Does Female Representation On Audit Committees Affect Audit Fees PDF, ePub Download

Does Female Representation on Audit Committees Affect Audit Fees?

Author	: Kim Ittonen
Publisher	:
Total Pages	: 45
Release	: 2012
Genre	:
ISBN	:

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This paper examines the association between female audit committee representation and audit fees. We hypothesize that gender diversity on audit committees has implications for external auditing, and thus affects audit fees. Using a sample of the Samp;P 500 firms, we find considerable evidence to suggest that firms with female audit committee chairs have significantly lower audit fees. From the audit demand perspective, our findings may indicate that female audit committee chairs reduce the need for assurance provided by external auditors. Alternatively, from the supply-side perspective, female chairs and committee members may decrease audit fees by affecting the auditor's assessment of audit risk, for instance, by improving the effectiveness of internal control activities or by generally enhancing the integrity of the financial reporting process. If female representation reduces the inherent risk of misstatements, gender diversity on audit committees may be negatively associated with audit fees.

The Effect of Audit Committee Characteristics and Non-Audit Fees on Audit Fees

Author	: Lawrence Abbott
Publisher	:
Total Pages	: 0
Release	: 2009
Genre	:
ISBN	:

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This study examines the association between audit committee characteristics and audit fees, using data gathered under the recent SEC fee disclosure rules. We hypothesize that audit fees will be higher in the presence of an active and independent audit committee. Our base our hypothesis upon two premises. First, we argue that independent and active audit committees demand a higher level of audit quality due to concerns about monetary or reputational losses arising from financial misstatements. This higher audit quality demand may manifest itself in a higher amount of audit coverage, which, in turn should result in a concomitantly higher audit fee. Second, independent and active audit committees may give rise to greater auditor fee bargaining power. We examine a sample of 262 non-regulated, Big 5-audited firms that filed both 10-K and proxy forms with the SEC in the period from 2/5/2001 to 3/23/2001. Audit committees comprised solely of independent directors that meet at least four times annually are significantly, positively associated with audit fees. This evidence is consistent with audit committee members taking actions within their span of control to ensure a higher level ofaudit coverage, as well as facilitating auditor independence. Finally, we also examine the impact of non-audit fees on audit fees. We document a significantly positive association between audit fees and non-audit fees, consistent with prior research from the early 1980's.

Women on Corporate Boards of Directors

Author	: Ronald J. Burke
Publisher	: Springer Science & Business Media
Total Pages	: 296
Release	: 2000-03-31
Genre	: Business & Economics
ISBN	: 9780792361626

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This volume, the first to focus exclusively on women serving on corporate boards of directors, provides the latest thinking and research findings on this increasingly important corporate governance issue. It includes censuses of women directors in a number of countries, identifies reasons for their limited numbers, indicates why appointing qualified women to boards offers competitive advantages, and suggests practical ways corporations can attract, recruit and appoint more women board members. Researchers interested in gender and corporate governance issues, companies interested in increasing their numbers of women board members, and women and men serving or hoping to serve on corporate boards will find this book of interest.

The Impact of Demographic Characteristics of CEOS and Directors on Audit Fees and Audit Delay

Author	: Maretno A. Harjoto
Publisher	:
Total Pages	:
Release	: 2015
Genre	:
ISBN	:

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This study examines the impact of gender and ethnicity of CEO and audit committee directors on audit fees and audit delay in the U.S. firms. Audit related corporate governance literature has extensively examined the determinants of audit fees and audit delay by focusing on board characteristics, specifically board independence, diligence, and expertise. We provide empirical evidence that gender and ethnicity diversity in corporate leadership and boardrooms influence a firm's audit fees and audit delay. This study finds that firms with female and ethnic minority CEOs pay significantly higher audit fees than those with male Caucasian CEOs. We also find that firms with a higher percentage of ethnic minority directors on their audit committee pay significantly higher audit fees. Further, we find that firms with female CEOs have shorter audit delay than firms with male CEOs and firms with a higher percentage of female and ethnic minority directors on their audit committee are associated with shorter audit delay. Our results indicate that female CEOs and both female and ethnic minority directors are sensitive to the market pressure to avoid audit delay. Our results suggest that gender and ethnic diversity could improve audit quality and the firms' overall financial reporting quality. This study provides insights to regulators and policy makers interested in increasing diversity within a firm's board and top executives. Recently, the U.S. Securities and Exchange Commission (SEC) and the European Commission have been pressing publicly traded companies to improve diversity amongst their directors. This study provides evidence and perspective on how diversity can enhance financial reporting quality measured by audit fees and audit delay.

Boards, Governance and Value Creation

Author	: Morten Huse
Publisher	: Cambridge University Press
Total Pages	: 316
Release	: 2007-04-19
Genre	: Business & Economics
ISBN	: 1139463829

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What is the role of boards in corporate governance? How should they be structured in order to maximize value creation? This 2007 book looks at the role of boards in a variety of different countries and contexts, from small and medium-sized enterprises to large corporations. It explores the working style of boards and how they can best achieve their task expectations. Board effectiveness and value creation are shown to be the results of interactions between owners, managers, board members and other actors. Board behaviour is thus seen to be a result of strategizing, norms, board leadership, and the decision-making culture within the boardroom. Combining value creation, behavioural and ethical approaches to the study of boards, this work offers a systematic framework which will be of value to graduate students and researchers in the field of corporate social responsibility and business ethics.

