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Audit committee effectiveness and internal control weaknesses: Does the gender of audit committee members matter?
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Mohammad Khorashadi *   , Mohammad Ali Moradi , Ali Payan |
| Ph.D. Student., Department of Accounting, Faculty of Human Sciences, Islamic Azad University, Zahedan , Iran. |
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Abstract: (676 Views) |
| The gender theory demonstrates that women have made significant contributions to the increases of firm performance and monitoring the management. This study investigates whether the gender of audit committee members as one of the elements of audit committee effectiveness is associated with internal control weaknesses. The present study uses logistic regression and the data of 662 firm-year observations from the Tehran Stock Exchange for the period from 2013 to 2018. Moreover, the validity of the research results is confirmed after controlling for endogeneity problems (using lagged independent variables and instrumental variables). After controlling for the other factors associated with internal control weaknesses, the results reveal that the presence of at least one female on audit committee is associated with the reduction in internal control weaknesses. This result is also confirmed after controlling for endogeneity problems and employed alternative measures of gender diversity. The present study is the first to provide evidence concerning the gender of audit committee members and internal control weaknesses in emerging markets and contributes to the literature on this field. Furthermore, this study has implications for Iranian supervisors and policy makers and sends positive signal about recommending or requiring gender diversity on the board and its subgroups such as audit committee. |
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| Keywords: Gender diversity, Audit committee, Corporate governance, Internal control weaknesses |
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Full-Text [PDF 472 kb]
(70 Downloads)
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Type of Study: Research |
Subject:
Auditing
Received: 2019/08/21 | Accepted: 2020/01/25 | Published: 2020/08/31
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