Research Information System
JOURNAL OF FINANCIAL REPORTING AND ACCOUNTING, 2024 (ESCI)
PurposeThis study aims to examine how female directors on corporate boards and audit committees, and auditor affiliations (Big 4 versus Egyptian firms affiliated with foreign auditors), influence audit fees. This examination is driven by the global call for increased female representation in leadership roles and its potential implications for audit quality and financial transparency.Design/methodology/approachA sample of non-financial companies listed on the Egyptian Stock Exchange is used for the period 2011-2020. The authors used multivariate regression models, the Heckman two-stage and tokenism to support the analysis.FindingsThe results are threefold. First, this analysis reveals that female directors, whether on corporate boards or audit committees, are more likely to choose higher-quality audits in the form of high audit fees. Second, both Big 4 firms and Egyptian audit firms affiliated with foreign auditors are positively associated with audit fees and earn significant audit fee premiums. Third, a minor difference in audit fee premiums could be attributed to the existence of female directors.Research limitations/implicationsFuture research may expand the analysis performed in this study by investigating the characteristics related to female directors (e.g. education, experience and age) on audit fees.Practical implicationsThis study suggests insights for regulatory bodies, corporate decision-makers, auditors and corporate governance researchers. For instance, this study reveals that the Big 4 are not homogenous and provide different audit quality levels along with significant audit fee premiums.Originality/valueThis study extends and contributes to the growing literature on female representation in corporate leadership. First, this study adds to the limited research in Egypt by examining the effect of female board representation on audit quality. Second, this study adds to the extant literature on the gender of financial experts by demonstrating that female financial expert is more likely to demand high-quality audits. Finally, the results have significant implications for policymakers. For instance, this study reveals that the Big 4 are not homogenous and provide different audit quality levels along with significant audit fee premiums.