ESSAYS ON THE IMPACT OF BOARD GENDER DIVERSITY AND A FEMALE AUDIT COMMITTEE CHAIR ON FINANCIAL REPORTING QUALITY: EVIDENCE FROM VISION 2030 IN SAUDI ARABIA

Abstract

In light of Vision 2030, this research investigates whether gender-based corporate governance practices enhance financial reporting quality using two essays. The first essay investigates the effect of board gender diversity on financial reporting quality among Saudi Arabian listed firms. Using a sample of 41 firms from 2013 to 2024 and analyzed using multiple regression models, the findings confirm an average discretionary accrual, and board size is positively associated with financial reporting quality. The main finding of this paper is that the contribution of female board membership to financial reporting quality is statistically insignificant, suggesting that the presence of women on the boards in Saudi Arabia does not affect earnings management. In case of non-executive directors, however, there is a significant positive impact on financial reporting quality, emphasizing the importance of board independence. The second essay examines the impact of female audit committee chair on financial reporting quality among Saudi Arabian listed firms. Using a sample of 49 firm-year observations from 2013 to 2024, the findings indicate sustained variation in discretionary accruals across firms, reflecting heterogeneous earnings management practices. The result also reveals an insignificant impact of audit committee chair gender and female board representation on earnings management, and the interaction between these two governance mechanisms is also insignificant. In contrast, audit committee’s financial expertise is significantly associated with improved financial reporting quality. Overall, the results suggest that while female leadership in audit oversight remains an important objective under Vision 2030, its effectiveness in improving financial reporting quality may be constrained by institutional and contextual factors within the Saudi corporate governance environment.