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.
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.
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;
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.
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.
The results indicate that female auditors report lower levels of gender discrimination when employed:
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.
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
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:
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.
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.
Ittonen, K., E. Vähämaa, and S. Vähämaa. 2013. Female Auditors and Accruals Quality. Accounting Horizons 27 (2): 205–228.
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.
Data and method used in the analysis:
The results suggest that