The Impact of Board Characteristics on Audit Quality, Evidence-based on Listed Firms in Ghana

Abstract

This paper examines board characteristics' impact on audit quality, evidence from Ghana Stock Exchange. The study employed a panel regression model to examine the effect of board characteristics (board size, board independence, gender diversity, and CEO duality) on audit quality (DAC) for the period of 2012 to 2019 for twenty-five (25) listed firms in Ghana. The regression analysis results revealed that board size, board independence, and board gender diversity have a positive relationship with audit quality by reducing discretionary accruals. In contrast, a negative relationship was recorded between CEO duality and audit quality in the form of an increase in discretionary accruals. The shareholder accountability system and minority protection system in most enterprises in Ghana seem to exist only but need more improvement. Therefore, it is recommended that a more independent board of directors is appointed and also the engagement of auditors from the big4 audit firms to provide quality audit reports.