New PSU study highlights need for promoting greater gender equity in public accounting firms

Elizabeth Almer

Women have been entering the field of public accounting for over 30 years, and represent half of new hires. Despite the equal number of men and women entering the workforce, the number of women in high-level partner roles is significantly less than men.

2017 report by the American Institute of Certified Public Accountants found women represent only 22 percent of partners in CPA firms.

A new study from The School of Business at Portland State University examines the type of work conducted by female audit partners at some of the largest international and national public accounting firms. 

Accounting Professor Elizabeth Almer and colleagues published the study, “Partner Gender Differences in Prestige of Clients Served at the Largest U.S. Audit Firms,” in the Journal of Business Ethics. Using newly public data which names the audit partner who signs audit reports for public entities and non-profits, the researchers found that female partners disproportionately audit the lower prestige client types. This study confirms that significant disparities still exist at the highest levels between genders in public accounting firms. 

“As a faculty member who teaches many talented female students who plan to enter public accounting, I want to be able to tell them that they can achieve the same measures of success as their male classmates,” says Almer.

According to Almer, this research highlights the importance of understanding women’s career paths and whether there are critical decision junctures that seem to cluster women in certain types of work.

The study defined client “prestige” based upon client type and size. Publicly-traded companies are considered the most prestigious clients because they have high visibility in the marketplace, shorter reporting deadlines, more complex financial statements, and are at a higher risk for litigation. Benefit plans, investment funds and single audits are generally considered less prestigious. 

“Unless women are able to achieve the same measures of success as their male counterparts, there is still work to be done to ensure equity within their firms,” says Almer.

Understanding the disparities

The research findings contribute to the argument that firms need to carefully consider the goals of their employees and the opportunities that they are afforded, says Almer.  

“While progress has been made over the last 30 years to promote gender equity, U.S. public accounting firms continue to be ‘gendered organizations,’ which have historically favored men in terms of career advancement,” says Almer. “Gendered organizations still exist, in part, because of practices and policies — both formal and informal — that continue to reinforce inequality within the workplace.”

According to Almer, firms have strong formal policies to promote gender equity, and we are likely seeing the effect of more subtle informal practices.  Almer argues that the important question is whether women are actually choosing less pressured types of clients or whether they are being encouraged into it because of a perception that they desire more flexibility.

The path to partnership

Many public accountants aspire to become a partner in a firm, which is considered the highest honor in the field. 

For new graduates, achieving a partner-level position is a long path that often takes 10 to 15 years of work and requires a higher degree of individual dedication, flexibility and personal sacrifice.  Throughout this time period, there are many critical junctures where professionals begin to specialize in different types of clients.

“Firms are working hard to retain their experienced female professionals, some of whom express the need for more flexibility in their job,” says Almer. “But if they assign women to less demanding clients as a retention strategy rather than thinking about how to keep women on high profile engagements, there will be long-term consequences in terms of gender equity.” 

Closing the gap

The researchers urge firm leaders and decision-makers to address issues of inequity within their organizations by carefully examining how policy and culture may affect career advancement.

Almer’s research has implications for businesses outside of the field of accounting and could help other industries realize more work is needed to bridge the inequity gap.  

“Considering how decisions are made at different junctions in their career might lead to greater, long-term career success,” Almer says.

Coauthors of this study include Professor Mary Kathleen Harris of Washington State University and Professors Julia Higgs and Joseph Rakestraw of Florida Atlantic University.