In their study A Study of Female Presence in the Audit Process on Audit Quality, Kevin J. Sun and Joseph H. Zhang examine the influence of female leadership on audit outcomes, focusing on roles like audit partners and audit committee chairs. Drawing on data from U.S. firms between 2016 and 2019, the research sheds light on the under representation of women in senior audit positions, contrasting this with their strong presence across the broader accounting field.
The authors provide evidence that companies with female audit partners or female audit committee chairs exhibit higher audit quality. This is measured by lower levels of discretionary accruals, fewer instances of financial misstatements, and more effective internal controls. These findings align with psychological and sociological theories suggesting that women tend to display greater compliance with rules and risk aversion, which enhances their decision-making in critical audit scenarios. Female auditors also tend to be more conservative, advocating for stricter financial reporting practices.
The study underscores the importance of interpersonal skills in the audit process, noting that female auditors are generally more collaborative and team-oriented. These traits contribute to better negotiation outcomes with clients and improved overall audit quality. However, the authors caution against oversimplification, emphasizing that gender diversity must be supported by inclusive practices to maximize its benefits.
One notable limitation of the study is its reliance on binary gender data, which may not fully capture the nuances of gender diversity. The authors advocate for future research to adopt a more inclusive approach, exploring psychological dimensions of femininity and masculinity and their effects on audit practices.
This paper contributes to the ongoing discourse on gender diversity in auditing, providing robust evidence that female presence in leadership roles positively influences audit quality. For further details, the study can be accessed in the Journal of Forensic Accounting Research here.