Definitely could and probably is the problem. To change the coding you need to edit your language file. In the control panel, under Display Options choose Languages, click the Language Editor tab, and in "Choose Specific Language File" drop down and choose generic.php. The first option is charset - change it to utf-8 and update the file.
Be warned - changing the charset in this way can cause unbelievable encoding issues with your database, so when you view forums through a browser they can suddenly be filled with nonsense characters. You will need to look at your database and ensure that it is storing text as UTF-8, and you may have to run a conversion on the tables.
Is it possible you can have your host configure your server charset?
