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  • Jennifer M Mueller-Phillips
    Antecedents and Consequences of Perceived Gender...
    research summary posted September 17, 2015 by Jennifer M Mueller-Phillips, tagged 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale, 05.10 Impact of Diversity - e.g., gender - on Group Decision Making 
    Title:
    Antecedents and Consequences of Perceived Gender Discrimination in the Audit Profession.
    Practical Implications:

    The authors’ findings provide public accounting firms with critical factors that can enhance gender equality. Specifically, the findings indicate that (1) firms that offer more support from organizational leaders, (2) firms that provide higher levels of support for alternative work arrangement initiatives, and (3) firms that provide stronger ethical climates are each negatively associated with perceived gender discrimination, suggesting that organizational climate factors have a strong impact on female auditors’ perceptions of gender equality. The findings suggest that female accounting professionals must reach high-status positions within the organizational structure to substantively influence perceptions of gender equality. Public accounting firms should encourage formal and informal mentoring relationships targeting female auditors. 

    Citation:

    Dalton, D. W., J. R. Cohen, N. L. Harp, and J. J. McMillan. 2014. Antecedents and Consequences of Perceived Gender Discrimination in the Audit Profession. Auditing: A Journal of Practice & Theory 33 (3): 1-32.

    Keywords:
    alternative work arrangements, audit profession, ethical climate, female partners, gender discrimination, organizational citizenship behavior, turnover intentions
    Purpose of the Study:

    The purpose of this study is to examine the effects of workgroup composition factors and organizational climate factors on perceived gender discrimination, along with the impact of perceived gender discrimination on several critical organizational outcomes. The authors test a theoretical model of perceived gender discrimination in order to;

    1. Advance theory development within gender-based research in accounting, 
    2. Stimulate future research related to gender equality in the audit profession,
    3. Provide public accounting firms with critical insights regarding the factors that contribute to gender inequality, and
    4. Highlight adverse organizational outcomes associated with gender discrimination in the audit profession.

    Turnover of female auditors leads to a loss of expertise, which, in turn, can reduce audit quality, leading to adverse organizational outcomes. In addition, recent evidence suggests that female audit partners more effectively constrain earnings management by their clients; however, female auditors are more likely than male auditors to leave public accounting prior to reaching the partner level. Therefore, gaining a better understanding of how perceptions of gender equality impact female auditors’ turnover intentions is particularly important. Existing research suggests that organizations that promote gender equality and gender diversity engender high-quality teamwork environments that foster creativity and innovation, resulting in higher levels of organizational performance. Therefore, given the relative importance of high-quality teamwork environments in the audit profession, the authors seek to gain a better understanding of the factors that impact perceptions of gender equality in the audit profession.

    Design/Method/ Approach:

    This paper tests a model of perceived gender discrimination in the audit profession. The authors obtained mailing lists of female CPAs from the Boards of Accountancy in Ohio, Oklahoma, Oregon, Tennessee, and Washington. Using both email and mail requests, the authors gathered a sample of 234 female auditors employed in public accounting firms. From the mail requests, the authors received a 17.1 percent response rate. From the email requests, the authors received an 8.1 percent response rate.

    Findings:

    The results indicate that female auditors report lower levels of gender discrimination when employed:

    1. In firms with more female partners,
    2. In firms with stronger ethical climates,
    3. In firms that are more supportive of alternative work arrangements, and
    4. In firms that provide higher levels of top management support for the personal well-being of their employees.
    • The findings indicate that while female coworker compositions do not impact female auditors’ perceptions of gender discrimination, female partner compositions can, in fact, increase perceptions of gender equality.
    • These results suggest that it is not sufficient for firms to simply hire/retain more females at the staff, senior, and manager levels; instead, the proportion of female auditors in partner positions within the organizational structure must increase to substantively enhance perceptions of gender equality.
    • The results indicate that public accounting firms can impact perceptions of gender equality by cultivating specific organizational climates.
    • The authors find that perceived gender discrimination is directly associated with higher turnover intentions, thereby providing additional motivation for the promotion of gender equality within the audit profession.
    Category:
    Audit Team Composition
    Sub-category:
    Impact of Diversity (e.g. gender) on Group Decision Making, Staff Hiring - Turnover & Morale
  • Jennifer M Mueller-Phillips
    Effects of Differences in National Culture on Auditors’ J...
    research summary posted November 24, 2014 by Jennifer M Mueller-Phillips, tagged 05.0 Audit Team Composition, 05.10 Impact of Diversity - e.g., gender - on Group Decision Making, 09.0 Auditor Judgment 
    Title:
    Effects of Differences in National Culture on Auditors’ Judgments and Decisions: A Literature Review of Cross-Cultural Auditing Studies from a Judgment and Decision Making Perspective
    Practical Implications:

    This study is important for audit firms because the authors imply that auditors’ cross-cultural differences do not only depend on which culture they come from, but also, on the national context of the countries in which the auditors reside (e.g., legal environment, auditing standards, tax issues) and other environmental factors (e.g., firm culture). By recognizing the effect of the social environment and adopting a dynamic constructionist approach in future auditing research, cross-cultural variation of auditors can be better understood, and audit firms will be better informed when designing intervention techniques to manage these differences affecting audit quality.

