Auditors' gender differences and client portfolios

In this study, we examine whether and how gender of engagement audit partners affects client acceptance decisions. Using a sample of 2,767 firm-year observations of firms listed on the Australian Securities Exchange (ASX) from 2013-2014, we empirically investigate and compare the riskiness of clienteles between female and male auditors. The results indicate that on average female auditors have less risky clients in their client portfolios than male auditors. Furthermore, the negative association between female auditor gender and the level of risk in clienteles is more pronounced among the riskiest group of clients. The findings of this study suggest that gender differences between auditors may have important implications for client acceptance decisions and that such differences are more likely driven by high-risk engagement decisions.