Purpose:Readable financial reports help users make better decisions and reduce information asymmetry. The presence of women on the audit committee leads to the provision of more accurate and useful financial reporting information for stakeholders, which can influence the readability of financial reports. Gender diversity in audit committees varies among companies with different levels of female executives. Given the potential impact of female executives on audit committee diversity and financial reporting readability, this study aims to examine the effect of gender diversity in audit committee membership on the readability of financial reporting, with the moderating role of board gender diversity.

Method:To test the research hypotheses, data from 107 companies listed on the Tehran Stock Exchange over the period 2016 to 2023 were extracted. Pooled regression models were employed to examine the hypotheses.

Findings:The results indicate that board gender diversity reduces the readability of financial reports. Furthermore, the findings suggest that board gender diversity does not influence the relationship between audit committee gender diversity and financial reporting readability.

Conclusion:The presence of women on the audit committee, due to their risk aversion, leads to greater attention to standards and compliance in financial reporting. This may involve longer sentences and more complex wording, thereby reducing the readability of financial statements. In addition, since the board of directors operates at a macro‑policy level while the audit committee has a more specialized and technical role in reviewing report details, board gender diversity does not affect the relationship between audit committee gender diversity and financial reporting readability.