    For more information on this study, please contact Christine Nolder or Tracey J. Riley.

    Citation:

    Nolder, C. and T. J. Riley. 2014. Effects of Differences in National Culture on Auditors’ Judgments and Decisions: A Literature Review of Cross-Cultural Auditing Studies from a Judgment and Decision Making Perspective. Auditing: A Journal of Practice and Theory 33 (2): 141-164

    Keywords:
    Culture; ethics; risk; conflict; probability; bicultural; overconfidence; auditor judgment; diversity
    Purpose of the Study:

    In response to the shifting cultural makeup of audit staff and the importance of understanding its ultimate effect on audit quality, this paper summarizes the cross culture audit research and compares it with the broader cross-cultural judgment and decision making studies in psychology. To date, the cultural differences among auditors have not been fully understood, partially because researchers often rely on a somewhat outdated geographic trait approach. This approach assumes that each individual auditor internalizes only one culture, and this culture has a predictable impact on auditors’ judgments and decisions. The authors argue for a dynamic constructivist approach that recognizes that cross-cultural differences in judgments are heavily dependent on environmental factors that elicit different motivational and cognitive responses depending on culture.

    The authors also develop a framework that categorizes those auditor judgments and decisions most likely affected by cross-cultural differences.  The categories include:

    • Auditors’ confidence
    • Risk and probability judgments
    • Risk decisions
    • Conflict decisions
    • Ethical judgments
    Design/Method/ Approach:

    The authors discuss all relevant cross-cultural auditing studies from 1994 to 2014 in both auditing and accounting journals that examine the five categories mentioned above and relate them to key studies in judgment and decision making research in psychology. 

    Findings:
    • While psychologists have found that Asians (with the exceptions of the Japanese) are more overconfident than Americans or Europeans, no auditing researchers have examined cross-cultural differences in auditors’ overconfidence.
    • Psychologists, as well as most auditing researchers, have found evidence that supports the relationship between culture and risk and probability judgments.
    • Auditing researchers have found that auditors’ risk decisions might vary significantly depending on cross-cultural differences, but they all rely on individual traits instead of environmental factors in the analyses as compared with psychologists.
    • Auditing research that examines conflict decisions indicates that individuals from eastern cultures are more likely to acquiesce to clients and superiors than those from western cultures. This finding is consistent with psychological research.
    • While psychologists pay little attention to cross-cultural differences in ethical judgments, three auditing researchers have found some national differences and have emphasized the likely effect of task and environmental factors.
    • Overall, the majority of auditing studies employ the trait approach, and thus fail to consider expatriates or bicultural auditors’ judgments and decisions.
    Category:
    Audit Team Composition, Auditor Judgment
    Sub-category:
    Impact of Diversity (e.g. gender) on Group Decision Making
  • Jennifer M Mueller-Phillips
    Female Auditors and Accruals Quality
    research summary posted February 24, 2015 by Jennifer M Mueller-Phillips, tagged 05.0 Audit Team Composition, 05.10 Impact of Diversity - e.g., gender - on Group Decision Making, 11.0 Audit Quality and Quality Control, 11.07 Attempts to Measure Audit Quality 
    Title:
    Female Auditors and Accruals Quality
    Practical Implications:

    The findings imply that female auditors may have a constraining effect on earnings management and thus provide higher audit quality. In general, our findings indicate that the behavioral differences between women and men may have important implications for the quality of auditing and financial reporting.

    For more information on this study, please contact Kim Ittonen.

    Citation:

    Ittonen, K., E. Vähämaa, and S. Vähämaa. 2013. Female Auditors and Accruals Quality. Accounting Horizons 27 (2): 205–228.

    Keywords:
    Auditor gender, female auditors, gender differences, discretionary accruals, abnormal accruals, accruals quality, earnings management.
    Purpose of the Study:

    This paper examines the association between accruals quality and the gender of the firm’s audit engagement partner. Specifically, we aim to assess whether and how female auditors affect the quality of financial reporting. The motivation for this analysis is based upon the behavioral differences between women and men that have been extensively documented in the psychology and behavioral economics literature. In particular, we presume that gender-based differences in cognitive information processing, diligence, conservatism, overconfidence, and risk tolerance may have important implications for the audit process and auditor judgments and, thus, ultimately, for the quality of audited financial information.

    Design/Method/ Approach:

    Data and method used in the analysis:

    • Finnish and Swedish NASDAQ OMX-listed non-financial firms, covering the years 2005-2007.
    • We identify the gender of the engagement partner from the signature on the audit report, and  use abnormal accruals as a measure of the earnings quality and audit quality
    Findings:

    The results suggest that

    • firms with female audit engagement partners are associated with higher earnings quality
    • firms that change the engagement partner from male to female have significantly higher earnings quality in the subsequent year.
    Category:
    Audit Quality & Quality Control, Audit Team Composition
    Sub-category:
    Attempts to Measure Audit Quality, Impact of Diversity (e.g. gender) on Group Decision Making

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