The monitoring role of female directors over accounting quality
Juan Manuel García Lara,
Beatriz Garcia Osma,
Araceli Mora and
Journal of Corporate Finance, 2017, vol. 45, issue C, 651-668
Recent research in accounting suggests female directors exert more stringent monitoring over the financial reporting process than their male counterparts. However, an emerging literature in finance and economics provides mixed findings and questions whether females in leadership roles significantly differ from their male counterparts. Building on this literature, we re-examine the link between the presence of female directors, gender biases, and financial statements quality. Using a large sample of UK firms we find that a larger percentage of women among independent directors is significantly associated with lower earnings management practices. However, we show that this relation disappears if we focus on firms that do not discriminate against women in the access to directorships. Finally, we provide evidence that gender biases are associated with lower earnings quality. We interpret our results as consistent with (1) prior evidence that males and females do not differ substantially when performing the same role in highly specialized positions, and with (2) discrimination being an important factor explaining the association between female directors and accounting quality.
Keywords: Gender diversity; Board of directors; Accounting quality; Earnings management; Corporate governance (search for similar items in EconPapers)
JEL-codes: M41 G34 J16 J71 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:45:y:2017:i:c:p:651-668
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