Board diversity and financial statement comparability: evidence from China

Ding Ning (), Irfan-Ullah (), Muhammad Ansar Majeed () and Aurang Zeb ()
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Ding Ning: Dongbei University of Finance and Economics
Irfan-Ullah: Dongbei University of Finance and Economics
Muhammad Ansar Majeed: Zhejiang Gongshang University
Aurang Zeb: University of Peshawar

Eurasian Business Review, 2022, vol. 12, issue 4, No 6, 743-801

Abstract: Abstract We investigate the relationship between board diversity (relation-oriented diversity, task-oriented diversity, and overall board diversity) and financial statement comparability. We find that diverse boards are positively associated with financial statement comparability, suggesting that board diversity improves governance mechanisms by alleviating agency conflicts, leading to higher comparability than homogenous boards. We also find that institutional ownership positively affects the association between board diversity and financial statement comparability. Furthermore, the positive effect of diversity, institutional ownership, and comparability are more pronounced in non-state-owned firms and non-crisis periods. Our findings remain consistent with a battery of econometric techniques and measures of comparability. This study provides new insights regarding the role of boardroom diversity in shaping the qualitative aspect of financial reporting, i.e., financial statement comparability.

Keywords: Financial statement comparability; Relation diversity; Task diversity; China (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s40821-022-00214-3

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