Female Auditors and Accruals Quality

This paper examines the association between accruals quality and the gender of the firm's audit engagement partner. In particular, given the documented gender-based differences in diligence, conservatism, and risk tolerance, we postulate that female auditors may improve accruals quality. Using a sample of Finnish and Swedish NASDAQ OMX-listed firms, we run several alternative panel regressions of abnormal accruals on female auditor variables and firm-specific controls. The results suggest that firms with female audit engagement partners are associated with smaller abnormal accruals, thereby implying that female auditors may have a constraining effect on earnings management. In general, our findings indicate that the behavioral differences between women and men may have important implications for the quality of auditing and financial reporting.