Audit committee diversity and corporate scandals: evidence from the UK

Craig McLaughlin, Stephen Armstrong, Maha W. Moustafa, Ahmed A. Elamer

Research output: Contribution to journalArticlepeer-review

12 Citations (Scopus)


This paper aims to empirically analyse specific characteristics of an audit committee that could be associated with the likelihood of corporate fraud/scandal/sanctions.

The sample includes all firms that were investigated by the Financial Reporting Council through the audit enforcement procedure from 2014 to 2019, and two matched no-scandal firms. It uses logistic binary regression analysis to examine the hypotheses.

Results based on the logit regression suggest that audit member tenure and audit committee meeting frequency both have positive associations to the likelihood of corporate scandal. Complementing this result, the authors find negative but insignificant relationships amongst audit committee female chair, audit committee female members percentage, audit committee qualified accountants members, audit committee attendance, number of shares held by audit committee members, audit committee remuneration, board tenure and the likelihood of corporate scandal across the sample.

Research limitations/implications
The results should help regulatory policymakers make decisions, which could be crucial to future corporate governance. Additionally, these results should be useful to investors who use corporate governance as criteria for investment decisions.

The authors extend, as well as contribute to the growing literature on the audit committee, and therefore, wider corporate governance literature and provide originality in that it is the first, to the knowledge, to consider two characteristics (i.e. remuneration and gender) in a UK context of corporate scandal. Also, the results imply that the structure and diversity of the audit committee affect corporate fraud/scandal/sanctions.
Original languageEnglish
Pages (from-to)734-763
Number of pages30
JournalInternational Journal of Accounting and Information Management
Issue number5
Early online date14 Oct 2021
Publication statusPublished - 22 Nov 2021


  • UK
  • corporate governance
  • corporate scandals
  • audit committee diversity
  • audit committee structure


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