Female Auditors Research Articles

Female superiority in accruals quality: some evidence from the Scandinavian region

Purpose The purpose of this paper is twofold. First, this study examines the relationship between the presence of a female (rather than a male) audit partner and the client firm’s accruals quality. Second, this study explores whether and how the female audit partners’ specific attributes influence the gendered auditor effect on the quality of the client firm’s accruals quality (if it exists). Design/methodology/approach Research hypotheses have been tested by conducting both univariate and multivariate empirical analyses based on a large sample of firm-year observations from the Swedish Corporation for the years 2010–2019. During the sample timeframe, the client firms have been audited by 56 female and 231 male audit partners. Findings The research findings first indicate that client firms of female audit partners are associated with downward earnings management, indicating a beneficial female auditor effect on client firm’s accruals quality. Results from the audit partner change analysis exhibit that the adverse female auditor effect on the client firm’s earnings management, and hence, the beneficial female auditor effect on the client firm’s accruals quality occurs from the first year of the assignment of a female audit partner to replace a male audit partner. When looking at how specific attributes of female audit partners influence accruals quality of their audited clients, this study reveals that the favorable female auditor effect on the client firm’s accruals quality holds constant for all the female audit partners’ specific attributes included in the researched models. This underscores that the mere presence of a female audit partner constrains earnings management and enhances, thereby, the client firm’s accruals quality. Originality/value This research supports regulators calling for the appointment of more women to the audit firms’ leading ranks (e.g. leadership).

Gender Salary Gap in the Auditing Profession: Trend and Explanations

This study documents the gender salary gap in the auditing profession and explains its development. Using Swedish administrative data from 2007 to 2015 for all Certified Public Accountants (CPAs), I find that the auditing profession’s overall gender salary gap has substantially narrowed during this period, and more female auditors have moved up to the top earnings group, reducing the wide salary gap at the top of the income distribution. Further analysis shows that the increase in female auditors’ client portfolio size accounts for approximately half of the decrease in the total salary gap. I also find evidence that the rise in female leadership in the Big Six firms is positively associated with the increase in female auditors’ client portfolio size. This effect is more pronounced in the middle and bottom half of firms’ hierarchy, suggesting that female representation at the top of a firm’s hierarchy has spillover benefits for lower-ranked female auditors. The implications of this study may help audit firms narrow their gender gaps and cope better with the overall talent challenges of the auditing industry.

Audit committee characteristics and Key Audit Matters (KAMs) disclosures

AbstractIn this study we have examined if audit committee characteristics in terms of audit committee members’ gender, audit committee members’ accounting and finance backgrounds, audit committee members’ industry expertise and audit committee members’ legal expertise affect the number and content characteristics of KAMs reported. We examine the issue based on a sample of 1112 firm‐year‐observations and 3013 KAMs spanning for the period 2017–2020. We use multivariate regression models to examine the research questions. We also use a variety of other specifications for robustness test. Our findings suggest that female audit committee members reduce the number and lengths of KAMs. Our results further suggest that auditors disclose more specific information, identify more firm specific KAMs and produce more readable KAMs in the presence of female members in the audit committee. We find similar results for audit committee members’ accounting and finance backgrounds and audit committee members’ industry expertise. However, audit committee members’ legal expertise reduces disclosure specificity, readability, and lengths of KAMs. Our results suggest that the audit committee strength/diversity affects the number and content characteristics of KAMs disclosure. This study makes a unique contribution by showing that audit committee characteristics affect the content specificity and idiosyncrasy of KAMs disclosed by external auditors. Moreover, this study supports the previous findings in the UK context that audit committee characteristics affect the number and readability of KAMs. Given the global adoption of ISA 701, evidence from current study will add to the global effort to understand the determinants of KAMs reporting practices. For regulators this study contributes by showing that audit committee members’ diversity affects the content characters of KAM.

Stimulants of behavioural change: accounting education schism and gender

PurposeThis paper aims to identify differences in auditors’ behaviour who have undergone work-integrated learning (WIL) versus the classical accounting education.Design/methodology/approachIn addition to the education factor, auditors’ perception is assessed in scenarios when facing time budget pressure and time deadline pressure. The gender factor is included to highlight any behavioural differences between male and female auditors. Senior auditors working at the Big Four firms in the UK have participated in this survey.FindingsThe results show, from an educational perspective, that traditional accounting program is perceived as a catalyst of dysfunctional audit behaviour in comparison to WIL program that demonstrated a higher degree of ethicality. Furthermore, the results identify male auditors as having more tendency to behaving dysfunctionally when compared to their female counterparts.Practical implicationsThis paper goes beyond assessing auditors’ ethical actions under work-related stresses, to identifying the differences in their behaviour based on their academic background. It can be used as a tool for audit practitioners and accounting faculty by highlighting the factors leading to dysfunctional behaviour and trying to mitigate them.Originality/valueThe added value of the research paper is that it sheds light on one of the most issues faced by auditors and employees in general. Time pressures embedded in most businesses can harm organizations badly in relation to the behaviour of their employees.

