Advances in Accounting , incorporating Advances in International Accounting Board Gender Diversity and Internal Control Weaknesses

  • Chen Y
  • Daniel J
  • Soileau J
ISSN: 0882-6110
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Abstract

We investigate the role of gender diversity on corporate boards in mitigating internal control weaknesses (ICWs). We predict and find that firms with greater female board representation are less likely to have ICWs. The results are not driven by females sitting on the audit committee. Instead, it appears that females on corporate boards reduce ICWs, regardless of whether they sit on the audit committee or not. Our results are inconsistent with the critical mass theory, showing that even one female board member could reduce the likelihood of ICWs. Taken together, the evidence is consistent with female board members' typical characteristic tendency shown in prior literature (e.g., being more likely to discuss difficult issues, more fiscally conservative, better monitors, and less tolerant of opportunistic behaviors). Our results have implications for board member selection from a policy perspective as well as board member monitoring from an investor and regulator perspective.

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Chen, Y., Daniel, J., & Soileau, J. S. (2016). Advances in Accounting , incorporating Advances in International Accounting Board Gender Diversity and Internal Control Weaknesses. International Journal of Cardiology, 33(1), 11–19. Retrieved from http://dx.doi.org/10.1016/j.adiac.2016.04.005

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