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Article
Publication date: 3 July 2017

Damai Nasution and Karin Jonnergård

This study aims to examine the association between auditor and chief financial officer (CFO) gender and earnings quality, utilising data from Sweden. This study also aims…

Abstract

Purpose

This study aims to examine the association between auditor and chief financial officer (CFO) gender and earnings quality, utilising data from Sweden. This study also aims to examine whether interactions between auditor and CFO, which may affect a firm’s earnings quality, are associated with their gender. These aims are inspired by the notion that gender differences will be overruled by the rewards and socialisation into the occupational roles as suggested by the structural approach to gender.

Design/methodology/approach

This study uses a multivariate regression model to test its hypotheses. The sample consists of 976 firm-year observations covering the period 2008 to 2013.

Findings

The results show that gender of the auditor and CFO is not associated with earnings quality, and the interactions between auditors and CFOs, which may affect earnings quality, are not associated with their gender. Consequently, the results give tentative support for the structural approach in gender studies in the accounting and auditing field.

Research limitations/implications

This study indicates that future research in gender studies should consider the structural approach based on the argument of gender similarities. This approach contends that work-related behaviour of women will more resemble men, and this is caused by the socialisation process into the occupational role and the structure where they work (e.g. organisational and professional culture, work conditions, a compensation scheme, national culture, etc.) instead of gender.

Originality/value

This study contributes to the understanding whether genderauditor and CFO gender – is associated with firms’ earnings quality and standing whether the interactions between auditor and CFO are associated with their gender, something that, to the best of the authors’ knowledge, has not been tested previously. It also re-introduces the structural approach within the gender research in the accounting and auditing field.

Details

Gender in Management: An International Journal, vol. 32 no. 5
Type: Research Article
ISSN: 1754-2413

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Article
Publication date: 11 October 2011

Jyrki Niskanen, Jukka Karjalainen, Mervi Niskanen and Jussi Karjalainen

The purpose of this paper is to investigate whether or not auditor gender has an impact on the magnitude of corporate earnings management in small‐ and medium‐sized…

Abstract

Purpose

The purpose of this paper is to investigate whether or not auditor gender has an impact on the magnitude of corporate earnings management in small‐ and medium‐sized private Finnish firms.

Design/methodology/approach

The paper examines the association between auditor gender and earnings management of private firms by means of multiple linear regression analysis. In this analysis the paper uses discretionary accruals (DACC) estimated by using the cross‐sectional version of the Jones model as a measure for corporate earnings management.

Findings

When the absolute (unsigned) earnings management on gender and a set of control variables is regressed, it is found that female auditors allow for more discretion in income reporting. When the analysis is conducted separately for sub‐samples of income increasing and income decreasing DACC, the results suggest that female auditors are more conservative.

Research limitations/implications

This study has been conducted by using data from one country. Since it is commonly known that the role of females in the society varies from one country to the next more research is needed in different social environments.

Practical implications

When selecting auditors, management should pay attention also to the gender of the auditor. It may also be useful for stakeholders to pay attention to the gender of the auditors that they engage or the gender distribution of the audit team.

Social implications

The results imply that gender diversity in the auditing profession may improve the quality of financial statement overall.

Originality/value

This study is the first one that investigates the effect that auditor gender may have on actual earnings management behavior. It also adds to the understanding on earnings management in private firms.

Details

Managerial Auditing Journal, vol. 26 no. 9
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 14 May 2019

Fan-Hua Kung, Yu-Shan Chang and Minting Zhou

This paper aims to examine the association between gender composition of joint auditor pairs and the quality of reported financial information. More specifically, the…

Abstract

Purpose

This paper aims to examine the association between gender composition of joint auditor pairs and the quality of reported financial information. More specifically, the authors attempt to assess whether and how these gender compositions affect the client firms’ earnings management behavior.

Design/methodology/approach

The authors utilized the unique institutional setting of Taiwan, where joint auditors are required by law. They studied the effect of gender in joint auditor pairs on accrual earnings management and real earnings management to achieve financial reporting objectives.

Findings

Empirical results indicate that engaging a woman as the lead auditor can constrain accrual earnings management, regardless of whether the joint auditor is male or female. The authors also found that all-male signing auditor pairs with industry expertise can significantly reduce accrual earnings management. The authors also documented that all-female signing auditor pairs and auditor industry expertise could drive clients to engage in real earnings management activities as an alternative to accrual earnings management.

Originality/value

The empirical results demonstrate that gender indeed plays a role in the quality of client’s reported financial information. Female auditors in a lead position and male auditors with industry expertise tend to be more successful in delivering better-quality audits.