Innovative Information Technology in Auditing: Auditors’ Perceptions of Future Importance and Current Auditor Expertise

ABSTRACT Innovative information technology (IT) could help to improve the effectiveness and efficiency of audits. Accordingly, we investigate the future importance, and current auditor expertise, regarding 18 technologies identified from a comprehensive literature review and interviews with Big 4 audit technology experts. We then surveyed German auditors and received 433 usable responses. Respondents perceive most of the analyzed IT as relevant in the next three to five years. Online meeting solutions and data mining have the highest importance rating. By contrast, self-assessed current personal knowledge of most IT is low. Complementary regression analyses reveal that female auditors and Big 4 auditors perceive IT as more important, and younger auditors and Big 4 auditors assess their own knowledge as higher. Comparing importance and knowledge ratings, we find a serious importance-knowledge gap for all considered IT. Intensive educational efforts seem to be essential in order to close this gap.

The gender‐diverse audit committee and audit report lag: Evidence from China

This study investigates the relationship between gender‐diverse audit committees and audit report lag. We examine a sample of Chinese listed companies during the period 2010–2018 and document a negative relationship between gender‐diverse audit committees and audit report lag. This is consistent with the premise that a gender‐diverse audit committee is able to better monitor the preparation of financial reports, communicate better with auditors in resolving disagreements between management and auditors and facilitate a more efficient audit engagement, thereby shortening the audit report lag. In additional analysis, we find that female audit committee members possessing professional accounting qualifications and accounting work experience are associated with shorter audit report lag.

Audit partner workload, gender and audit quality

PurposeThe paper aims to investigate the relation between the auditor's workload (LogAPW) and audit quality. Further, it explores whether the presence of a female audit partner (hereafter FEM) influences the LogAPW effect on audit quality.Design/methodology/approachA dataset of 1,629 firm-year observations from 181 companies listed in the NASDAQ OMX Stockholm for the years 2010–2018 has been analyzed. The testable hypotheses have been tested using least squares regressions clustered at the Swedish public-listed companies (client-firm) level.FindingsThe research findings first indicate that overburdened audit partners (APS) are associated with lower-quality audits, consistent with the “busyness hypothesis.” Nevertheless, the adverse association turns to be positive for FEMs, supporting the thesis that FEMs have more tendency, as compared to their male counterparts, to preserve their partnership's position in the public-audit firms. Collectively, these results seem sound, as the results hold unchanged after controlling for the endogeneity concerns and provide the same conclusion for a host of additional measures for both the client-firms' discretionary accruals and the LogAPW.Research limitations/implicationsEven though a lower magnitude of the client-firms' discretionary accruals corresponds to a lower-opportunistic behavior of managers, the research is limited to by which lower values of earnings management reflect a better-quality financial reporting. Given that the empirical analysis has been confined to the Swedish Corporation, the regression results might not be generalizable for other countries with different contextual features.Practical implicationsThe study might participate to the ongoing debate about the introduction of more women to the public-audit firms' elite positions (e.g. partnership) by providing evidence for the favorable female auditor effect on the quality of the client-firms' financial reporting.Originality/valueThe regression results provide a preliminary evidence on how does the presence of a FEM mitigate the inverse relation between the LogAPW and audit quality, which is an issue that has not been examined before.

Real Earnings Management: Do the Experience and Gender of Big4 Auditors Matters?

Objective - This study examines whether the experience and gender of auditors in Big4 firm in relationship of deterring Real Earnings Management (REM).Different from the majority of previous studies, this study focuses on auditors in Big4 audit firms and real earnings management within Malaysian business environment. Big4 audit firms are associated with high quality audit because of the reputation to uphold, thus adopted stringent quality control and assurance approach, systems and procedures. Once adopted, the effect of individual characteristics may become less important. Thus, it is questionable whether individual characteristics such as auditor experience and gender could still have an influence on the outcomes of an audit, in this case, REM, when the audit firms are Big 4 (assuming very stringent quality control procedures are adopted). Methodology/Technique –This study substantiates prior literature and conducted tests only on companies audited by Big4 audit firms. We also find that auditor experiences confirms to Agency Theory where REM reduces when the experience increases. Data was obtained from the Companies Commission of Malaysia (SSM), DataStream and Bursa Malaysia. Findings - The result confirms prior literature that auditor experience is still an important factor that can limit REM, even in companies audited by the Big4 firms. The results however reveal that Big4 female auditors do not have any significant effect in reducing REM. Novelty -Although female auditors are claimed by Gender Socialization Theory, to have better moral judgments than male auditors, the result shows both genders are equal, at least in limiting REM. Type of Paper: Empirical. JEL Classification: M40; M41; M42 Keywords: Big4 Auditors; Auditor Experience; Real Earnings Management; Auditor Gender; Bursa Malaysia

