The Relationship Between Corporate Social Responsibility, Board Gender Diversity and Audit Quality: The Greenwashing Approach

Purpose: This study makes a valuable contribution by exploring the moderating effect of gender diversity on the relationship between corporate social responsibility and audit quality in European companies. Design/Methodology/Approach: The study is based on a sample composed of 207 European companies over the period 2010-2021. Furthermore, a moderation model is developed in order to examine the gender diversity s’ moderating role on the relation between corporate social responsibility and audit quality. Findings: The results show the negative association between corporate social responsibility and audit quality in European firms with greenwashing approach. Our findings argue that the presence of women in the board moderates the relationship between corporate social responsibility and audit quality. Practical implications: Our findings indicate that involving women in the decision-making processes of firms leads to more ethically oriented strategies that consider the interests of diverse stakeholder groups. Therefore, it is crucial for policymakers and governments in leading nations to promote greater integration of women into corporate decision-making roles. For investors, our results show that the presence of women increases a company's commitment to socially responsible practices, thereby enhancing its reputation and reducing opportunistic behavior, especially in response to a high-quality auditor's request. Originality/value: The findings of this study contribute to the literature on audit quality by indicating that corporate social responsibility and the presence of women in the board can play a significant role in improving audit quality, aligning with greenwashing practices.