to identify and monitor social and enviro nmental risks and opportunities, which can lead to improved CSR performance. They also argued that other audit committee characteristics, such as size and independence, may affect CSR.
Similarly, a study by Dwekat et al. [4] found that ACE had a positive effect on CSR disclosure for a sample of European companies listed on the STOXX 600 Index during 2012 ² 2018. The authors suggested that audit committee members with greater expertise are better able to understand the importanc e of CSR disclosure and can work more effectively with management to ensure that the company discloses accurate and relevant information regarding its CSR activities. In contrast, Bualay and Al - Ajmi [5] reported a negative relationship between audit committee financial expertise and sustainability reporting in banks in the Gulf Cooperation Council (GCC) countries between 2013 and 2017. This suggests that, within the context of the GCC countries during th at period, having a higher level of financial expertise on the audit committee may not have resulted in increased sustainability reporting by banks.
Although the concept of CSR has been widely discussed in theory and practice, there is still no universally accepted conceptual definition of it. In the classification of CSR components, three dimensions , economic, social, and environmental , have been identified. The measurement of CSR can be conducted in three areas: The interests of shareholders and employees, the interests of society and the public, and environmental considerations. In terms of the interests of shareholders and employees, improved financial performance, reduced operating costs, enhancement of the company ·VQDPHDQGUHSXWDWLRQLQFUHDVHGVDOHVDQGFXVWRPHU trust, greater productivity and higher quality, reduced need for new regulations, access to capital, improved product safety, and reduced need for new guarantees are considered as criteria.
Regarding the interests of society and the public, participation in charitable activities, provision of voluntary employee programs, public participation in general education, employment and programs supporting homeless people, and product safety and quali ty are taken into consideration. With regard to environmental considerations, increased recycling of materials, greater product functionality and durability, greater use of renewable resources, and the application of environmental management tools in busin ess plans , including life - cycle and cost assessments and environmental management standards , are used as indicators of corporate responsibility. In this regard, senior corporate managers, through the participation of human and financial resources and through negotiation and reaching common outcomes with other components of civil society, such as n on - governmental organizations, the United Nations, and local and regional governments, can play an important role in implementing organizational social responsibility strategies.
On the other hand, measuring market performance in the decision - making process is one of the most important issues in the field of financial economics; therefore, the application of financial and market measures to evaluate corporate performance is essenti al. In competitive environments, managers should use the performance measurement process to consciously guide operations appropriately toward progress and in DFFRUGDQFHZLWKWKHRUJDQL]DWLRQ·VLQWHQGHGREMHFWLYHVDQGVWUDWHJLHV [6] . Corporate social accountability and adherence to business social ethics generate positive signals in society, directing public opinion, particularly « LQYHVWRUVWRZDUGWKHFRPSDQ\8QGHUVXFKFLUFXPVWDQFHVWKHFRPSDQ\·VVKDUHYDOXHLQFUHDVHVLQWKHPDUNHW DQGVKDUHKROGHUV·ZHDOWKLVPD[LPL]HG7KHUHIRUHWKHILUVWK\SRWKHVLVRIRXUVWXG\H[DPLQHVWKHHIIHFWRI CSR on financial performance. In line with the main hypothesis of the study, we intend to examine the effect of ACE on financial performance through CSR . Accordingly, the second hypothesis of our study examines the moderating role of ACE in the relationship between CSR
Li et al. [7] LQDVWXG\HQWLWOHG´ CSR and financial performance in a cross - country context : A meta - analysis µ analyzed 223 studies from different countries and found that the relationship between CSR and corporate financial performance is generally positive and significant. This relationship is more evident in developing economies, weaker financial markets, and countries with stronger voluntary CSR disclosure.
Husein [8] LQDVWXG\HQWLWOHG´ CSR : Reflections on the U.S. technology industry µH[DPLQHGWHFKQRORJ\FRPSDQLHVOLVWHGRQWKH1$6'$4DQGFRQFOXGHGWKDW CSR has a positive and significant effect on accounting performance but a negative effect on market performance. Among the dimensions of CSR, the environmental and governance pilla rs had positive effects, whereas the social pillar had a negative effect on accounting performance.