Details

Managerial Auditing Journal, vol. 34 no. 5
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 1 January 2012

Kris Hardies, Diane Breesch and Joël Branson

The purpose of this paper is to examine if there exists a gender difference in overconfidence within an auditor population. Studies outside the accounting domain have…

Abstract

Purpose

The purpose of this paper is to examine if there exists a gender difference in overconfidence within an auditor population. Studies outside the accounting domain have found that men are more overconfident than women. It would be worthwhile to know if such a gender difference in overconfidence also exists within the auditor population. Such a gender difference could have far‐reaching consequences; among other things, it could explain why client firms with female audit partners have significantly higher audit fees. Because of substantial self‐selection and socialization it could however be that female auditors are as overconfident as their male colleagues.

Design/methodology/approach

As is common in the psychological literature, calibration tests were used to measure the degree of overconfidence of male and female auditors.

Findings

The results provide no evidence for a gender difference in overconfidence within a population of auditors and warrant against generalizing findings from non‐audit populations to auditors.

Research limitations/implications

Consistent with previous research, overconfidence was treated as if it were a single construct. The different varieties of overconfidence may, however, not simply be interchangeable. It may be the case that one measure of overconfidence would produce a sex difference while the other would not.

Practical implications

This study contributes to the growing literature that examines the effects of gender on audit judgment and decision making. An important implication is that the results clearly warrant against generalizing findings from non‐audit populations to auditors.

Originality/value

This is the first study to investigate if a gender difference in overconfidence exists within an auditor population.

Details

Managerial Auditing Journal, vol. 27 no. 1
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 5 June 2017

Hichem Khlif and Imen Achek

This paper aims to review studies dealing with gender issues in accounting literature over the period of 1994-2016.

Abstract

Purpose

This paper aims to review studies dealing with gender issues in accounting literature over the period of 1994-2016.

Design/methodology/approach

This study combines electronic and manual searches to identify relevant studies using keywords such as “gender” or “female” and “earnings quality” or “social and environmental disclosure” or “auditing” or “tax aggressiveness”. In total, 64 published studies were identified.

Findings

Three main streams of gender accounting literature related to financial reporting (earnings quality, accounting conservatism, voluntary disclosure), auditing (audit fees, audit opinion, audit report lag) and other miscellaneous topics were identified. Gender accounting literature uses empirical analysis, experimental approaches and interviews. Reviewed studies deal with top management gender (CEO, CFO), board of directors, audit committee and auditor gender. A synthesis of empirical findings shows that female representation on the board, audit committee, CFO or CEO leads to more conservative reporting, higher level of social and environmental disclosure, less tax aggressiveness and higher audit fees. Furthermore, auditor gender influences audit quality through lower abnormal accruals and shorter audit report lag, higher likelihood of issuing an adverse audit opinion and higher audit fees. Qualitative studies dealing with miscellaneous topics in gender accounting literature generally focus on the status of women in accounting and auditing professions, gender issues in accounting academic setting and disclosure about women in annual reports.

Practical implications

This review informs policymakers about the effect of female representation on accounting and auditing practices given the political debate largely shaped by anti-discriminatory arguments concerning the under-representation of women in management and audit professions.

Originality/value

This study goes beyond a classic narrative review by presenting criticisms to gender accounting literature and suggesting future research avenues.

Details

Managerial Auditing Journal, vol. 32 no. 6
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 1 March 2005

Mary Fischer and Lucille Montondon

Internal audit is getting recognition thanks to media coverage of alleged fraudulent activities and new regulations that require the evaluation of internal controls. Given…

Abstract

Internal audit is getting recognition thanks to media coverage of alleged fraudulent activities and new regulations that require the evaluation of internal controls. Given this attention, Harrington (2004) identified what organizations should look for when hiring a director of internal audit. This paper reports an investigation of college and university internal audit departments that determines if the directors hold the suggested qualifications and if the qualifications differ based on gender. Differences among the directors of internal auditor include demographic information such as salary, experience and number of staff members as well as who hires the director, and whether the institution has a governing board audit committee. Even with the differences, college and university internal audit directors are very much alike.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 17 no. 4
Type: Research Article
ISSN: 1096-3367

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Article
Publication date: 1 December 1997

Janice E. Lawrence, CPA PhD, Michael K. Shaub and CPA PhD

Auditors' ethical orientation and reasoning influence their professional and ethical decisions, thus impacting users of financial statements. This study examines gender

Abstract

Auditors' ethical orientation and reasoning influence their professional and ethical decisions, thus impacting users of financial statements. This study examines gender and career level influences on ethical orientation and reasoning and documents systematic differences across the accounting firm. Seniors were most likely to adopt the ethical views of relativism and situation ethics. Male managers and partners were conventional ethical reasoners who adopted society's view of ethical problems, with partners scoring highest on Stage 6 principled reasoning. Female managers were largely Stage 5 principled reasoners. The results emphasize the importance of developing richer descriptions of auditors' ethics before recommending changes in the profession.

