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Boardroom diversity and audit fees: director ethnicity, independence and nationality

Author

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  • Salau ABDULMALIK O.

    (University Utara Malaysia)

  • Ayoib CHE AHMAD

Abstract

This paper investigated the effect of boardroom diversity (herein a composite measure of boardroom ethnic composition, independent and foreign directors) on audit fees in the Nigerian context. A sample of companies listed on the Nigerian stock exchange between 2010 and 2011 was used. The study found that 51% of the sampled companies were ethnically diverse, with about 21% and 49% having foreign directors and independent directors respectively. Further, the results of the panel regression revealed that boardroom diversity had a positive relationship with audit fees. The findings indicate that boardroom diversity enhances board monitoring responsibility and therefore results in an increase in demand for auditors’ effort. The findings of this study have implications for future policy recommendations and formulation because they indicate that boardroom diversity could be a desirable board characteristic that can strengthen the monitoring role of the board.

Suggested Citation

  • Salau ABDULMALIK O. & Ayoib CHE AHMAD, 2016. "Boardroom diversity and audit fees: director ethnicity, independence and nationality," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 14(136), pages 413-413, Aprilie.
    • Handle: RePEc:aud:audfin:v:14:y:2016:i:136:p:413
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    References listed on IDEAS

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    Cited by:

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    2. Etienne Redor, 2017. "Board Turnover, Director Characteristics and Audit Fees," Economics Bulletin, AccessEcon, vol. 37(4), pages 2446-2457.
    3. Svitlana Shulha & Iaroslav Petrakov, 2016. "Non-Linearity Of Audit Prices And Reputation In Developing Countries: Shift To Or From?," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 2(5).
    4. Etienne Redor, 2017. "Board Turnover, Director Characteristics and Audit Fees," Post-Print hal-01624979, HAL.
    5. E. A. Onatuyeh & I. Ukolobi, 2020. "Tax Aggressiveness, Corporate Governance and Audit Fees: A Study of Listed Firms in Nigeria," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(6), pages 278-295, December.

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    More about this item

    Keywords

    Diversity; ethnicity; foreign directors; independent directors; Nigeria.;
    All these keywords.

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics

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