FEMALE REPRESENTATION, CORPORATE GOVERNANCE, AND EARNING MANAGEMENT IN INDONESIAN NON-FINANCIAL FIRMS

This study analyzes the effect of female directors, managerial ownership, female audit committee, audit committee size, independent commissioners, board size on earnings management in Indonesian Non-Financial Firms. The sample of this study consist of 291 non-financial firms over the period 2015-2017. This study measures earnings management using discretionary accruals. The data were analyzed using multiple regression. This study found that audit committee size negatively affects earnings management. This study also found that female directors, managerial ownership, female audit committee, independent commissioners, and board size do not affect earnings management. This study contributes to the important of audit committee as corporate governance mechanisms to reduce

Audit firm's Confucianism and stock price crash risk: Evidence from China

This study examines the association between audit firm's Confucianism and stock price crash risk. We postulate that Confucian moral standards predict a mixed relationship between audit firm's Confucianism and stock price crash risk. Using a large sample of listed firms in China during 2006–2018, we find that audit firm's Confucianism is positively related with client's future stock price crash risk, implying that Confucianism of audit firm aggravates client's bad news hoarding behavior. The effect is more pronounced for client without female auditors and/or with closer personal relationship with auditors. Mechanism analysis shows that audit firm's Confucianism exacerbates crash risk by worsening audit quality and information transparency. Political discipline and external monitoring help to alleviate the negative influence of audit firm's Confucianism on stock price crash risk.

Female audit team leaders and audit effort

Auditing is a collective process conducted by a professional accounting team with a wide range of skills and experience. Audit work is labor-intensive, and audit team diversity, particularly gender diversity, is considered to have both auditing and economic effects. However, there is scant empirical research on the way that audit engagements are conducted and the role of audit team leaders (ATLs), specifically female ATLs, in the audit effort, because they and other audit team members mainly develop audit strategies in practice during the planification period. A hand-collected private data set was gathered from Spanish small and medium-sized audit firms from 2001 to 2015. After controlling for endogeneity, the analysis shows a more efficient audit effort by female ATLs and their audit teams when task complexity increases. Furthermore, the findings show a masculinization process by female ATLs when their experience rises, which may be interpreted as intrinsic motivation for future promotions. Additional analyses also reveal differences in female ATLs’ behavior when there are shorter audit firm tenures and larger audit firm sizes. Overall, our empirical evidence is in line with the idea that gender diversity is positive for audit efficiency. Our study responds to calls from regulators to consider audit team attributes as a relevant factor in the quality of audit quality practices.

DINAMIKA KARAKTERISTIK KOMITE AUDIT PADA AUDIT REPORT LAG

This study examines the role of the audit committee on audit report lag. The sample in this study was taken from all companies listed on the Indonesia Stock Exchange. The sample selection method using the purposive sampling method. By using multiple regression analysis techniques, it is found that the competence of the audit committee, number of members of the audit committee has a negative effect on the audit report lag. The higher the intensity of the audit committee meeting, the earlier financial reporting supervision occurs. High quality of financial reporting makes the audit period of the financial report audit shorter. The independence of the audit committee does not appear to affects the audit report lag. This is because the object of the examination of the financial statements itself is the annual report. On the other hand, the gender of the female audit committee has a negative effect on the audit report lag. The existence of female gender in the composition of the audit committee plays an important role in shortening the period for completion of audits by independent auditors.Penelitian ini mengkaji tentang peran komite audit terhadap audit report lag. Sampel dalam penelitian ini diambil dari seluruh perusahaan yang terdaftar di Bursa Efek Indonesia. Metode pemilihan sampel menggunakan metode purposive sampling. Dengan menggunakan teknik analisis regresi berganda diketahui bahwa kompetensi komite audit, jumlah anggota komite audit berpengaruh negatif terhadap audit report lag. Semakin tinggi intensitas rapat komite audit, maka semakin dini pengawasan pelaporan keuangan terjadi. Kualitas pelaporan keuangan yang tinggi membuat periode audit laporan keuangan menjadi lebih singkat. Independensi komite audit tampaknya tidak mempengaruhi audit report lag. Hal ini dikarenakan objek pemeriksaan laporan keuangan itu sendiri adalah laporan tahunan. Di sisi lain, jenis kelamin komite audit perempuan memiliki pengaruh negatif terhadap lag laporan audit. Keberadaan gender perempuan dalam komposisi komite audit berperan penting dalam mempersingkat jangka waktu penyelesaian audit oleh auditor independen.

Performance evaluations and junior auditors’ attitude to audit behavior: a gender and culture comparative study

PurposeThe purpose of this paper is to shed light on factors leading to unethical acts committed by auditors from a cultural and gender perspectives. It investigates differences in junior auditors’ attitudes towards audit behavior when a performance evaluation (PE) is anticipated. The objective of this study is to aid academicians and audit executives in developing new models of PE and internship programs that should mitigate dysfunctional behavior.Design/methodology/approachA survey adapted from Big Four companies’ performance appraisal templates was administered to junior accountants who have completed their internship programs and their external audit course at accredited universities in Lebanon and the USA. Several statistical tests were conducted to analyze the relationship between the different variables.FindingsThis paper shows how PE affects junior auditors’ attitudes to dysfunctional audit behavior (DAB). From a cultural standpoint, American auditors express more negative views towards DAB than their Lebanese counterparts. This paper also demonstrates that female auditors are less inclined towards DAB than male auditors.Originality/valuePrevious studies on the topic have been mostly conducted in developed countries with a scarcity of studies examining multiple countries. This study focuses on two different cultural contexts, a developed country, the USA and an emerging country, poorly represented in the literature, Lebanon. This paper also observes variances between male and female auditors in DAB when expecting a PE. The originality of this paper stems from its concurrent examination of the impact of gender and culture on DAB by using a sample of less-experienced auditors at the end of their educational path.

THE STATUS OF WOMEN IN THE INDEPENDENT AUDITOR'S PROFESSION: ANKARA PROVINCIAL RESEARCH

In our country, the accoutancy profession gained legal status on 13 June 1989 with the law numbered 3568. For more than 30 years, the requirements of the profession have been shaped by the law numbered 3568 for the activities of the accounting profession to keep up with the times. The audit profession and accountants were questioned after the accounting scandals that shook the whole World in the 2000. After the scandals in the profession, necessary steps were taken for the advent of the profession in our country as well as in the Word. The aim of this study is to examine the changes in the number of people who prefer in the light of these developments in the profession. İn light of the developments in the World, as a result of the increasing importance of the independent auditor’s profession, it is to determine the number of female auditors who perform the financial consultancy and subsequently continue their activities as auditors. Working in Ankara is the reason for choosing not constitute a significant proportion of the total number of financial advisory and auditing profession in Turkey. İn this study revealed how less female independent auditors perform this profession compared to male professionals. For this purpose, Ankara were examined by determining the number of women in proportion to the number of auditors and independent auditors in Turkey are given.

The relationships of personal, social and demographic factors on Chinese auditors’ intentions to accept unethical engagements

ABSTRACT This study aims to investigate the personal and social influences on Chinese auditors’ intentions to accept unethical engagements when faced with ethical dilemmas. The theory of reasoned action (TRA) is employed as the theoretical basis for the investigation. Personal factors (i.e. ethical ideologies) and social factors (i.e. Chinese interpersonal relationships, termed guanxi) are included in the TRA model to examine auditors’ intentions. A survey methodology is utilised in this study. The results from a sample of 306 auditors from several cities in China show that auditors’ idealism is positively associated with their attitudes towards the rejection of questionable engagements; conversely, relativism is negatively associated with their attitudes towards the rejection of questionable engagements. In addition, auditors’ guanxi orientations (i.e. favour-seeking and rent-seeking) are negatively associated with subjective norms, which suggests that auditors are aware that their close personal relationships with clients could be in conflict with their colleagues’ or supervisors’ expectations. In the further tests, this study controls for the effects of gender and region on auditors’ ethical intentions. The results indicate that female auditors may be more sensitive to ethical issues than male auditors, and auditors in southern China might adopt a more independent and fair perspective when confronted with ethical dilemmas. The findings can help managers better understand personal and social factors that influence their employees’ moral reasoning and adopt proper measures to enhance auditors’ ethical intentions.

