BOARD ATTRIBUTES AND AUDIT EFFECTIVENESS: THE MODERATING ROLE OF GENDER DIVERSITY

Abstract

The study aims to examine the relationship between board characteristics and audit quality, with a focus on the moderating role of female directors in enhancing audit quality among non-financial companies listed on the Karachi Stock Exchange 100 (KSE-100) index. 70 listed non-financial companies were chosen from 2019-2023.  Audit quality is the dependent variable whereas Board independence, Female Directors and Board Size are independent variables. For control variables Firm size and auditor fee have been part of the study. By applying Correlation matrix and GMM regression this study shows a moderating role of gender diversity and portrays how board characteristics affect audit quality.  The study uses secondary data, collected from published annual reports of the selected companies. The findings highlight the significant moderating effect of gender diversity on the board independence and its positive impact on audit quality. The results underscore the importance of inclusive board structures and suggest that organizations should actively encourage female participation at the board level. Moreover, providing a supportive and conducive environment for female directors can contribute meaningfully to enhanced governance and audit outcomes. The findings of this study provide valuable insights for policymakers, regulators, and corporate leaders, emphasizing the importance of fostering gender diversity on boards to enhance audit quality. Encouraging female participation and strengthening board independence can serve as effective tools for improving corporate governance practices. Future research could expand the scope by including financial firms, exploring other governance variables, or examining the long-term effects of gender-diverse boards on financial performance and stakeholder trust across different sectors.