Lin et al. [9] LQDVWXG\HQWLWOHG´ the long - term impact of CSR on : Evidence from emerging markets µ XVLQJ GDWD IURP FRPSDQLHV LQ HPHUJLQJ PDUNHWV IRXQG WKDW &65 KDV D SRVLWLYH DQG significant effect on long - term financial performance. This effect was stronger in companies with consistent and sustainable CSR strategies. Phan et al. [10] LQWKHLUVWXG\HQWLWOHG´ disruptive and incremental innovations as mediators in the CSR ² financial performance relationship (YLGHQFHIURP9LHWQDPµGHPRQVWUDWHGWKDWGLVUXSWLYHLQQRYDWLRQSOD\V a strong mediating role in the relationship between CSR and financial performance. Furthermore, the effect of CSR on incremental innovation is stronger in state - owned enterprises.
Wijesiri et al. [11] , in a study HQWLWOHG´H[DPLQLQJWKHUHODWLRQVKLSEHWZHHQ CSR and financial performance in social ente rprises: The mediating role of productivity µDQDO\]HGGDWDIURPPLFURILQDQFHLQVWLWXWLRQVLQ/DWLQ America and found that productivity plays an important mediating role in translating CSR into sustainable financial outcomes. These findings indicate that CSR can simultaneously promote economic and social objectives.
Kaleem et al. [12] LQDVWXG\HQWLWOHG´ CSR and the role of artificial intelligence in improving CSR and financial outcomes µGHPRQVWUDWHGWKDWWKHXVHRI artificial intelligence in CSR implementation can increase its effectiveness and efficiency and generate higher financial returns compared with traditional CSR techniques. The study highlights the role of artificial intellig ence in ESG monitoring, risk analysis, and enhancing investor confidence.
Seyfideli and FarhadTouski [13] LQDVWXG\HQWLWOHG´ examining the impact of social responsibility on financial performance, financial stability, and financial inclusion in Iranian commercial banks µ IRXQG WKDW VRFLDO responsibility has a positive and significant effect on financial performance, financial stability, and financial inclusion. In other words, increasing social responsibility activities can lead to improved profitability, reduced risk, and the expansion of banking services within society.
Salehi et al. [14] LQDVWXG\HQWLWOHG´ examining the relationship between social responsibility and cash flows in companies listed on the 7HKUDQ6WRFN([FKDQJHµFRQFOXGHGWKDWDOWKRXJKFRPSDQLHVHQJDJHLQVRFLDO activities, no significant relationship was observed between the level of social responsibility and cash flows. This finding highlights the need for greater attention to how CSR act ivities are implemented and how their financial returns are measured.
Meviani and Syafruddin [15] LQDVWXG\HQWLWOHG´ the impact of social responsibility on financial performance with audit quality as a moderation variabl e in Indonesia µFRQFOXGHGWKDW CSR has a positive and significant Zolfaghari and Shirinpour | Acc. Aud. Appl. 3 ( 4 ) ( 2026 ) 283 - 2 96 effect on financial performance and that audit quality plays an effective mediating role in this relationship.
Thus, companies with higher audit quality derive greater financial benefits from CSR . Fakhari and Fallahpour [16] LQDVWXG\HQWLWOHG´ examining the mediating effect of financial performance on the relationship between social responsibility and market value added in companies listed on the Tehran Stock Exchange µIRXQGWKDWUHWXUQRQDVVHWVDQG7RELQ·V4UDWLRDVLQGLFDWRUVRIILQDQFLDOSHUIRUPDQFHPHGLDWH the relationship between social responsibility and market value. This means that stronger financial performance can enhance the effect of social activities on firm value.
Aghaie Chadeghani et al. [17] , in a study HQWLWOHG´ the effect of corporate social responsibility and managerial ability on firm value considering the role of profitability in companies listed in the Tehran Stock Exchange µ demonstrated that CSR and managerial ability have a positive and significant effect on firm value. In other words, an increase in CSR and managerial ability leads to an increase in firm value. In addition, the results indicate that profitability strengthens the relationship between CSR and managerial ability and firm value.
