Abstract
The purpose of this paper is to investigate whether auditor gender has an impact on the magnitude of corporate earnings management in small and medium-sized private Finnish firms. Our results concerning gender differences in audit practices are twofold. First, when we regress the absolute (unsigned) earnings management on a gender dummy and a set of control variables, we find that female auditors allow for more discretion in income reporting than their male colleagues. When the analysis is conducted separately for sub-samples of income increasing and income decreasing discretionary accruals, the results suggest that female auditors are more conservative than their male colleagues.
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