Since 2023 and in accordance with the new Auditing Standard No. 701, audit reports have included a new section titled Key Audit Matters (KAMs), introduced to enhance transparency in audit reporting. Achieving transparency requires that audit reports be understandable and readable. Therefore, the purpose of this study is to examine the effect of audit firm characteristics on the readability of Key Audit Matters. Data were collected from 230 companies listed on the Tehran Stock Exchange (460 firm‑year observations) during the period 2023–2024. The research hypotheses were tested using panel data analysis. The findings, using the Flesch Readability Index to measure the readability of KAMs, indicate that audit firm size, audit firm tenure, auditor change, and auditor industry specialization have a positive and significant effect on the readability of Key Audit Matters. However, audit report lag, busy season, and gender diversity among audit firm partners have no significant impact. Robustness tests using alternative readability indicators (such as document length and number of pages) confirmed the results. This is particularly important in less developed markets such as Iran, where limited research has been conducted. The study’s theoretical contribution lies in confirming and extending the literature on how audit firm characteristics affect the readability of KAMs, while also providing practical guidance for companies, auditors, and policymakers to improve transparency and financial reporting quality. The use of multiple readability indicators further strengthens the robustness of the findings and enhances their practical applicability.