2021/05/02 by Javad Oradi, Sahar E-Vahdati
Business, Management and Accounting · Social Sciences · #Accounting #Audit #Audit committee #Business #Control (management) #Corporate Finance and Governance #Corporate governance #Diversity (politics) #Economics #Finance #Gender Diversity and Inequality #Gender Politics and Representation #Gender diversity #Law #Management #Political science #Stock exchange
paper · doi:10.1080/01559982.2021.1920127
crossref issued 2021/05/02 · crossref published 2021/05/02 · crossref published-online 2021/05/02 · openalex publication_date 2021/05/02 · crossref created 2021/05/02 · crossref published-print 2021/07/03 · openalex created_date 2025/10/10 · crossref deposited 2026/02/12 · crossref indexed 2026/07/30 · openalex updated_date 2026/07/31
While there is little evidence on the relationship between board gender diversity and internal control weaknesses (ICWs), existing studies are based on the U.S. data. We extend the literature by examining the relationship between female directors on audit committees (ACs) and ICWs in Iran, a developing country with different cultural and corporate governance characteristics from western countries, which are the focus of most previous studies. We further split financial expert directors on ACs by gender and examine whether female and male financial experts on ACs are associated with ICWs. Using hand-collected data of 181 unique firms on the Tehran Stock Exchange (TSE) over the period 2013–2018, we find that firms with female representation on the AC are less likely to have ICWs. We also find that female financial experts on ACs are associated with fewer ICWs, whereas male financial experts on ACs are not significantly associated with ICWs. These results remain robust after performing several sensitivity tests. Overall, our results are interesting and indicate that the presence of female directors has a positive effect on corporate outcomes even in such an environment that is expected to yield different results. Our study has practical implications for Iranian regulators about gender-diversity policies.