Where the Women Are: The Relationship Between Female Audit Committee Accounting Experts and Audit Effectiveness

Abstract

Studies have evaluated audit committee effectiveness in the context of whether audit committee financial experts have accounting experience. The results are currently conflicted and there are arguments why experts with or without accounting experience may be incrementally effective. However, research has scarcely looked at the impact female audit committee members have on effectiveness, and no current study has considered the impact of female accounting experts specifically. This thesis intends to address this gap in the literature by evaluating whether audit committees with a female accounting expert are associated with lower earnings manipulation, a measure of audit committee effectiveness. I evaluate the number of female accounting experts on an audit committee using data collected from proxy statements of S&P 100 companies for the 2018 fiscal year. This data was compared to each company’s Beneish M- score, which measures a firm’s earnings manipulation. The results from the multivariate regression were not statistically significant, so there is no support that a negative association exists between audit committees with a female accounting expert and earnings manipulation. Key words: Audit committee accounting experts, gender, earnings manipulation