Board Gender Diversity, Audit Effort, and Financial Reporting Quality

This study aims to examine the role of board and audit committee gender diversity in audit effort and financial reporting quality. The research follows a quasi-experimental, ex-post-facto design. To test the research hypotheses, financial data from 163 companies listed on the Tehran Stock Exchange between 2012 and 2022 are analyzed using multivariate regression and panel data techniques. The findings reject all four hypotheses. Specifically, the results of the first hypothesis test indicate that the gender composition of the audit committee has a significant negative impact on audit effort, meaning that the presence of women on the audit committee leads to a reduction in auditors' efforts and, consequently, lower audit fees. Testing the second hypothesis test shows that the presence of women in the audit committee reduces the likelihood of selecting larger, higher-quality audit firms for auditing financial reports. This suggests a lack of female participation in auditor selection and negotiation processes. As for the third hypothesis, the findings reveal no significant impact of board gender on obtaining an unqualified audit opinion, as the presence of women on the audit committee does not reduce the likelihood of the company receiving such opinions from auditors. Finally, the results of the fourth hypothesis test show that female members on the audit committee and board of directors have no significant impact on the quality of financial reporting in Iranian companies.