Since 2022, the disclosure of Key Audit Matters (KAMs) in the auditor’s report has become mandatory in Iran. This study empirically examines whether the implementation of KAM disclosures in audit reports affects managers’ financial reporting behavior. It is expected that increased transparency through KAM disclosures enhances accountability pressure and, consequently, reduces managers’ propensity toward aggressive financial reporting, thereby improving reporting quality. The study also investigates whether the informational precision of KAM disclosures moderates the effect of KAM presence on reporting behavior. A 3×1 between-subject experimental design was employed. The dependent variable is the amount of goodwill impairment loss recognized, and the independent variable is KAM disclosure, manipulated at three levels: company-specific disclosure, non–company-specific disclosure, and no disclosure. The statistical population consists of accounting professionals, and participants were selected using an accessibility-based sampling approach. Data were collected in the summer of 2025. The final sample includes 120 participants, evenly distributed across three groups. The findings indicate that managers’ tendency to make aggressive financial reporting decisions decreases when KAMs are disclosed. Moreover, greater informational precision in KAM disclosures strengthens their constraining effect on aggressive decision-making. Overall, the results suggest that KAM disclosure significantly improves financial reporting quality. These findings contribute to ongoing debates regarding the value relevance of the expanded auditor’s report and extend the literature by focusing on the behavioral consequences of KAM disclosures for managers, whereas prior research has predominantly emphasized the reactions of financial statement users.