Audit Characteristics, Gender Diversity and Firm Performance: Evidence from a Developing Economy

Abstract

This study aims to explore the impact of audit characteristics and gender diversity on firm performance across family and non-family firms in Bangladesh. Using data of 61 non-family and 48 family firms from 2013 to 2019, this study applies system generalised method of moments approach to carry out regression analysis. Next, the consistency of results is detected by a full sample interaction analysis. In case of non-family firm, this study documents that Big4 audit firms (Big4) and female directors on board (FDR) have significant positive impact on firm performance. Conversely, audit meeting frequency (AMF) contributes negatively to the firm performance. Unfortunately, audit committee size (ACS) and audit committee independence (ACI) have no significant contribution on firm performance. In case of family firms, this study finds that ACS and ACI have significant negative impact on firm performance. Besides, Big4, AMF and FDR have no significant contribution on firm performance. It reflects that corporate governance mechanisms in family firm are not working well and even to some extent detrimental to the firm performance. It, ultimately, demands for reforms in corporate governance framework and incorporating new dimensions for family firms.

Women on boards, firm earnings management (EM) and performance nexus: does gender diversity moderate the EM–performance relationship?

“…This relationship is inconclusive because of mixed findings such as positive, negative, non-linear or no relationship. Studies that report of a positive association between gender diversity and firm performance explain it in terms of women having greater analytical skills and their ability to coordinate activities with much greater ease than men while upholding company values and strategy (Heskett, 2015;Ali et al, 2021;Meah et al, 2021;Simeonescu et al, 2021;Nyeadi et al, 2021;Awan and Raza, 2022). Those that report of negative or insignificant relationship between gender diversity and firm performance mostly adduce it to the "reduced powers of female directors on corporate boards", for example, by not making them serve on any advisory or monitoring committees (Zalata et al, 2019b), which often culminates in a weaker monitoring and advisory role (Alshirah et al, 2022;Post and Byron, 2014;Vuong, 2021;Simeonescu, 2021).…”

“…Simulation analyses undertaken by Flannery and Hankins (2013) and Zhou et al (2014) further demonstrate that the Blundell-Bond SGMM emerges as the best-performing estimator across the data sets with conditions as mentioned above. This econometric technique has also been used in several CG as well as EM studies (Meah et al, 2021;Karim et al, 2021;Munisi and Randøy, 2013;Ndu et al, 2019;Nguyen et al, 2014Nguyen et al, , 2015aWintoki et al, 2012). The two-step SGMM technique involves a system of equations in different levels, allowing the authors to treat all or some of the explanatory variables in equation ( 4) as endogenous (see also, Baum et al, 2007).…”

Do corporate governance drive firm performance? Evidence from Indonesia

“…Therefore, the scale of the audit committee by the needs of the corporate is one of the critical factors in determining the effectiveness of the implementation of supervisory duties on management behavior. Furthermore, an extensive audit committee will be able to expand the diversity of the audit committee members' points of view, competence, and experience (Meah et al, 2021;Musallam, 2020). To conclude, the large scale of the audit committee will be able to increase the firm performance (Aslam & Haron, 2020;Klein, 2002;Nawawi et al, 2020).…”

“…The gender diversity of the corporate board will positively contribute to the firm performance. According to the Agency Theory, the duties of the board are to carry out and monitor the operation activities by minimizing the agency issues (Meah et al, 2021). Therefore, women on the Board of Corporate will provide positive aspects in the corporate monitoring and operation activities since it is considered that women are more diligent and willing to make extra efforts in the monitoring process.…”

“…Furthermore, a positive association has occurred (Eluyela et al, 2018;Musallam, 2020;Puni & Anlesinya, 2020;Tanjung, 2020). Nevertheless, a negative association between CG and firm performance has been discovered (Meah et al, 2021;Suhadak et al, 2019). Meanwhile, (Al-Matari, 2022;Bansal & Sharma, 2016;Borlea et al, 2017;Fauzi et al, 2017) failed to discover a significant correlation between CG and firm performance.…”