Rostami et al. [18] LQDVWXG\HQWLWOHG´ Investigating the moderating role of ownership concentration on the relationship between corporate social responsibility performance and information asymmetry in companies listed on the Tehran Stock Exchange µIRXQGEDVHGRQWKHUHVXOWVRIWKHILUVWK\SRWKHVLVWKDWWKHUHLVD significant relationship between CSR performance and information asymmetry. The results of the second hypothesis indicated that the ownership structure weakens the negative relationship between CSR performance and information asymmetry.
H1: There is a significant relationship between CSR H2: There is a significant relationship between CSR and financial performance in companies with highly specialized audit committees.
This study employs an applied research design and uses a quantitative approach to investigate the relationship between CSR and financial performance, with particular emphasis on the moderating role of ACE . The statistical population consists of companies listed on the Tehran Stock Exchange. The study covers the period from 2019 to 2024. The sample was selected from the population based on predefined selection criteria and data availability. After applying the relevant criteria and excluding companies with insufficient or incomplete information, a final sample of 145 companies was obtained . Accordingly, the study analyzes the observations of these companies over the six - year study period using panel data techniques.
All companies listed on the Tehran Stock Exchange constitute the statistical population of the present study, and the proposed hypotheses will be examined and tested in relation to this population. Due to the large size of the statistical population and th e existence of certain inconsistencies among its members, the following criteria were established for selecting the statistical sample. Accordingly, the sample was selected using systematic elimination. The criteria are as follows: The companies must have been listed on the stock exchange before 2019 and their shares must have been traded on the stock exchange from the beginning of 2019.
The companies must not have experienced operational interruptions during the years 2019 - 2024, and their fiscal year must have ended on March 20 in order to enhance comparability. The companies must not have changed their fiscal year during these years, and the required information must have been available for data extraction. The companies must not belong to banks and financial institutions, investment and intermediary companies, holding companies, or leasing companies, because the disclosure of their corporate governance structures differs. In addition, the companies must have been profitable.
Based on the aforementioned criteria, 145 companies were selected as the systematic and purposive sample for the period from 2019 - 2024. «
The following models are used to test the hypotheses: Model 1: ROA it = b0 b1CSRit + b2SIZEit + b3AGEit + b4LEVit+ b5DIVit+b6LIQit + b7SGi +vit . (1) Model 2: ROAit = b0+b1CSRit + b2ACEit + b3(CSRit × ACEit)+ b4SIZEit + b5AGEit+ ( 2 ) b6LEVit+ b7DIVit+b8LIQit + b9SGi + vit . In these models, ROA represents financial performance, SIZE represents firm size, AGE represents firm age, ',9UHSUHVHQWVHDUQLQJVSHUVKDUH6*UHSUHVHQWVWKHSHUFHQWDJHJURZWKLQWKHILUP·VVDOHV&65UHSUHVHQWV CSR , LEV represents financial leverage, LIQ represents liquidity, ACE represents ACE , b0 represents the constant term, b1 to ... represent the parameters associated with the control variables, the subscript i denotes the firm number, and the subscript t indicates the time period under study. The symbol vit is used to denote the random err or term conventionally used in regression models.
3.2.1| Dependent variable ROA ( ): Return on assets is calculated by dividing net income by total assets. 3.2.2| Independent Variables In this study, CSR LVPHDVXUHGXVLQJWKHLQGLFDWRUVRIWKHVRFLDOLPSDFWVRIWKHFRPSDQ\·VDFWLYLWLHVVRFLDO FRPPLWPHQWVDQGWKHFRPSDQ\·VVRFLDOEHQHILWV,QWKLVVWXG\IROORZLQJ Su et al. [19] , CSR is measured using WKHLQGLFDWRUVRIWKHVRFLDOLPSDFWVRIWKHFRPSDQ\·VDFWLYLWLHVVRFLDOFRPPLWPHQWVDQGVRFLDOEHQHILWVDV expressed in the following relationship: CSRi =Csociety + Cenvironment + CLeverage .
