Do female directors of companies appoint audit firms with women in high-level positions?

Abstract

Purpose

This paper aims to investigate whether female directors of companies are more likely to appoint audit firms (AFs) with women in high-level positions adopting monitoring, reputation and homophily theories.

Design/methodology/approach

The paper uses ordinary least square to test the hypotheses using a unique hand-collected data set obtained from various sources. To mitigate potential endogeneity and selection bias issues, system generalized method of moments (GMM) and Heckman two-stage procedures are used. Additionally, alternative independent and dependent variables are created to strengthen the validity of main results.

Findings

The findings show that female directors are more likely to appoint AFs with women in high-level positions. Non-independent female directors, compared to independent ones, are particularly inclined to do so. These results are supported by further analyses using system GMM, Heckman two-stage procedures and alternative variables.

Originality/value

This study examines how female directors influence companies’ choices of AFs with women in high-level positions. It introduces unique audit firm governance proxies and variables specific to developing countries. The study also controls for various corporate governance, company and audit firm characteristics.

Citation

Arioglu, E. and Ocak, M. (2024), "Do female directors of companies appoint audit firms with women in high-level positions?", Gender in Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/GM-03-2024-0116