Audit committee gender diversity and financial reporting: evidence from restatements

Izadi, Javad ORCID: and Oradi, Javad (2019) Audit committee gender diversity and financial reporting: evidence from restatements. Managerial Auditing Journal, 35 (1). pp. 67-92. ISSN 0268-6902

[thumbnail of Izadi_Zadeh_Darjezi_and_Oradi_MAJ_2019_Audit_committee_gender_diversity_and_financial_reporting_evidence_from_restatements.pdf]
Izadi_Zadeh_Darjezi_and_Oradi_MAJ_2019_Audit_committee_gender_diversity_and_financial_reporting_evidence_from_restatements.pdf - Accepted Version

Download (864kB) | Preview


Purpose – The main purpose of this study is to investigate the association between gender diversity on audit committees and the incidence of financial restatements.
Design/methodology/approach – Using a sample of 683 firm-year observations from Iranian listed companies for the period from 2013 to 2017, this paper uses a logistic regression model to examine a research hypothesis related to the association between the presence of female directors on the audit committee and the incidence of financial restatements.
Findings – After controlling for other restatement-related factors, we found that the presence of at least one female director on audit committees reduces the likelihood of the incidence of financial restatements. Robustness tests also confirmed this result. Moreover, we found that independent and financial expert female directors on audit committees are more strongly associated with a reduction in financial restatements. Finally, our additional analysis suggests that, in firms with gender diversity on audit committees and also the presence of independent and financial expert female directors, the likelihood of hiring auditors of a higher quality increases. Generally, the findings are consistent with the literature on gender diversity which suggests that women perform better in a monitoring role, are more conservative and make more ethical decisions.
Practical implications – The findings of this study could help with the understanding of broader participation of female directors on company boards and subgroups such as the audit committee, and of the improvement in corporate governance. Moreover, the findings can be of particular interest to monitoring authorities and policy makers in developing countries and send positive signals to them regarding the recommendation or requirement of gender diversity as a part of corporate governance mechanisms.
Originality/value – The present study contributes to the extant literature by providing empirical evidence on the effect of audit committee gender diversity on financial restatements. Furthermore, this study provides evidence on the more effective oversight and greater ability of independent female directors and financial expert female directors, respectively; which has been significantly disregarded in the previous studies.

Item Type: Article
Identifier: 10.1108/MAJ-10-2018-2048
Additional Information: This is an author accepted manuscript published in Managerial Auditing Journal on 09/10/2019. The final article is available online at:
Keywords: Corporate governance, Audit committee gender diversity, Financial reporting, Restatement, Iran.
Subjects: Business and finance
Depositing User: Javad Izadi
Date Deposited: 13 Jun 2019 09:26
Last Modified: 06 Feb 2024 16:00


Downloads per month over past year

Actions (login required)

View Item View Item