Board Gender Diversity and Going Concern Audit Opinions
Larelle Law Chapple
QUT School of Business; Australian National University - School of Accounting and BIS; Financial Research Network (FIRN)
University of Queensland - Business School
Bond University - Accounting
January 3, 2012
2012 Financial Markets & Corporate Governance Conference
This paper examines the relation between gender diversity on the board of directors and the likelihood that a company receives an emphasis of matter going concern audit opinion. Gender diversity on the board and the audit committee is examined. We find that, after controlling for the strength of corporate governance and relevant financial characteristics, boards with at least one female director are less likely to receive an emphasis of matter going concern opinion. We attribute this result to the improved monitoring that the board is able to provide as a result of the qualities brought to bear by female directors. In regard to the audit committee, we find that the presence of a committee is associated with an increased likelihood of an emphasis of matter going concern opinion and that this relation is strengthened by the existence of a female audit committee member. This finding is indicative of the important role of the audit committee in relation to the integrity of financial reporting and that the existence of female members on the committee expectation enhances its operation.
Number of Pages in PDF File: 31
Keywords: corporate governance, going concern, inherent uncertainty, board composition, gender diversity
JEL Classification: M40, M48working papers series
Date posted: January 4, 2012 ; Last revised: October 2, 2012
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