The Role of Gender Diversity in Corporate Governance for Quality Assurance of Financial Reports with Audit Fees as Moderating Variables


  •   Rakhmini Juwita


This study used audit fees as a moderating variable to examine how gender diversity on the board of directors, board of commissioners, and audit committee affects the quality of financial statements. In this study, financial statements for a sample of LQ 45 companies listed on the Indonesia Stock Exchange from 2019 to 2021 were employed to collect the data, which were then analyzed using Eviews 9. Gender diversity of the board of commissioners, board of directors, committee board audit, employed the percentage of the number of the board of directors, board of commissioners, female audit committee compared to the total number, audit fee to logarithmic audit fee, and quality of financial statements to proxy for Discretionary Accrual modified by Jones model. The findings demonstrate that gender and women play a key role in the Corporate Governance process, particularly on the board of directors, board of commissioners, and audit committee. The role of women in supervision, such as the board of commissioners and audit committee, was able to enhance the quality of the company's financial statements, despite the inability of the board of directors' to increase the quality of financial statements when examined. The role of women in supervision, such as the board of commissioners and audit committee, was able to improve the quality of the company's financial statements, despite the board of directors' ability to increase the quality of financial statements in their function not being examined. The role of audit fees also appeared to be pivotal in overseeing the quality of the presentation of the financial statements of the company. Service fees are procured for carrying out financial statement audit services and detecting the possibility of fraud committed by the board of directors. If the audit fee is compensated highly, it tends to be more professional, therefore minimizing Discretional Accrual and strengthening the supervision carried out by the board of commissioners and female audit committee. Similarly, it can enhance the quality of financial reports. The findings of this study will: (1) give investors, professionals, and stakeholders’ information about the factors that affect gender diversity; (2) give capital market authorities guidelines for taking into account gender diversity on corporate boards of directors, commissions, and audit committees while taking into account the effect on the quality of financial reports; and (3) help accountants in developing countries like Indonesia develop more suitable accounting guidelines. This study contributes to the gender diversity literature. Additionally, this study adds to and broadens the literature by presenting empirical data from a single emerging market, such as Indonesia, on the impact of audit fees and gender diversity between gender diversity and financial reporting quality, as this relationship has not previously been studied.

Keywords: Audit Committee, Board of Directors, Board of Commissioners, Gender Diversity, Quality of Financial Reports.


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How to Cite
Juwita, R. (2023). The Role of Gender Diversity in Corporate Governance for Quality Assurance of Financial Reports with Audit Fees as Moderating Variables. European Journal of Business and Management Research, 8(1), 93–99.