Female board members, financial constraints, and internal control quality: New insights following COSO’s 2013 framework

This paper utilizes unique data on internal control (IC) from China to investigate whether and how female representation on corporate boards affects IC quality in the post-COSO 2013 era. We find that female board members enhance the quality of the IC system, especially the information & communication and monitoring components. We also find that reducing financial constraints serves as a mechanism through which this beneficial effect operates. These findings are novel and are expected to have profound practical and policy implications.