Original Research Article | OPEN ACCESS
BOARD INDEPENDENCE AND FINANCIAL STATEMENT FRAUD: THE MODERATING EFFECT OF FEMALE GENDER DIVERSITY

O. J. Ilaboya, PhD, FCA , O. Lodikero, FCA

Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City, Edo State, Nigeria.; Accountancy Department, Rufus Giwa Polytechnic, Owo, Ondo State.;

For correspondence:-  O. Ilaboya, PhD, FCA   Email: ofuanwhyte@gmail.com

Received: 4 Oct 2017        Accepted: 15 Dec 2017        Published: 31 Dec 2017

Citation: Ilaboya, PhD, FCA OJ, Lodikero, FCA O. BOARD INDEPENDENCE AND FINANCIAL STATEMENT FRAUD: THE MODERATING EFFECT OF FEMALE GENDER DIVERSITY. Account Tax Rev 2017; 1(1):196-221 doi:

© 2017 The authors.
This is an Open Access article that uses a funding model which does not charge readers or their institutions for access and distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0) and the Budapest Open Access Initiative (http://www.budapestopenaccessinitiative.org/read), which permit unrestricted use, distribution, and reproduction in any medium, provided the original work is properly credited..

Abstract

We investigate the relation between board independence and financial statement fraud using female gender diversity as moderating variable. This is against the backdrop of the paucity of extant literature addressing the issue. The dichotomous nature of the dependent variable of financial statement fraud necessitated the use of the logit panel least square regression technique in estimating the coefficients of the regression variables. The data was sourced from a sample of seventy-five companies listed on the Nigerian Stock Exchange as at 31st December 2016. The sample was filtered from the one hundred and eighty-four firms listed on the Nigeria Stock Exchange as at 31st December of the same year. The regression analysis reveals a significant negative relationship between the explanatory
variables of board independence, female gender diversity and financial statement fraud. However, the joint effect of board independence and financial statement fraud did not produce the desired result. The relationship between the interactions of the two variables is positive and contrary to our apriori expectation of a negative relationship. Our evidence suggests that independent female board members may not necessarily advance the objective of quality financial reporting. It is recommended that female board members should be appointed as executive directors who may not exercise independence.

JEL Classification: G340

Keywords: Board independence, female gender diversity, hegemonic masculinity, homosociality, agency theory.


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