Literature Review Regarding the Roles of Females in Accounting Globally

The rate of progression of females to partner level in accounting firms is becoming an increasingly important topic within the profession. With the majority of entrants,….%(___) to the profession now female, the retention and development of women should be a priority within the industry in order to both comply with the law and determine the future of the industry. Literature surrounding this field has failed to pinpoint a primary reason for this. Mixed views on …. However, it is apparent that the issue has been recognised within the industry as measures are being taken in order to improve the situation. But whether these measures are adequate…..has been discussed within the literature.

The following chapter will examine the main research regarding the roles of females in the accounting industry globally, evaluating the key matters. The areas which will be investigated include the progression of women in accountancy, the barriers that have been faced and the measures being taken to improve the future for females in the industry.

The remainder of the chapter is organised as follows; Section 2 will briefly summarise the main arguments regarding the current position of females in the sector and reasons as to why this may be. The next section will focus on women in more senior positions in accountancy, particularly as partners and directors, and will review relevant…analysing the possible reasons for the…. Section 4 will look at the flexibility of work arrangements for females in the sector and how this may have a direct or inadvertent impact on the findings in the previous chapter. The final part of the chapter will look towards the future of the profession and whether there is a genuine restriction and what steps are being taken to…..

2.1 The glass ceiling

“Artificial barriers based on attitudinal or organizational bias that prevent qualified individuals from advancing upward in their organization into management-level positions.” Department of Labor (1991)

Invisible but real barrier through which the next stage or level of advancement can be seen, but cannot be reached by a section of qualified and deserving employees. Such barriers exist due to implicit prejudice on the basis of age, ethnicity and/or sex. Although generally illegal, such practices exist in most countries. – Business Dictionary

[The glass ceiling in accountancy has only been documented recently, following the increased acceptance of females into the sector. On the surface women are made to feel as though there is a clear path to progression and promotion but reach a point where they cannot go any further. The glass ceiling theory exists due to laws which prohibit such obvious discrimination, yet the glass ceiling effect seems to operate as a form of implicit discrimination in firms. ] Dambrin and Lambert (2008) note that the profession initially marginalised women from a horizontal segregation, rejecting them from outside the industry, then moved to a vertical segregation; where women are allocated subordinate positions as the more prestige positions remain the domain of their male collegues. This supports the idea that there remains a glass ceiling for women in their hierarchical progression in these firms.

Danziger and Eden (2006) support this point, arguing that the glass-ceiling blocks even qualified womens advancement into senior positions in organisations. Social beliefs about gender roles have resulted in this discrimination between sexes, even when women prove themselves to possess similar education, skills and competence levels of their male colleagues.

Similarily, Broadbent and Kirkham (2008) emphasise the difficulty that remains for women to progress to partnerships in accountancy. However, they acknowledge that some women are able to break through the glass ceiling to then discover that they have simply made it to a glass cliff. This suggests that even if a woman does make it to the level of partner she is at a higher risk of losing her job should something go wrong, than her male colleagues.

2.2: Women in the Accounting Profession

[Females entering traditionally male dominated occupations has significantly increased in the last few decades. Since 1986 over half of accounting degree graduates have been female (AICPA, 2004). This change was partly due to a rise in the number of females being provided with the opportunity to study accountancy, previously a male dominated subject. It has recently been recorded that an overwhelming majority of 61.1% of all accountants and auditors are female, Catalyst (2009). With it being estimated that women form over half of all accountants, (xyz….) With this in mind, the progression of women is key in determining the future of this crucial sector.

This dramatic rise of females in the sector has not been replicated in the number of females being promoted to partners within firms. Hull and Umansky (1996) identify that women have and continue to carry an enormous load. Many women exceed what is required in order to land an opportunity for a top position, only to find a glass ceiling between them and their goal (Morrison et al., 1987). This glass ceiling is not simply a barrier for women as individuals but as a whole. This questions the abilities of women to manage in positions of extreme responsibility and prevents them advancing and progressing, purely based on their gender and not their capabilities. The individual capabilities of women within a working environment are being overlooked purely because of their gender.

