Is there a gender effect on the quality of audit services?

Female Audit Partners and Extended Audit Reporting: UK Evidence

“…Female audit partners thus perceive and report relatively more potential risks than male do, supporting the gender effect evidence reported in prior audit partner studies (e.g. Breesch and Branson 2009;Garcia-Blandon et al 2019;Hardies et al 2015;Ittonen et al 2013). While the estimation results of number of KAMs deem not economically significant, there is a need to consider that the maximum number of KAMs is relatively limited.…”

“…Managers thus often use an optimistic tone when litigation risk is low and when they have greater strategic reporting incentives (Davis and Tama-Sweet 2012), though García-Sánchez et al (2019) found female directors lowering their optimistic tone in sustainability reporting to increase their credibility. As audit partners are personally accountable for audit reports and auditor signatures have been mandated (Garcia-Blandon et al 2019), the implication is that women's risk-averse attitude, conservatism, and overestimation of responsibilities suggest they use less optimistic language in EARs (a proposal risk aversion theory supports), but this needs exploring. As such, hypothesis 2a is as follows:…”

“…These findings contribute to extant research on gender diversity and current debates concerning female audit partners' auditing role. In this sense, recent auditing and financial reporting quality literature has emphasized that gender diversity can influence information asymmetries, going concern opinions, earnings management, and quality of audit services (Abbott et al 2012;Cameran et al 2018;Elamer et al 2020a, b;Fondas and Sassalos 2000;Garcia-Blandon et al 2019;Hardies et al 2016;Ittonen et al 2013).…”

“…Recent research (e.g. Ben-Amar et al 2017;Bravo and Alcaide-Ruiz 2019;Elamer et al 2019Elamer et al , 2020aElmagrhi et al 2019;Garcia-Blandon et al 2019;Knechel et al 2015;Sierra-Garcia et al 2019) has emphasized that personal attributes such as gender diversity can have a significant consequence on the audit quality and financial reporting. In this respect, our results add to this stream of research as we documented that auditor gender plays a significant role in driving audit reporting, thus helping academics, regulators and policymakers better evaluate the audit reporting style of audit partners.…”

“…Additionally, female auditors are less overconfident (Ittonen and Peni 2012) compared with their male counterparts, who may underestimate audit engagement risks and fail to assess their clients properly (Garcia-Blandon et al 2019;Nekhili et al 2018;Hardies et al 2015;Owhoso and Weickgenannt 2009). Female auditors are also more effective in information processing (Chung and Monroe 2001) and audit judgements (O'Donnell and Johnson 2001).…”