CSRi: Represents the CSR of firm i. Csociety: Represents the social impacts of the activities of firm i, which is calculated using the following formula: &VRFLHW\ î ï> operating cash flow of firm Lî net income of firm i) / total assets of firm i] Cenvironment : Represents the social commitments of firm i, which is calculated using the following formula: Cenvironment: total assets of firm i /( total value of shares of firm i + total cash and cash equivalents of firm i)
CLeverage: Represents the social benefits of firm i, which is calculated as follows: CLeverage: Total value of shares of firm i / ( short - term liabilities of firm i + long - term liabilities of fir m i) ACE represents ACE . Accordingly, if the audit committee has at least one member with financial expertise, it is assigned a value of 1; otherwise, it is assigned a value of 0.
Firm Size: The natural logarithm of total assets at the end of the fiscal year. leverage : In this study, financial leverage refers to the ratio of total liabilities to total assets. Earnings per share : In this study, earnings per share refers to the logarithm of earnings paid per share. Liquidity: In this study, liquidity refers to the ratio of current assets to current liabilities. Firm age : In this study, firm age refers to the number of years from the establishment of the company to the year of the study.
Sales growth : Sales growth is calculated as the GLIIHUHQFHEHWZHHQWKHILUP·V VDOHVLQ\HDUWDQG\HDUWî divided by sales in year t î 1 : Zolfaghari and Shirinpour | Acc. Aud. Appl. 3 ( 4 ) ( 2026 ) 283 - 2 96 ? ? ? ? ? ? ? ? ? ? The coefficient b1 in the first model and the coefficient b3 in the second model indicate whether each hypothesis is supported or rejected.
The following table presents the descriptive statistics of the research variables over the study period. The descriptive statistics of the research variables, which were measured using company data during the test period, include the mean, median, standard deviation, minimum, and maximum values ( Table 1 ) . Table 1. Descriptive statistics of research variables. Variable Description Mean Median S.D Min Max Skewness Kurtosis Firm Age Age 1.191 1.230 0.235 0.301 1.690 - 0.319 3.071 CSR 2.900 2.005 2.152 1.259 9.584 1.018 4.213 CSR*ACE 1.210 0.000 1.889 0.000 7.488 0.796 3.059 in companies with highly specialized audit committees Dividend DIV 1.977 2.352 1.157 0.000 3.813 - 0.773 2.155 Audit committee expertise ACE 0.214 0.000 0.365 0.000 1.000 0.057 1.003 leverage LEV 0.624 0.609 0.256 0.1145 0.935 0.487 2.956 Liquidity LIQ 1.222 1.081 0.713 0.340 3.284 1.375 4.709 Return on assets ROA 0.306 0.365 0.123 - 0.250 0.950 - 1.756 5.219 Sales growth SG 0.135 0.112 0.305 - 0.393 0.825 0.442 2.871 Firm size SIZE 6.010 5.589 0.738 4.686 8.058 0.849 3.417 For example, for the leverage variable, the mean, median, standard deviation, minimum, maximum, skewness, and kurtosis are 0.624, 0.609, 0.256, 0.1145, 1.235, 0.487, and 2.956, respectively. Since the mean leverage is greater than the median leverage, the distribution of leverage among the statistical sample is right - skewed.
This can also be observed from the positive value of the skewness coefficient .
The following table presents the degree of correlation among the main research variables. Positive coefficients indicate positive correlations between the respective variables, and vice versa. For example, the correlation coefficient between firm size and sales growth is 0.070, whereas the correlation coefficient between leverage DQG ILUP VL]H LV î 6LPLODUO\ WKH FRUUHODWLRQ FRHIILFLHQWV DQG WKHLU VLJQLILFDQFH OHYHOV IRU WKH RWKHU variables can be observed in the Table 2 .
Table 2 . Descriptive statistics and skewness of the leverage variable. Age ACE DIV CSR*ACE CSR SG ROA LIQ LEV SIZE Age 1.000 CSR 0.173 1.000 CSR*ACE 0.053 1.000 0.174 DIV - 0.237 1.000 0.026 - 0.402 ACE - 0.081 1.000 0.281 0.623 - 0.294 LEV 0.150 - 0.265 - 0.354 0.034 0.634 1.000 LIQ - 0.040 0.122 0.152 - 0.018 - 0.327 1.000 - 0.655 ROA - 0.177 0.238 0.343 0.051 - 0.304 1.000 0.033 - 0.286 SG - 0.052 0.159 0.067 0.076 - 0.137 1.000 0.156 0.107 - 0.128 SIZE - 0.111 0.114 0.176 0.090 0.026 0.070 0.865 - 0.208 - 0.008 1.000 « If the correlation coefficient between the independent variables ranges from 0 to 0.25, the correlation is considered weak; if it ranges from 0.25 to 0.50, the correlation is considered moderate; if it ranges from 0.50 to 0.75, the correlation is considere d relatively strong; and if it ranges from 0.75 to 1.00, the correlation is considered very strong. In this table, the correlation coefficient between financial performance and firm size is 0.865, which indicates a strong correlation. However, since these two variables are not independent variables in the same model, this high correlation does not create a problem.