Triple-strength model of female auditors empowerment in Iran

PurposeAs one of the dominant features in developing countries, gender inequality has driven individual development and the promotion of skills, behavioral and social competencies largely based on the male gender. The audit profession is considered one of the jobs where gender inequality exists, especially in developing countries. This has made educational programs more inclined toward enhancing masculine abilities, followed by less well-regarded feminine functions in the field. This study aims to present a triple-strength model of female auditors empowerment in Iran.Design/methodology/approachThis is a goal-oriented, descriptive-applied developmental research and a mix of data types. In the qualitative section, the three-dimensional empowerment proposition of women working in the field of internal auditing (IA) were identified based on the Dacum model approach participated by 15 research experts, using cross-sectional and Delphi analyses. A total interpretive structural model analysis was performed with the participation of 20 women as internal auditors of companies listed on the Tehran Stock Exchange (TSE).FindingsThe purpose of this analysis was to prioritize the spectrum of the most influential indices of empowerment of female auditors in educational planning to the least effective ones in the form of the research model and to examine the relationships between them based on matrix comparisons. According to the results, 17 indices reached theoretical adequacy during the 2 rounds of Delphi analysis out of the initial 19 indices in the cross-mix analysis.Originality/valueThe results of the interpretive/structural analysis indicated that educational planning was selected to balance the other roles of women as internal auditors, and the most influential Dacum proposition was to enhance the capabilities of women in IA in listed companies in TSE.

Audit Committee Chair Characteristics and Real Earnings Management

We examine the relationship between male versus female audit committee chair characteristics and real earnings management (REM). REM occurs when the firm deviates from its normal operations because managers wish to misrepresent true performance. We find that a female audit committee chair and a chair with prior auditor experience, regardless of gender, are both associated with lower REM and thus greater financial statement transparency for investors. Overall, the findings support the ideas that (1) a female audit committee chair and (2) an older audit committee chair, regardless of gender, promote financial statement transparency.

WOMEN MANAGERS IN AUDITING SECTOR: A DESCRIPTIVE RESEARCH ON TURKEY

This study examines the relationship between female managers' presence in audit firms and audit firms' characteristics. In line with the employment rates obtained from POA, it is observed that gender inequality in the audit sector started from employment. In the research part, 90 audit companies' data that published transparency reports in 2018 were used. It has been determined that there are very few female managers in the sector; in fact, 47 of 90 companies do not have a female partner, board member, or responsible auditor. It is also analyzed that in the older audit firms, the audit firms that earn more revenue and big four firms, the number of female managers is significantly higher than in other firms. The study is essential in revealing that women's employment in the audit sector is a crucial problem and detects the positive relationship between corporate governance and female managers.

The experiences leading to resignation of female audit managers: an interpretative phenomenological analysis

Purpose Considering the benefits that gender diversity could bring to audit firms, especially in a time when the audit profession faces criticism and the COVID-19 pandemic has widened the gender inequality gap, this study aims to explore the lived experiences of female former audit managers from a social role theory and role congruity theory perspective, to understand the factors that contributed towards their resignations. Design/methodology/approach An exploratory qualitative research approach and an interpretative phenomenological analysis design were used. Semi-structured interviews were conducted with senior female audit managers who had resigned from Johannesburg Stock Exchange-accredited audit firms. Findings The female former audit managers reported their unique experiences in terms of a lack of transparent career progression discussions, audit firms being run by “old boys’ clubs” and unfair treatment linked to bias, job overload and indistinct ambitions to become audit partners. Research limitations/implications The homogeneous sample included a small number of female participants from a limited number of audit firms. Originality/value The findings could inform audit firms how to address the factors contributing to female audit managers’ resignations and to challenge stereotypes to retain more women for promotion to audit partner-level, thereby capitalising on the benefits of a diversified management structure that could lead to higher quality audits and address gender inequality.

Auditor ethics: do experience and gender influence auditors’ moral awareness?

PurposeThe purpose of this paper is to examine how experience and gender relate to the auditors’ moral awareness.Design/methodology/approachHypotheses are informed by a neurocognitive approach to ethical decision-making and tested using survey data from 191 auditors of a Big Four audit firm in The Netherlands.FindingsThe main findings indicate that more experienced auditors (i.e. those with more years of work experience, a higher rank and a higher age) show higher levels of moral awareness. This positive relationship is stronger for morally questionable situations related to accounting and auditing, compared to general business moral dilemmas. In addition, the results support the expectation that on average, female auditors have higher moral awareness than their male counterparts.Originality/valueTo the knowledge of the authors, this is the first study that considers a neurocognitive approach to inform hypotheses about the antecedents of auditors’ moral awareness. The findings suggest that the involvement of experienced auditors in ethical decision-making processes may be beneficial given their enhanced ability to identify ethically disputable situations as such. Furthermore, increasing the number of women in senior positions may positively affect ethical decision-making in audit firms. Finally, this paper presents directions for future research.