Details

Managerial Finance, vol. 23 no. 12
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 14 May 2019

Maia Farkas, Rina Hirsch and Julia Kokina

The purpose of this paper is to examine potential determinants of management’s agreement with internal auditor recommendations of an interim assurance engagement.

Abstract

Purpose

The purpose of this paper is to examine potential determinants of management’s agreement with internal auditor recommendations of an interim assurance engagement.

Design/methodology/approach

The experiment involved a 2 × 2 × 2 design with internal auditor gender, mode of communication and root cause variables randomly assigned to 228 experienced managers.

Findings

When the internal auditor includes a root cause for an identified deficiency in an internal audit report, management perceptions of the quality of that report improve. The gender of the internal auditor who communicates the audit finding with management does not significantly impact management’s perceptions. Additionally, communicating the internal audit report via e-mail instead of videoconference results in improved managerial perceptions of the quality of the internal auditor. While improvements in perceptions of internal auditor quality lead to greater agreement with internal auditor recommendations, improvements in perceptions of report quality lead to greater implementation of internal-auditor-recommended remediation strategies.

Research limitations/implications

The operationalization of the manipulated variables of interest (communication mode, gender and root cause) may limit the generalizability of the study’s results.

Practical implications

The paper includes managerial implications for internal auditors’ choice of communication mode and inclusion of a root cause in interim internal audit reports.

Originality/value

This study provides evidence on the factors that could improve management’s perceptions of internal auditors’ work. The findings can help organizations, such as the Institute of Internal Auditors, to better understand how to address the needs of those who communicate with internal auditors.

Details

Managerial Auditing Journal, vol. 34 no. 4
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 18 July 2008

Philip Law

Though assurance services framework has been defined in the Auditing Standards, the understandability of the concept of reasonable assurance are varied by different…

Abstract

Purpose

Though assurance services framework has been defined in the Auditing Standards, the understandability of the concept of reasonable assurance are varied by different auditors. The audit risk model (ARM) that is being used on a worldwide basis to underpin the audit risk of companies, is often being criticized. The purpose of this paper is to assess auditors' perceptions of reasonable assurance in audit work and the effectiveness of the ARM.

Design/methodology/approach

Three independent variables are examined: CPA certification, ranks of auditors and gender for their influence on two dependent variables: the perceptions of reasonable assurance in audit work and the effectiveness of the ARM. MANOVA analysis and follow up Discriminant Analysis are employed.

Findings

Results reveal that there are significant differences between the perceptions held by auditors of different ranks regarding reasonable assurance in audit work. Partners entertain higher perceptions of reasonable assurance than staff auditors. The “gender” variable does not have an influence on the two dependent variables. Auditors with CPA certifications have higher perceptions of reasonable assurance. There are no differences in the perceptions ratings by different rank of auditors, gender and CPA certifications on the effectiveness of the ARM. The three independent variables have average high‐mean ratings on the effectiveness of the ARM, confirming that the current ARM still can provide an effective assurance.

Originality/value

This empirical study revokes the UK study and The Netherlands study. Immediate attention need not be focused on restructuring the ARM. Future contemplation of other important issue such as auditor independence may be considered.

Details

Asian Review of Accounting, vol. 16 no. 2
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 5 June 2017

Anne-Mie Reheul, Tom Van Caneghem, Machteld Van den Bogaerd and Sandra Verbruggen

The purpose of this study is to investigate the association between individual auditor characteristics (gender, experience and sector expertise) and audit opinions in…

Abstract

Purpose

The purpose of this study is to investigate the association between individual auditor characteristics (gender, experience and sector expertise) and audit opinions in Belgian non-profit organizations (NPOs). The purpose is to identify auditor characteristics that imply a better assurance of financial statement (FS) quality. FS quality is essential to enhance financial accountability toward the resource providers of NPOs and the public at large.

Design/methodology/approach

Multinomial regressions are conducted on a data set of Belgian NPOs. Propensity score matching is used to control for potential self-selection bias.

Findings

Auditors with sector expertise are found to provide better assurance than their non-sector-expert counterparts. The former are more likely to disclose FS errors and uncertainties in their audit report.

Originality/value

This study contributes to the auditing literature by focusing on an understudied audit market, namely, the non-profit audit market. The number of non-profit studies that investigate determinant of audit quality is very scarce, and none of them explores the determinants of audit opinions. Moreover, these studies ignore individual auditor characteristics as determinants of audit quality. The findings of this study provide meaningful information for several actors in the NP field and for audit firms.

Details

Managerial Auditing Journal, vol. 32 no. 6
Type: Research Article
ISSN: 0268-6902

Keywords

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