The F - statistic (160.69) indicates that the overall regression model is statistically significant. As shown in the lower section of the table, the coefficient of determination (R²) and the adjusted coefficient of determination (Adjusted R²) of the model ar e 0.77 and 0.76, respectively. Therefore, it can be concluded that, in the aforementioned regression equation, approximately 76% of the financial performance of the companies in the sample is explained by the independent and control variables. In Table 3 , positive (negative) values in the coefficient column indicate the direct (inverse) effect of each variable on the financial performance of the company.
Table 3 . Correlation coefficients among research variables. Variable Name Variable Coefficient t - Stat Sig. Coefficient Value Constant ? ? 0.59 2.77 0.00 CSR CSR ? ? 0.08 13.06 0.00 Firm Age Age ? ? - 0.23 - 3.07 0.00 Dividend DIV ? ? 0.06 5.61 0.00 LEV ? ? 0.12 2.02 0.04 leverage Liquidity LIQ ? ? 0.08 4.07 0.00 Sales SG ? ? 0.06 2.64 0.00 Growth Firm Size SIZE ? ? 0.89 34.00 0.00 Coefficient of 0.77 F - statistic 160.69 determination Adjusted coefficient 0.76 P - value 0.0000 of determination Durbin - Watson Statistic 1.89 Chow test : 26.69 Hausman Test: Heteroskedasticity test : Jarque ² Bera Test ( significance level : Fixed - Effects Heteroskedasticity present GLS Significance 0.00)
Panel Model Level: 0.00 The F - statistic (160.69) indicates that the overall regression model is statistically significant. As shown in the lower section of the table, the coefficient of determination (R²) and the adjusted coefficient of determination (Adjusted R²) of the model ar e 0.77 and 0.76, respectively. Therefore, it can be concluded that, in the aforementioned regression equation, approximately 76% of the financial performance of the companies in the sample is explained by the independent and control variables. In Table 3 , positive (negative) values in the coefficient column indicate the direct (inverse) effect of each variable on the financial performance of the company.
Test result: The significance level (p - value) of the CSR variable (0.00) is lower than the significance level considered in the present study (5%). Furthermore, the absolute value of the t - statistic associated with this variable (13.06) is greater than the critical t - value obtained from the table at the corresp onding degrees of freedom. Therefore, the H ? hypothesis is rejected at the 95% confidence level, and H ?
, which states that ´ there is a significant relationship between CSR DQGWKHILQDQFLDOSHUIRUPDQFHRIWKHFRPSDQ\µLVVXSSRUWHG This relationship is positive and statistically significant . Zolfaghari and Shirinpour | Acc. Aud. Appl. 3 ( 4 ) ( 2026 ) 283 - 2 96
The F - statistic (142.32) indicates that the overall regression model is statistically significant. As shown in the lower section of the table, the coefficient of determination (R²) and the adjusted coefficient of determination (Adjusted R²) for the model a re 0.77 and 0.76, respectively. Therefore, it can be concluded that approximately 76% of the financial performance of the companies under study is explained by the independent and control variables included in the regression model. In Table 4 , positive (negative) values in the coefficient column indicate the direct (inverse) effect of each variable on financial performance.
Table 4 . CSR significance test and hypothesis results. Variable Name Variable Coefficient t - Stat Sig. Coefficient Value Constant ? ? 0.60 2.84 0.00 CSR ? ? 0.08 12.47 0.00 Audit Committee Expertise ACE ? ? 0.00 0.17 0.86 (ACE) CSR in Companies with CSR*ACE ? ? 0.00 0.61 0.54 Highly Specialized Audit Committees Firm Age Age ? ? - 0.23 - 3.07 0.00 Dividend DIV ? ? 0.06 5.58 0.00 Financial Leverage LEV ?
