Women Involved in the Financial Reporting Process and Financial Reporting Quality

38 Pages Posted: 31 Jul 2017

See all articles by Isabelle Allemand

Isabelle Allemand

Université de Bourgogne - Burgundy School of Business

Paul André

HEC Lausanne

Benedicte Brullebaut

Université de Bourgogne - Burgundy School of Business

Alain Schatt

University of Lausanne, HEC-Lausanne; Université de Bourgogne - Finance

Date Written: July 26, 2017

Abstract

We examine how the presence of women involved in the financial reporting process of public companies, and especially the interactions between them (i.e. the simultaneous presence of a woman CFO, women sitting on the audit committee, and women auditors), impacts financial reporting quality. For our sample of large French companies, we find that women do not affect financial reporting quality when interactions are not considered. However, the interactions between women involved in the financial reporting are associated with lower discretionary accruals and higher C-scores (our measure of conservatism), as expected because women are generally more risk averse and have greater ethical sensitivity. Furthermore, our result holds only for non-family firms, which is also expected because there is a greater demand for earnings quality in such firms. In addition, it appears that woman CFOs play a key role in these interactions. Overall, our results support the idea that women affect positively financial reporting quality only if several women are involved at various stages of the financial reporting process and only in specific contexts (i.e. non-family firms). These new results should be of great interest for researchers, investors and regulators.

Keywords: Financial reporting, Women, CFO, Audit committee, External auditor, Family firms, France

JEL Classification: M14, M40, G32, G34

Suggested Citation

Allemand, Isabelle and Andre, Paul and Brullebaut, Benedicte and Schatt, Alain and Schatt, Alain, Women Involved in the Financial Reporting Process and Financial Reporting Quality (July 26, 2017). Available at SSRN: https://ssrn.com/abstract=3009375 or http://dx.doi.org/10.2139/ssrn.3009375

Isabelle Allemand

Université de Bourgogne - Burgundy School of Business ( email )

29 rue Sambin
Dijon, 21006
France

Paul Andre

HEC Lausanne ( email )

UNIL-Dorigny
Anthropole
Lausanne, 1015
Switzerland

Benedicte Brullebaut

Université de Bourgogne - Burgundy School of Business ( email )

29 rue Sambin
Dijon, 21006
France

Alain Schatt (Contact Author)

Université de Bourgogne - Finance ( email )

United States

University of Lausanne, HEC-Lausanne ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland

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