Impacts of Gender Diversity in Board of Directors and Audit Committee on Earnings Quality

Abstract

Objective: The purpose of this study is to investigate the effects of at least one female delegate in the board of directors and in audit committee (gender diversity) on earnings quality, using the data analysis of 152 companies listed in the Tehran Stock Exchange in the years 2011-2016. Methods: Data collection was done by the archive-based method, and the hypotheses tests was carried on by regression analysis, using the unbalanced panel data method. Results: Findings showed there are significant impacts of women's participation in audit committee on the earnings quality. But conversely, the results showed that gender diversity in the board of directors has no significant effects on the company's earnings quality. Conclusion: The presence of women's representatives in the leading members of firms results in improvements in monitoring the management and the quality of financial reporting. This increases the independence of the board of directors and audit committee and, as a result, improves earnings quality.

Keywords

• audit committee
• board of directors
• earnings quality
• gender diversity