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Top executive gender diversity and financial reporting quality

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  • Hrazdil, Karel
  • Simunic, Dan A.
  • Spector, Stephen
  • Suwanyangyuan, Nattavut

Abstract

We examine whether gender diversity of chief executive and chief financial officers (CEOs and CFOs) is associated with financial reporting quality. The CEOs and CFOs of publicly traded companies are both required to certify the appropriateness of their financial statements and annual disclosures. We argue that gender diverse dyads (groups) of executives can bring different perspectives and professional skepticism to financial reporting. Using a sample of different CEO/CFO gender dyads during 2006–2019, we postulate and find evidence of higher accruals quality among firms led by gender-diverse dyads compared to accruals quality reported by firms led by all-male CEO/CFO pairs. Additional analyses reveal that the auditors of firms with gender-diverse executive dyads issue audit reports later, charge higher audit fees, and are more likely to be one of the Big 4 firms. These findings support the view that top executive gender diversity enhances financial reporting quality, which has important implications for corporate governance mechanisms.

Suggested Citation

  • Hrazdil, Karel & Simunic, Dan A. & Spector, Stephen & Suwanyangyuan, Nattavut, 2023. "Top executive gender diversity and financial reporting quality," Journal of Contemporary Accounting and Economics, Elsevier, vol. 19(2).
    • Handle: RePEc:eee:jocaae:v:19:y:2023:i:2:s1815566923000139
    DOI: 10.1016/j.jcae.2023.100363
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    More about this item

    Keywords

    Executive diversity; Accruals quality; Audit report lag; Audit fees; CEO; CFO;
    All these keywords.

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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