<p>This study examines the reciprocal relationship between audit managers’ leadership styles and dysfunctional audit behavior among auditors in Iranian audit firms. Dysfunctional audit behavior refers to practices that deviate from professional standards and may compromise audit quality. Using a descriptive survey design, data were collected from auditors employed in audit firms characterized by a clear managerial hierarchy. Structural equation modeling (SEM) was employed to examine the effects of four leadership styles—transformational, transactional, laissez-faire, and authoritarian—on dysfunctional audit behavior, as well as the reciprocal influence of such behavior on leadership styles. The results indicate that transformational, transactional, and laissez-faire leadership styles are negatively associated with dysfunctional audit behavior, suggesting that participative and adaptive leadership approaches can mitigate unethical audit practices. In contrast, authoritarian leadership is found to be positively associated with dysfunctional audit behavior, implying that rigid control and limited autonomy may intensify behavioral strain among auditors. Moreover, the findings provide evidence of reciprocal effects, showing that higher levels of dysfunctional audit behavior influence the enactment of certain leadership styles, particularly transactional and laissez-faire leadership. This study contributes to the literature by adopting a reciprocal perspective on leadership and dysfunctional audit behavior, moving beyond the predominantly one-directional approaches of prior research. By providing empirical evidence from Iranian audit firms—an underexplored regulatory and cultural context—the study enhances understanding of leadership–behavior dynamics in emerging audit environments. The findings offer practical implications for audit firm governance and leadership development, emphasizing the role of ethical, adaptive, and participative leadership in improving audit quality.</p>