Baird et al., (1998) highlights that previous research has not only identified that female accountants are equally committed to their occupation, but are also as upward striving towards career progression and advancement. Trapp (1989) supports this and further insinuates that women may actually show more commitment than males towards their careers. However, some researchers have reported that women accountants are in fact less committed than their male equivalents (Aranya et al.1986). This difference in opinion regarding employee commitment bases a strong foundation for why there may be a disagreement in reasons why…

Danziger and Eden (2006) propose that women who aspire to work in male-dominated occupations are relatively more assertive, goal-oriented and ambitious than other women. A study conducted by them on accounting students throughout school years found that the occupational aspirations of both sexes changed throughout the years. However, the results indicated that for women the change between the beginning and end of their academic studies was considerably greater than for men (0:79 for women versus 0:34 for men)

These results can be interpreted as although in the earlier years both sexes shared similar aspirations, women later …..

2.3: Women as Directors/ Partners

Turning now to the issue of women as partners within accountancy, the progress achieved and the situation as it currently stands. Although the number of women that have entered the accounting profession has seen a considerable increase in the last few decades, the number of accounting firm partners that are female has not gone up in proportion to this rise. There have been numerous reasons given for these statistics ranging from women s abilities to their commitment to the job. Some of these reasons are further considered in this chapter.

Despite the fact that female accounting students outperform their male counterparts within the classroom (Pillsbury et al., 1989), there is still a large under-representation of women in top positions in accounting. AICPA (2004) estimates that a disproportionate 19% of accounting firm partners are currently women, with some large accounting firms only promoting 12% of women to the position. These figures are highly inconsistent with the number of female entrants and employees in the profession. Twenty years ago, women becoming partners in a firm was a rare occurrence (Charter, 2009) and although there has been an improvement, the pace is questionable.

Fig1. Educational Achievement of Accounting Students (Catalyst, 2009)

There also appears to be a disparity in the way that male and female accountants view a female s opportunities in reaching partner level. It has been found that fewer female accountants expected to reach partner position within their careers than their male counterparts, a contrast of 38 percent to 51 percent, Lathan, Ostrowski and Pavlock (1987). One reason women perceive there to be fewer opportunities is when other factors are accounted for, particularly parenthood.

The higher turnover rate of female employees combined with the difficulties firms face in retaining their female staff has also been blamed for the lack of promotion to partner level. Trigg et al., (1997) identify this as a possible reason for the figures, claiming with fewer women available to promote the statistics are inevitably going to show a…toward males.

It has been discovered that in some cases higher levels of management still perceive women as being less committed to a firm because of factors such as maternity leave. They assumed that once a female employee had children, she would not return to work. Windsor and Auyeung (2006) contend that when women are viewed for promotion, their parental status is considered more negatively than that of their male counterparts. Firm partners have disclosed that due to factors such as these, they choose to invest less time developing female employees Trigg et al., (1997). This is a dangerous assumption to make and essentially just a mistaken belief as a study undertaken in 1994 showed that 89% of women actually returned to work after maternity leave (Coolidge, 1994). 94 2010 current economic climate women cannot afford to stay at home….

Hull and Umansky (1997) discussed a study in which the role mix of practicing male and female accountants was investigated. It was found that both sexes were remarkably similar with women in employment conveying no less concern for their careers than men in the same occupation. This is a highly important factor in …..the misconception that women are any less dedicated to their careers than males, one reason given for the lack of enthusiasm but higher management in developing them. A considerable amount of additional studies have been undertaken which show that women and men in management have similar aspirations and behaviours.

Most importantly, (Cohen and Single, 2001) Cohen et al. (1998) argue that retaining women in professional positions of management is fundamental in ensuring a greater diversity of ethical perspectives in accounting firms, an area of upmost importance in the industry.

