Board Gender Diversity, Capital Structure, and Earnings Management: The Moderating Role of the Audit Committee

Abstract

Background: Recurring financial-reporting concerns in Indonesia and mixed prior evidence on the governance determinants of earnings management create a need to clarify when monitoring mechanisms constrain managerial reporting discretion. The study addresses the gap concerning whether audit committee meeting intensity conditions the relationships of board gender diversity and leverage with earnings management in an emerging-market consumer-sector setting. Objective: This study examines the associations of board gender diversity and capital structure with earnings management and tests audit committee meeting intensity as a moderator. Methods: The unit of analysis is 266 firm-year observations (133 consumer cyclical and consumer non-cyclical firms × 2 years) listed on the Indonesia Stock Exchange during 2023–2024 and selected purposively. A centered moderated regression was estimated in EViews 13 using Stubben’s discretionary-revenue measure and White cross-section robust standard errors. Results: Board gender diversity is negatively associated with earnings management (β = −0.0244; p = 0.0158), whereas leverage is positively associated with it (β = 0.0500; p < 0.001). The board-gender-diversity × audit-committee interaction is not significant (β = −0.0050; p = 0.2674), while the leverage × audit-committee interaction is negative and significant (β = −0.0218; p < 0.001). Conclusion: Audit committee meeting intensity appears to constrain leverage-related reporting pressure but does not significantly amplify the board-diversity pathway. The study contributes a conditional governance perspective in which monitoring mechanisms are matched to the source of reporting risk.