Joint Meeting of the Mid-Atlantic and Northeast Regions

Does Gender Composition of the Audit Workforce Matter? An Examination of Audit Quality

• In Event: Gender and Diversity

Abstract

This study examines the relation between gender composition of audit workforces and audit quality. Using archival data on audit offices of the twenty largest U.S. accounting firms from 2010 to 2018, we find that offices with a greater proportion of female employees are positively associated with audit quality as measured by restatements, comment letters, and meeting or beating analysts’ expectations. Results are driven by offices with a greater proportion of female staff (i.e., non-managerial) auditors. These findings are robust to controlling for office gender diversity, the gender composition of advisory practices, and employee satisfaction as well as the use of auditor and MSA fixed effects. In addition, we find that a higher proportion of female auditors are associated with greater audit efficiency (i.e., lower audit fees, shorter audit lags, fewer late 10-K filings). Our findings suggest workforce gender composition plays an important role in the outcomes of public accounting firms.

Authors

• Joshua Khavis, University at Buffalo

• Brandon Szerwo, University at Buffalo (SUNY)

• Amy Genson Sheneman, The Ohio State University