The relationship between board gender diversity and audit quality in Egypt

Author's Department

Accounting Department

Third Author's Department

Accounting Department

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https://doi.org/10.1108/JEAS-08-2022-0199

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Ahmed Abdel-Meguid, Mostafa Abuzeid, Moataz El-Helaly, Nermeen Shehata

Document Type

Research Article

Publication Title

Journal of Economic and Administrative Sciences

Publication Date

1-1-2024

doi

10.1108/JEAS-08-2022-0199

Abstract

Purpose: This paper aims to examine whether female representation on boards is significantly associated with audit fees paid by top Egyptian listed companies. Design/methodology/approach: The authors collect data on audit fees, board of directors' characteristics and financial data for the top 100 companies listed on the Egyptian Exchange (EGX100) for a period of six years. The authors employ an ordinary least squares regression model to capture the relationship between board diversity (i.e. the proportion of female board directors) and the natural logarithm of audit fees while controlling for firm and industry fixed effects as well as other known firm characteristics. Findings: The authors find that audit fees are significantly associated with the proportion of females serving on firms' boards of directors. The findings suggest a complementary relationship between females on boards, as a quality-enhancing board attribute; and audit fees, as a proxy for audit effort and audit quality. Research limitations/implications: Limitations of this study arise first from the relatively small sample size, and second from the fact that inferences may be specific to the Egyptian context and similar markets. Practical implications: The results have important implications for Egyptian policy makers and regulators in terms of board composition. Social implications: This study provides empirical evidence that further enforces the business case for women's empowerment and the impact of this on the effectiveness of corporate governance. Originality/value: To the best of the authors’ knowledge, this is the first archival study to examine the association between female board representation and audit fees in Egypt.

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