Title: The impact of board gender diversity in reducing abnormal accruals

Authors: Diana L.K. Ssekiboobo; Godfrey Akileng; David Namanya

Addresses: College of Business and Management Sciences, Makerere University, University Rd., Kampala, Uganda ' College of Business and Management Sciences, Makerere University, University Rd., Kampala, Uganda ' College of Business and Management Sciences, Makerere University, University Rd., Kampala, Uganda

Abstract: The purpose of this study is to examine whether board gender diversity reduces abnormal accruals. This study provides evidence from 2016 to 2020 of listed firms in developing Sub-Saharan African countries. Panel data analysis is carried out on the relationship between abnormal accruals and board gender diversity. Board gender diversity is composed of the proportion of female executive directors, female non-executive directors and total female directors. The findings show that abnormal accruals reduce in the presence of females on the board especially non-executive female directors. This supports the notion that female directors specifically the non-executive directors on the board exercise their independence through accounting conservatism, improved board governance and monitoring. This reduces information asymmetry which in turn curbs earnings manipulation in firms leading to improved quality of earnings. This study contributes to board gender diversity as a major factor in the improvement of financial reporting quality in developing capital markets. Eventually, this will have strong implications on policy, regulation and academia.

Keywords: board gender diversity; abnormal accruals; board independence; accounting conservatism; Sub-Saharan Africa.

DOI: 10.1504/IJGFI.2023.131481

International Journal of Governance and Financial Intermediation, 2023 Vol.1 No.4, pp.315 - 350

Received: 23 Aug 2022
Accepted: 26 Nov 2022
Published online: 14 Jun 2023 *

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