As mandated by Sarbanes-Oxley Act, firms must disclose material weaknesses in internal controls. This study extends the body of accounting research that seeks to identify the factors associated with such disclosure. Drawing upon gender research in the behavioral sciences, we argue that female audit committee members examine internal controls more critically and thoroughly than their male counterparts; hence, firms with females in these positions are more likely to report problems. A logistic regression model of material weakness disclosure is developed that includes, as a predictor variable, proportion of females on the audit committee. Results support the proposed relationship.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics