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    The Integration of Women and Minorities into the Auditing...
    research summary posted November 17, 2014 by Jennifer M Mueller-Phillips, tagged 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale 
    The Integration of Women and Minorities into the Auditing Profession since the Civil Rights Period
    Practical Implications:

    The auditing profession has been at least as successful as other comparable professions at integrating women and members of most minority groups. However, despite relatively good pay for black workers in auditing, blacks have been persistently underrepresented among auditors. Some have proposed that the underrepresentation of black workers in the auditing profession has been caused by a shortage of qualified black applicants as a result of either a lack interest in perusing accounting degrees among black students choosing college majors or low graduation rates among black students pursuing accounting degrees. The evidence in this study is inconsistent with these claims and suggests that black underrepresentation in the auditing profession can be traced to the time at which college graduates with accounting degrees take their first jobs. The findings are insufficient to confidently identify the cause of black underrepresentation in the auditing profession, but they suggest that the efforts of the auditing profession to attract black workers are likely to be most fruitful if they focus on identifying why relatively abundant black college graduates holding accounting degrees are not entering the auditing profession, and how this pattern can be reversed. 


    Madsen, P. E. 2013. The integration of women and minorities into the auditing profession since the civil rights period. The Accounting Review 88 (6): 2145-2177. 

    occupational diversity; occupational integration; Current Population Survey; National Survey of College Graduates; Higher Education Research Institute Freshman Survey.
    Purpose of the Study:

    Following the Civil Rights Movement and the ‘‘quiet revolution’’ in women’s work over the years from 1950 to 1970, women and minorities increasingly joined the auditing profession while the profession ramped up efforts to encourage integration. The purpose of this study is to rigorously examine how the integration of auditors has evolved since the civil rights and quiet revolution period to inform policymakers in the auditing profession about the status of the profession’s integration efforts and to explore how resources devoted to increasing the integration of the profession might be most effectively used. The study examines the representation of women and minorities at three stages along the pipeline supplying new auditors: as they enter college, as they graduate from college, and as they enter the workforce. The primary distinctive feature of this study is that it evaluates the auditing profession’s integration by comparing it to samples of occupations similar to auditing for the purpose of isolating auditing-specific forces influencing integration.

    Design/Method/ Approach:

    The study’s main tests use survey data collected from random samples of individuals in the United States each year from 1968 to 2010. Data for supplementary tests come from surveys of random samples of incoming college freshmen conducted each year from 1971-1999 and college graduates conducted in 1993 and 2003.

    • Replicating prior work, the study finds that female and minority workers across the entire labor force are paid poorly relative to men and non-minorities even after controlling for a number of worker characteristics.
    • However, pay for women and minorities working as auditors is not significantly different from pay for men and non-minorities working as auditors.
    • Poor pay in the labor market generally speaking, combined with equal pay in auditing, means that women and minorities might be expected to enter the auditing profession at high rates to take advantage of the better pay available to them in the auditing profession. The study examines the representation of women and minorities in the auditing profession by comparing it against other similar professions. It finds that, relative to similar professions, women, Hispanics, and misc. minorities are well represented in the auditing profession as might be expected given the relatively high pay. However, black workers have been persistently underrepresented in the auditing profession. This is an anomaly given that black workers receive relatively high pay in the auditing profession.
    • The study includes supplemental analyses to examine potential explanations for the underrepresentation of black workers in the auditing profession. It finds that the accounting major is popular among black college freshman, ranking ahead of more than 80% of other college majors in terms of black representation. Black college graduates also received accounting degrees at relatively high rates, ranking ahead of more than 58% of other college majors in terms of black representation. However, black accounting graduates enter the auditing profession at disproportionately low rates, making up fewer than 34% of auditors under 31 years old. 
    Audit Team Composition
    Staff Hiring - Turnover & Morale