Risk Beyond the Balance Sheet: Coronaphobia as a Mediator of Audit Quality Under Institutional Strain

This study investigates whether pandemic-induced fear undermines auditors’ professional judgment directly or through a more debilitating psychological mechanism—coronaphobia. We surveyed 146 audit partners and senior managers in Iran during the peak of the COVID-19 pandemic, in a “meta-crisis” context characterised by international sanctions and strained healthcare. Using PLS-SEM, we traced the pathway from pandemic anxiety to perceived audit quality, testing coronaphobia as a mediating variable. Results reveal that coronaphobia mediated approximately 65% of the total adverse effect on audit quality. While general anxiety exerted a direct negative influence, its transformation into pathological fear consumed cognitive resources essential for professional scepticism and sound judgment. We advance a psychological mediation model of audit quality vulnerability, demonstrating how external shocks degrade professional judgment by targeting its human foundations. For practice, this reframes auditors’ psychological well-being as a core control objective; for research, it argues that accounting systems are only as reliable as the minds that operate them—especially during crises requiring rapid adaptation.