? 0.12 1.99 0.04 Liquidity LIQ ? ? 0.08 4.11 0.00 Sales Growth SG ? ? 0.06 2.59 0.00 Firm Size SIZE ? ? 0.89 34.08 0.00 Coefficient of determination 0.77 F - statistic 142.32 Adjusted coefficient of determination 0.76 P - value 0.0000 Durbin - Watson Statistic 1.88 Coefficient of determination Hausman Heteroskedasticity test : Jarque ² Bera Test: Fixed - heteroskedasticity present Test Effects Panel (GLS)
Significance Model Level: 0.00 The F - statistic (142.32) indicates that the overall regression model is statistically significant. As shown in the lower section of the table, the coefficient of determination (R²) and the adjusted coefficient of determination (Adjusted R²) for the model a re 0.77 and 0.76, respectively. Therefore, it can be concluded that approximately 76% of the financial performance of the companies under study is explained by the independent and control variables included in the regression model. In Table 4 , positive (negative) values in the coefficient column indicate the direct (inverse) effect of each variable on financial performance.
Test result : The significance level (p - value) of the CSR variable in companies with highly specialized audit committees (0.54) is greater than the significance level considered in the present study (5%). Furthermore, the absolute value of the t - statistic for this variable (0.61) is smaller than the critical t - v alue obtained from the statistical table at the corresponding degrees of freedom. Therefore, the H ?
hypothesis is not rejected at the 95% confidence level, and H ? ZKLFKVWDWHVWKDW´ CSR in companies with highly specialized audit committees KDV D VLJQLILFDQW UHODWLRQVKLS ZLWK ILQDQFLDO SHUIRUPDQFHµ LV QRW VXSSRUWHG $FFRUGLQJO\ QR VWDWLVWLFDOO\ significant relationship is observed between CSR and financial performance in companies with highly specialized audit committees. The direct relationship between CSR and financial performance can be analyzed from several key perspectives. This relationship is generally considered positive and significant; however, it involves certain complexities of its own.
«
The purpose of this study was to investigate the relationship between CSR and financial performance and to examine whether ACE alters this relationship in companies listed on the Tehran Stock Exchange. The findings provide evidence that the relationship between CSR and financial performance is not independent of the corporate governance environment in which CSR activities are imp lemented and monitored. In particular, the results indicate that CSR is positively and significantly associated with financial performance when considered in the baseline model. However, after incorporating ACE and its interaction with CSR, the interaction term is not statistically significant. This finding suggests that the relationship between CSR and financial performance does not significantly differ according to the level of ACE in the companies examined.
The results of the first hypothesis demonstrate a positive and statistically significant relationship between CSR and financial performance. The estimated coefficient of CSR is 0.08, with a t - statistic of 13.06 and a significance level below 5%. Therefore, the hypothesis proposing a significant relationship between CSR and financial performance is supported. This finding suggests that companies that demonstrate greater commitment to social, environmental, ethical, and stakeholder - related responsibilities te nd to exhibit better financial performance. One possible explanation for this finding can be provided through stakeholder theory.
Companies that respond effectively to the interests of their stakeholders may develop stronger relationships with customers, e mployees, investors, suppliers, and other relevant groups. Such relationships can contribute to customer loyalty, employee commitment, operational efficiency, and ultimately improved financial outcomes. The finding can also be interpreted through legitimacy theory. CSR may enable firms to maintain and strengthen their legitimacy within the broader social and institutional environment. Companies that demonstrate responsible behavior may receive greater acceptance from society and other stakeholders, thereby reducing repu tational risks and potential conflicts. This improved legitimacy may create economic benefits through enhanced corporate reputation, stronger market relationships, and improved access to financial resources. In addition, responsible corporate behavior may contribute to lower perceived risk and, consequently, a reduction in financing costs. Investors may also perceive firms with stronger CSR performance as better positioned to manage social and environmental risks, which can increase their attractiveness to investors whose investment decisions incorporate environmental, social, and governance considerations.