Table 2.0 Women as Partners in the Big Four

Accounting Firm

The issue is that although the gender mix of the profession has shifted from a predominance of men to a predominance of women, it remains that this is the case at all but the highest levels.

2.4: Flexible Work Arrangements- work/life balance

Turning now to the issue of flexible work arrangements and the importance of the subject in the retention of female employees. Flexible work arrangements was introduced in…..(brief fact/date/reason)

Smith et al. (20..) defines the work-life balance as people spending sufficient time at their jobs while also spending adequate time on other pursuits, such as family, hobbies, and community involvement . It has not been a very long time since the introduction of flexible work arrangements in accounting firms, with all public accounting firms adopting flexible work arrangement policies in the early nineties. Although flexible work arrangements are open to men and women, the overwhelming proportion of participants in these programs are women (Cohen, 1997).

In part, firms have done this in order to fulfil an ethical obligation in creating an appropriate professional environment for their employees, particularly females. The participation in a flexible work arrangement program had been noted to impact on an individual s professional accomplishments and the anticipated turnover, especially by fellow employees and more importantly senior management. (Cohen and Single 2001). If participating in a flexible work arrangement has negative attributes in the eyes of colleagues and management, this may either deliberately or indirectly, result in an advantage for employees who do not participate in such programs. As women are more likely to undertake flexible and part time working patterns, this will directly impact perceptions of them as employees. Employee perceptions that reduce working hours could mean an end to their career advancement. This is supported by a study conducted by Cohen and Single (2001) in which individuals who participated in flexible work arrangements were likely to be viewed as less likely to receive advancement and more likely to leave the firm. Firms that offer flexible work arrangements, in an effort to overcome problems, have to deal with employee perceptions that reduced hours arrangements mean an end to career advancement.

*Catalyst (2009) Higher rates of turnover of women, particularly in public accounting, has forced accounting firms to look at ways to ensure the professional development and environment for women is made easier. Baird et al note that with women comprising approximately half of all accounting graduates, the high levels of female employee turnover poses a large concern to companies (1998). This is both due to the cost of losing quality employees for firms and the reflection of the firm itself in its inability to retain women.

*In public accounting, the firms have responded to the statistics with not only flexible work arrangements, but other attempts including mentoring programs to keep women in their ranks and increase the number of women at the partner level, (Baird et al, 1998). Although progress has been slow, it shows that the problem has been addressed and necessary steps are being taken in order to address the issue.

*Maupin (1993) found that among accounting students, more females expected problems coordinating work and family responsibilities and fewer women expected to be working full-time ten years after graduation. This highlights the concern and importance of managing work and family for females, even before having entered employment.

Cohen and Single (2001) suggest that one effort to counter the difference in gender rate in turnover and promotions among multinational public accounting firms has been to adopt flexible work arrangements. In part, the firms are doing this to fulfil an ethical obligation in creating an appropriate professional environment for their employees because, as stated about why Deloitte and Touche adopted a flexibility program it was ethically the right thing to do to fulfil our obligation to the people of the organization to provide them with the maximum opportunity to realise their full potential as professionals. Cook (1999).

Cohen and Single (2001) undertook a study into the effects of participating in flexible work arrangements may have on employees. The results indicate that taking part in a flexible work arrangement has a negative effect on an individual s professional success in accounting.

*A study conducted by Reed et al. (1994) found that in the women who were the most satisfied with their jobs, and did not consider leaving, experienced the most intense feelings that their job and family were in conflict.

2….: A Woman in a Mans world

The boys network is still very strong in the… accounting environment.

You have to spend many out of office hours i.e. after 5 pm in the office, not necessarily working but showing the flag and chatting with the boys/bosses .

Female Accountant in study by Whiting and Wright (2001)

There remains an ongoing culture of laddish behaviour in traditionally male orientated occupations. Networking with colleagues and clients is regarded as a highly important part of being an accountant. Kirkham (1997) suggests that accountants may feel pressured into participating in a culture of becoming members of clubs and networks in order to gain access to organisational knowledge. Likewise, Windsor and Auyeung (2006) imply that promotion in large accounting firms is linked to the amount of client fees brought into the firm. If client fees are jeopardised by other responsibilities, such as family, it is likely to impact on career advancement prospects. For women to advance they have to gain access to these male oriented clubs, networks and organisations that in the majority of cases are not only hostile to women but even exclude them.

Furthermore, women choose not to participate in the networking opportunities with their male colleagues such as golf days, sporting events and drinking sessions, yet these opportunities are……in the informal track to promotion which remains inaccessible to women.

“You had to be part of the gang. They took networking really seriously. They see it as seriously affecting their profits” (BBC, 2001)

Stanko and Schneider (1999) interviewed female accountants on their experiences within accountancy. A number of respondents made reference to the phrase, good old boys with reference to the culture at the top. Comments such as: Until firms disband the old boys network of excluding women, there will continue to be problems. . . . This [accounting profession] is still an old boy s club . One accountant felt that after a number of years women would become more aware of the likelihood of progression to partner and compared the chances equivalent to that of a snowball in hell.

The indirect discrimination remains with male staff routinely receiving invites to golf and baseball functions with no women allowed. Kirkham (1997) goes as far as to describe this behaviour as sexual harassment as it is about intimidation and power relationships. The gender of the accounting profession is not simply how many or what proportion of women are included within it but also a consideration of where those women are located and how they are treated (Kirkham and Loft , 1993).

*Reed et al (1994) Women were also said to be unacceptable to clients who did not wish to be audited by a female and unacceptable to male co-workers who did not like being supervised by a woman

Reed et al (1994) discuss the outcome of the Price Waterhouse v. Hopkins, 1989 sex-discrimination case, and note that stereotyping is most likely to occur when the target is an isolated individual in an otherwise uniform environment. The Supreme Court, which ruled in favour of Hopkins, observed;

We sit not to determine whether Ms Hopkins is nice, but to decide whether the partners reacted negatively to her personality because she is a woman It takes no special training to discern sex stereotyping in a description of an aggressive female employee as requiring a course at charm school . Nor does it require expertise in psychology to know that, if an employee s flawed interpersonal skills can be corrected by a soft-hued suit or a new shade of lipstick, perhaps it is the employee s sex and not her interpersonal skills that has drawn the criticism .

The case highlighted an important catch 22 that women are placed in. Their positions may require them to show a degree of aggressiveness yet their employers may object to this. Either way, leaving women out of a job if they behave in a manner undesirable to their employer or if they behave in a manner which does not enable them to fulfil a role like their peers.

Whiting and Wright (2001) further support this idea an aggressive attitude is a prerequisite for success in the profession, suggesting that female accountants may need to display stereotypical masculine characteristics in order to advance.

We had no female partners and I felt having a family was a definite barrier to achieving partnership. Staff were expected to attend…social networking functions after hours and when one mother I worked with commented that this wasn t practical for her, one of the male partners said maybe you shouldn t be here then .

Female accountant questioned (Whiting and Wright, 2001)

** Danziger and Eden (2006) conducted a study to find out whether the career aspirations of male and female accounting students changed as they progressed through…. The findings supported the hypothesis. In their freshmen year, the sexes shared a similar pattern of

aspirations and goals. However, during their later academic years, females reduced their occupational aspirations and revealed a stronger preference for a convenient balance between work and other facets of life. Logistic regressions demonstrated the statistically significant effect of the interaction between gender and academic year on student occupational aspirations and career-style preferences.

As one female respondent stated: Until more women become partners things will not change. Part time partnerships will have to become the norm .

**Catalyst (2009) Women and men have different career goals. This may be due to the fact

that women often cannot commit financially or take the time to focus on a partnership track due to work-life balance issues, stereotyping in the workplace, or face challenges such as networking difficulties or lack of female role models.

