Abstract
We examine the influence of gender diversity on financial reporting quality using Kanter’s framework of group composition. Purposely, we categorize the board as skewed board, tilted board and balanced board, and examine the influence of each board on reporting quality. To test the hypotheses, the study employed ordinary least square regression method and as a robustness check, used critical mass theory and generalized method of moments estimation. We further use the presence of female directors in audit committee as an additional measure of diversity. Overall, we report that gender diversity is positively associated with financial reporting quality; however, higher influence is observable in case of titled board having at least 35% female directors on board, whereas the highest influence is found in case of balanced board with more than 35% female on boards. Moreover, our results also indicate higher financial reporting quality in case of presence of women in audit committee. Overall, our results provide empirical support to the Kanter’s framework of board composition and critical mass theory, and highlights the positive influence of gender diversity on the governance structure of the firm.