The relationship between board gender diversity and audit quality in Egypt

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.

Citation

Abdel-Meguid, A., Abuzeid, M., El-Helaly, M. and Shehata, N. (2023), "The relationship between board gender diversity and audit quality in Egypt", Journal of Economic and Administrative Sciences, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JEAS-08-2022-0199