Gender‐Diverse Boards and Audit Fees: What Difference Does Gender Quota Legislation Make?

48 Pages Posted: 27 May 2020

See all articles by Mehdi Nekhili

Mehdi Nekhili

Université du Maine; ICD International Business School; Université du Maine

Ammar Ali GULL

Ghulam Ishaq Khan Institute of Engineering Sciences and Technology

Tawhid Chtioui

affiliation not provided to SSRN

Ikram Radhouane

ICD International Business School

Date Written: January/February 2020

Abstract

We investigate the effect of board (audit committee) gender diversity on audit fees in the French context. We also examine whether the relationship between the proportion of female directors and audit fees is moderated by the enactment of the gender quota law in 2011. We use the system GMM estimation approach on a matched sample of French firms listed in the SBF 120 index between 2002 and 2017. Consistent with the supply‐side perspective, we contend that female independent directors and female audit committee members, by improving board monitoring effectiveness, affect the auditor's assessment of audit risk, resulting in lower audit fees. Our findings also document that, by breaking the glass ceiling, the effectiveness of the gender quota law lies not in increasing the proportion of female insider directors, but in boosting the appointment of female independent directors and female audit committee members. Using the difference‐in‐difference approach, our results reveal that female independent directors and female audit committee members are more willing to assert their monitoring skills after the quota law, leading to lower audit fees. Moving beyond tokenism, we show that, after the quota law, the negative impact on non‐audit fees is strengthened only for female independent directors.

Keywords: audit fees, female directors, French context, gender quota law

JEL Classification: G30, J16, M41

Suggested Citation

Nekhili, Mehdi and GULL, Ammar Ali and Chtioui, Tawhid and Radhouane, Ikram, Gender‐Diverse Boards and Audit Fees: What Difference Does Gender Quota Legislation Make? (January/February 2020). Journal of Business Finance & Accounting, Vol. 47, Issue 1-2, pp. 52-99, 2020, Available at SSRN: https://ssrn.com/abstract=3604496 or http://dx.doi.org/10.1111/jbfa.12409

Mehdi Nekhili (Contact Author)

Université du Maine ( email )

72085 Le Mans Cedex 9
France

ICD International Business School

12 rue Alexandre Parodi
Paris, 75010
France

Université du Maine ( email )

72085 Le Mans Cedex 9
France

Ammar Ali GULL

Ghulam Ishaq Khan Institute of Engineering Sciences and Technology ( email )

Topi, Khyber Pakhtunkhwa (KP), Pakistan
Swabi
Pakistan

Tawhid Chtioui

affiliation not provided to SSRN

No Address Available

Ikram Radhouane

ICD International Business School

12 rue Alexandre Parodi
Paris, 75010
France

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
416
PlumX Metrics