The positive relationship between CSR and financial performance may further reflect the long - term economic benefits of responsible corporate behavior. CSR initiatives can improve employee motivation and productivity, strengthen organizational commitment, e nhance customer perceptions, and support the development of a favorable corporate image. Although some CSR activities require substantial initial expenditures, their benefits may accumulate over time and ultimately contribute to improved financial nce. Therefore, CSR should not necessarily be viewed as a purely discretionary cost; when appropriately designed and aligned with corporate objectives, it can represent a strategic investment capable of generating economic value.
The results of the second hypothesis provide a more nuanced interpretation of this relationship. Although the coefficient of CSR remains positive and statistically significant in the extended model, the coefficient of ACE is statistically insignificant, and more importantly, the interaction term between CSR and ACE is not statistically significant. The interaction coefficient is approximately zero, with a t - statistic of 0.61 and a significance level of 0.54. Consequently, there is insufficient statistical evidence to conclude that ACE significantly moderates the relationship between CSR and financial performance. In other words, the positive association observed between CSR and financial performance in the baseline model cannot be attributed to differences in ACE .
This finding may be explained by the primary responsibilities and institutional position of audit committees. ACE is generally associated with financial reporting, internal control, risk management, and oversight of the Zolfaghari and Shirinpour | Acc. Aud. Appl. 3 ( 4 ) ( 2026 ) 283 - 2 96 external and internal auditing processes. Although these functions can contribute substantially to corporate governance, they do not necessarily imply direct responsibility for the formulation, implementation, or strategic evaluation of CSR activities. Con sequently, even when an audit committee possesses a high level of financial and accounting expertise, such expertise may not be sufficient to influence the extent to which CSR activities translate into financial benefits.
Another possible explanation is the limited integration of CSR into the strategic and governance structures of companies. If CSR is treated primarily as a social or reputational activity rather than as an integral component of corporate strategy, the exper tise of the audit committee may have limited influence on its financial consequences. In such circumstances, the audit committee may concentrate primarily on traditional financial reporting and control issues, while CSR - related decisions remain under the r esponsibility of executive management or other governance bodies. Therefore, the presence of financially sophisticated audit committee members does not necessarily guarantee that CSR activities will be systematically evaluated in terms of their potential financial conseque nces.
The absence of a significant moderating effect may also be associated with the time horizon of CSR activities. Many of the economic benefits associated with CSR, including reputation enhancement, customer loyalty, employee commitment, and stakeholder trust , may materialize over a relatively long period. The annual financial performance measures used in empirical research may therefore fail to fully capture the delayed effects of CSR. This issue may be particularly relevant when CSR investments require subst antial initial expenditures while their economic returns emerge gradually. Accordingly, ACE may not appear to moderate the CSR ² financial performance relationship within the relatively short observation period examined in this study.
The correlation analysis provides additional descriptive evidence regarding the relationships among the research variables. Most of the correlations are within weak to moderate ranges, suggesting that severe linear associations among the explanatory variab les are generally not evident. Although a relatively strong correlation is observed between financial performance and firm size, these variables do not represent independent variables simultaneously entering the same explanatory role in the model; therefor e, this correlation does not in itself indicate a multicollinearity problem in the research framework. The regression results also demonstrate that the models possess substantial explanatory power. In both specifications, the coefficient of determination i s approximately 0.77 and the adjusted coefficient of determination is 0.76, indicating that approximately 76% of the variation in financial performance is explained by the variables incorporated into the models. Moreover, the statistically significant F - st atistics confirm the overall significance of the estimated regression models.
The control variables also provide some meaningful insights into the determinants of financial performance. Firm size exhibits a strong positive and statistically significant coefficient, suggesting that larger firms tend to achieve higher levels of financ ial performance within the sample. This result may reflect economies of scale, greater access to financial resources, stronger market positions, and more developed organizational capabilities. Dividend policy, liquidity, financial leverage, and sales growt h also show positive and statistically significant relationships with financial performance. These findings indicate that firms with stronger liquidity positions, higher sales growth, and particular financial and dividend characteristics may experience bet ter financial outcomes. In contrast, firm age has a negative and statistically significant coefficient, suggesting that older firms do not necessarily achieve superior financial performance. This may be related to organizational rigidity, slower adaptation to changing market conditions, or the accumulation of less efficient organizational structures over time.
