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Gender Diversity in Audit Committees and the Readability of Key Audit Matters
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Mahdi Kazemioloum    , Mohsen Khotanlou * |
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Abstract: (15 Views) |
Since 2023, Auditing Standard 701 has been mandated in Iran to enhance transparency in the auditing process by requiring the inclusion of Key Audit Matters (KAM) in independent audit reports. Transparency and readability of audit reports are critical for the effective implementation of Standard 701, and corporate governance mechanisms can facilitate achieving its objectives. This study aims to investigate the impact of gender diversity in audit committees on the readability of KAM disclosures. The population consists of companies listed on the Tehran Stock Exchange, from which 219 companies were selected during the 2023–2024 period, the first two years of Standard 701 implementation. The study hypothesis was tested using multiple regression analysis and panel data. The findings, based on the Flesch readability index for assessing KAM readability, reveal that gender diversity in audit committees has a positive and significant effect on KAM readability. This result suggests that the presence of women in audit committees enhances the comprehensibility of KAM disclosures for clients. Robustness tests using supplementary indices (e.g., document length and page count) confirmed these findings. This study highlights the importance of gender diversity in corporate governance structures, particularly in audit committees. Companies can establish policies to increase women's participation in these committees, thereby not only better complying with the requirements of Auditing Standard 701 but also enhancing public trust in oversight processes and the transparency of financial reporting. This enables stakeholders better to understand the company’s financial information and key risks. Regulatory bodies can utilize these findings to promote or even mandate gender diversity in audit committees.
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| Keywords: Audit Committees, Gender Diversity, Key Audit Matters (KAM), Readability. |
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Full-Text [PDF 987 kb]
(6 Downloads)
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Type of Study: Research |
Subject:
Auditing
Received: 2026/02/23 | Accepted: 2026/07/8 | Published: 2026/09/1
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