Gender‐diverse boards and audit fees: What difference does gender quota legislation make?

Abstract

We investigate the effect of board (audit committee) gender diversity on audit fees in the French context. We also examine whether the relationship between the proportion of female directors and audit fees is moderated by the enactment of the gender quota law in 2011. We use the system GMM estimation approach on a matched sample of French firms listed in the SBF 120 index between 2002 and 2017. Consistent with the supply‐side perspective, we contend that female independent directors and female audit committee members, by improving board monitoring effectiveness, affect the auditor's assessment of audit risk, resulting in lower audit fees. Our findings also document that, by breaking the glass ceiling, the effectiveness of the gender quota law lies not in increasing the proportion of female insider directors, but in boosting the appointment of female independent directors and female audit committee members. Using the difference‐in‐difference approach, our results reveal that female independent directors and female audit committee members are more willing to assert their monitoring skills after the quota law, leading to lower audit fees. Moving beyond tokenism, we show that, after the quota law, the negative impact on non‐audit fees is strengthened only for female independent directors.

Audit Committee Effectiveness and Audit Fee among Listed Deposit Money Banks in Nigeria

“…The result conforms to the arguments of [45] as he stated that women do have better communicative skills and capabilities within and among different groups. The result also corroborates with the findings of [48,24,52] and [15] as they revealed in their studies that the presence of a mixed audit committee team (that is, mixture of both men and women) usually demands higher audit services from the external auditor thereby increasing the amount of audit fee. The result contradicts the findings of [46,47,24] and [13] where they revealed that the presence of women on audit committee structure would improve internal control and monitoring of management, reduce audit risk, thereby leading to reduction in audit fee.…”

“…The size of the bank can influence the amount an auditor would charge for providing audit service to its client because a bank with a large volume of transactions, receivables and customers scattered around the globe, can cause the work of the auditor to be rigorous, take more time to trace all the transactions, thereby resulting to more audit effort and time. This can subsequently lead to higher audit fee [33,4,28,47,1] and [52]. The bank size was measured through the natural logarithm of the sample banks.…”

Nexus Between Governance and Socioeconomic Factors on Public Service Fragility in Asian Economies

“…Oseni (2016) and Ullah, Pervaiz, and Zaefarian (2017) also observed that GMM controls the autocorrelation in the first and second differentiation and analyzed the more effective results in panel data study. For more refinement of the analysis, the Hansen and Sargan test was applied, which examines the reliability of the instrument and controls the overidentifying restrictions in the analysis (Jara et al, 2018;Nekhili et al, 2020).…”

Audit committee quality indices, reporting quality and firm value

“…Subsequently, an effective AC is more likely to prevent management from making intentional or unintentional mistakes resulting in misleading stakeholders about firm economic performance (Dhaliwal et al., 2010). The literature also shows that AC financial expertise, AC independence levels, the frequency of AC meetings, and AC gender diversity have a positive influence on firms’ financial statement quality and internal controls quality (e.g., see more recent work by Anderson, Christ, Johnstone, & Rittenberg, 2012; Badolato, Donelson, & Ege, 2014, Bruynseels & Cardinaels, 2014; Nekhili, Gull, Chtioui, & Radhouane, 2019). Note that Appendix A summarises the key AC requirements as required by regulation (SOX), and highlights the key literature and findings.…”