The Audit Committee: Performing Corporate Governance

Author	: Laura F. Spira
Publisher	: Springer Science & Business Media
Total Pages	: 191
Release	: 2007-05-08
Genre	: Business & Economics
ISBN	: 030647655X

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Why do we need to understand audit committees? The Cadbury Committee recommended that UK companies should adopt them in response to financial scandals that have stemmed from dubious financial reporting practices. In other countries, similar commissions have made similar recommendations and audit committees are now a common institution. However, many practitioners doubt whether an audit committee really does much to ensure the integrity of a firm's financial statements because, as outsiders, members don't know enough to dig deeply beneath the numbers. The Audit Committee: Performing Corporate Governance argues that such criticism overlooks the ceremonial function of these committees. The audit committee is an arena where members can form and strengthen shifting and fragmentary networks with each other and with the external auditors. Within these networks, both consensus and independence are demonstrated, generating comfort, which legitimises the company and maintains its access to external sources of capital. The audit committee is a key part of the corporate governance structure within an organisation. Many in the UK have been patched together to meet regulatory requirements and their operation is poorly understood because few people other than their members have access to their deliberations. In this account of the world of audit committees the practitioner will find the ethnographical perspectives on ceremonial performance, consensus, independence, and comfort both familiar and different. It's like looking at a photograph of something commonplace from an unusual angle or through a strange-shaped lens.

Audit Committee Gender Diversity and Financial Reporting

Author	: Javad Oradi
Publisher	:
Total Pages	:
Release	: 2020
Genre	:
ISBN	:

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Purpose - The purpose of this paper is to investigate the association between gender diversity on the audit committees and the incidence of financial restatements.Design/methodology/approach - Using a sample of 683 firm-year observations from Iranian listed companies for the period 2013 to 2017, this paper uses a logistic regression model to examine a research hypothesis related to the association between the presence of female members on the audit committee and the incidence of financial restatements.Findings - After controlling for other restatement-related factors, the authors find that the presence of at least one female member on audit committees reduces the likelihood of the incidence of financial restatements. Robustness tests also confirmed this result. Moreover, the additional analyses show that independent and financial expert female members on audit committees are more strongly associated with a reduction in financial restatements. Further, the results suggest that the presence of female members on the audit committee can increase the likelihood of hiring higher quality auditors. Generally, the findings are consistent with the literature on gender diversity which suggests that women perform better in a monitoring role, are more conservative and make more ethical decisions. Practical implications - The findings of this study could help with the understanding of broader participation of female directors on company boards and subgroups such as the audit committee, and of the improvement in corporate governance. Moreover, the findings can be of particular interest to monitoring authorities and policy makers in developing countries and send positive signals to them regarding the recommendation or requirement of gender diversity as a part of corporate governance mechanisms. Originality/value - The present study contributes to the extant literature by providing empirical evidence on the effect of audit committee gender diversity on financial restatements. Furthermore, this study provides evidence on the more effective oversight and greater ability of independent and financial expert female directors, which has been significantly disregarded in the previous studies.

Auditor's Gender and Audit Fees

Author	: Kim Ittonen
Publisher	:
Total Pages	: 0
Release	: 2012
Genre	:
ISBN	:

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Documented behavioral differences between women and men suggest that the gender of the audit engagement partner may have implications for the price setting of the audit. Thus, this paper examines the effect of the auditor's gender on audit fees in an environment where the responsible audit partners can be identified. Using a sample of public firms from the NASDAQ OMX exchanges in three Nordic countries, we find evidence indicating that firms with female audit engagement partners have significantly higher audit fees. Although this is an interesting finding, it should be interpreted with caution since there is no clear theoretical explanation to support it. Potential reasons are introduced, such as the gender differences in risk tolerance, which may affect the pricing decisions by increasing the audit investment and/or increasing the audit fee risk premium. Alternatively, female auditors' diligence, lower overconfidence, and higher level of preparation could also lead to an increase in audit investment, and thereby result in higher audit fees.

The Bottom Line

Author	: Catalyst
Publisher	: Catalyst
Total Pages	: 35
Release	: 2004
Genre	: Diversity in the workplace
ISBN	: 0895842440

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This study explores whether there is a demonstrable connection between gender diversity and organizational financial performance.

Organizational Auditing and Assurance in the Digital Age

Author	: Marques, Rui Pedro
Publisher	: IGI Global
Total Pages	: 404
Release	: 2019-02-15
Genre	: Business & Economics
ISBN	: 1522573577

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Auditing is constantly and quickly changing due to the continuous evolution of information and communication technologies. As the auditing process is forced to adapt to these changes, issues have arisen that lead to a decrease in the auditing effectiveness and efficiency, leading to a greater dissatisfaction among users. More research is needed to provide effective management and mitigation of the risk associated to organizational transactions and to assign a more reliable and accurate character to the execution of business transactions and processes. Organizational Auditing and Assurance in the Digital Age is an essential reference source that discusses challenges, identifies opportunities, and presents solutions in relation to issues in auditing, information systems auditing, and assurance services and provides best practices for ensuring accountability, accuracy, and transparency. Featuring research on topics such as forensic auditing, financial services, and corporate governance, this book is ideally designed for internal and external auditors, assurance providers, managers, risk managers, academicians, professionals, and students.

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Does Female Representation On Audit Committees Affect Audit Fees