Overall, the findings suggest that CSR can be an important factor associated with improved financial performance among companies listed on the Tehran Stock Exchange. However, the results do not support the assumption that ACE significantly changes this relationship. The evidence therefore points toward a distinction between the general benefits of CSR and the specific governance mechanisms through which those benefits are realized. While CSR may create economic value through s takeholder relationships, legitimacy, « reputation, and risk reduction, the expertise of audit committees , particularly when primarily focused on accounting and financial reporting , may not be sufficient to influence this value - creation process.
From a practical perspective, the findings emphasize the importance of integrating CSR into the core strategic framework of firms rather than treating it as a peripheral organizational activity. Companies may benefit from developing clear and measurable CS R objectives and linking them to operational and financial goals. The establishment of dedicated CSR units or the appointment of specialized CSR managers could facilitate the systematic planning, implementation, monitoring, and evaluation of CSR activities . In addition, transparent and continuous CSR reporting can provide investors and other stakeholders with more reliable information regarding the social and environmental consequences of corporate activities and their potential economic implications.
The findings also suggest the need for greater integration between corporate governance and sustainability management. Although audit committees play an important role in financial oversight, their effectiveness in the CSR domain may be enhanced by incorpo rating sustainability - related expertise or by establishing stronger coordination between audit committees and other governance mechanisms responsible for sustainability. The use of internationally recognized reporting and measurement frameworks, such as GR I, ESG, and SASB, together with appropriate adaptation to the institutional and economic characteristics of Iran, may also improve the comparability and reliability of CSR information.
Despite these contributions, the study has several limitations that should be considered when interpreting its findings. First, CSR was measured using the model developed by Su et al. [19] . Although this measure provides a structured approach to assessing CSR, alternative measurement frameworks may capture different dimensions of CSR and could potentially produce different empirical results. Therefore, the observed relationship between CSR and financial performance may be sensitive to the measurement approach adopted.
Second, the relatively short time series available for each firm pr evented the use of firm - level time - series regression models. Consequently, the study relies on panel - data estimation to exploit the available cross - sectional and temporal variation. Future research can address these limitations by employing alternative CSR measurement frameworks and separately examining the environmental, social, and governance dimensions of CSR. Such an approach may reveal that different dimensions of CSR have differ ent effects on financial performance. Future studies may also incorporate mediating variables such as corporate reputation, brand image, employee commitment, financial risk, cost of capital, and stakeholder engagement to provide a more comprehensive explan ation of the mechanisms through which CSR affects financial performance. In addition, researchers may employ more advanced econometric and structural approaches, including structural equation modeling, PLS - SEM, or other causal inference techniques, to inve stigate the direction and mechanisms of these relationships more rigorously.
In conclusion, the evidence from companies listed on the Tehran Stock Exchange indicates that CSR is positively and significantly associated with financial performance. However, ACE does not significantly moderate this relationship. The findings therefore suggest that the financial benefits of CSR may depend more strongly on the strategic integration and effective implementation of responsible corporate practices than on the financia l expertise of audit committee members alone. Strengthening CSR measurement, improving sustainability reporting, integrating CSR into corporate strategy, and developing governance structures with appropriate sustainability expertise may provide a more effe ctive pathway for translating responsible corporate behavior into sustainable financial value.
CS R ACE Audit Committee Expertise GCC Gulf Cooperation Council Zolfaghari and Shirinpour | Acc. Aud. Appl. 3 ( 4 ) ( 2026 ) 283 - 2 96
The authors declare no competing interests related to this study. The authors alone are responsible for the content and writing of this manuscript.
All relevant data generated or analyzed during this study are included in this published article. No supplementary datasets are available.
No external funding was received for this research. The study was conducted without financial support from any public, commercial, or non - profit funding organization.
A language model powered by artificial intelligence was used solely to support proofreading and improve the linguistic presentation of the manuscript. All research activities, including the development of the study, evaluation of evidence, interpretation o f results, and preparation of scientific content, were conducted independently of the AI tool. The author has verified the final text and is fully accountable for the content and integrity of the manuscript.
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