EXAMINING THE IMPACT OF BOARD GENDER DIVERSITY ON FINANCIAL REPORTING QUALITY WITH AUDITOR QUALITY AS MODERATOR

Abstract

This study examines the relationship between board gender diversity and financial reporting quality in Nigeria, with particular attention to the moderating role of audit quality. Using a sample of 50 purposively selected non-financial firms over a seven-year period (2014–2020), data were obtained from annual reports and audited accounts. Financial reporting quality was proxied by accrual and real earnings management, while both random effects and fixed effects OLS regression models were employed. The findings show no significant association between female directors and accrual-based earnings management under the random effects model. However, the fixed effects results indicate that female board representation plays a mitigating role in reducing real earnings manipulation by management. In contrast, the study finds no empirical support for audit quality as a moderator of the relationship between gender diversity and financial reporting quality. The results suggest that sustaining and expanding women’s participation on corporate boards, potentially through quota legislation, can strengthen financial reporting quality by constraining opportunistic managerial practices. Beyond improving corporate governance, enhanced female representation may also contribute to fostering women entrepreneurs and innovators in emerging economies.