2….: A Difference of Opinion?—– remove? Merge with previous?

The disparity in the career expectations of male and female accountants may be blamed as one of the reasons that females are less satisfied with the results of their careers. The restrictions faced by females in the accounting industry are perceived differently by males, resulting in an inevitable difference in levels of satisfaction.

Trapp (1989) found that although both genders felt men and women were equally competent to perform on the job, there was an obvious inconsistency between male and female accountants perceptions of a woman s chance of making partner. The women rated the chances of their sex achieving the position of partner significantly lower than men rated a woman s partnership opportunities. This indicates that women are aware of more barriers to promotion to partnership rank than men think they have. Whether or not this is true, it is important in understanding that men either have an idealistic view of the situation that women face, or that women restrict themselves by assuming they face more difficulties than their male colleagues.

Prior research has also acknowledged that there are numerous differences in career-related expectations of male and female accountants, which could result in differences in job satisfaction, job commitment, and staff turnover. Generally, the research appeared to indicate that women felt they had fewer advancement opportunities and more career-related conflicts with areas including family responsibilities, than their male counterparts (Baird et al., 1998)

**In contrast, Wilkinson (2005)(azure group) gives a rare argument in implying that women today have different circumstances, suggesting that women are assessed on their abilities equally with their male counterparts and gender is no longer a key issue. Although this notion is not strongly echoed, there is still evidence that women are still sometimes perceived to have no glass ceiling or restrictions to progression in accountancy.

2.5: The future of Accountancy.

Many initiatives have been developed in order to combat the key issues in accountancy facing women. These include the retention, advancement and the opportunity of a better working environment (i.e. flexible work arrangements)

**Broadbent and Kirkham (2008) suggest that the continuous changes of the profession will provide equality for women in due course. The Big Four accounting firms have displayed a commitment to gender diversity and there is some evidence they are seeking to address the issue. PWC has a Gender Advisory Council, Deloittes have a Women s Initiative in the US (there doesn t appear to be a UK equivalent), Ernst & Young note their commitment to diversity celebrating their achievements in a range of benchmark awards (Opportunity Now s Gender Diversity benchmark as well as Stonewall s listings), the KPMG Annual Report 2007 notes the firm s commitment to diversity and also highlights the women s diversity programme, which is seen as a practical solution to the problem that the 13 per cent proportion of women partners remains stationary. However, despite the efforts of these firms evidence of a gap remains between women s experiences and the formal efforts to create equality.

* Trigg et al. (__) make an extremely valid point in recognising that not only do accounting firms need to implement programs such as those listed above, but management must believe in them in order for them to work. Plans implemented to retain women accountants require a lot of planning and time, which is likely to result in further expenses. Accounting firms that have implemented these programs have considered their decision to be a sound business decision (Trigg et al.__). Some of the formal programs that can address the upward mobility for women are flexible scheduling, child care and mentoring. Flexible scheduling can consist of part-time work, work at home or job-sharing but once flexible work schedules have been put into place, women should still be given challenging assignments and not just “written off” (Higham, 1994). It is much less expensive to adjust current employee’s hours than it is to train new employees (Coolidge, 1994).

The accounting profession may benefit from looking at measures taken in other industries globally regarding the advancement of women. For example, Norway has made it a policy to correct the imbalance at the top and has introduced legislation that requires at least 40% of all corporate board members be women. Although not directly related to accountancy, the legislation has positively affected several industry types.

2.6: Literature Review Conclusions

While prior research on the gender differences of accountants has produced some conflicting results, the majority of studies undertaken indicate that although both men and women in accounting are equally committed to their careers, women are more likely to be unsatisfied with their jobs. The reason has often been identified as a lack of advancement opportunities in comparison to their peers.

The overwhelming majority of research suggests women need flexible working hours in order to raise a family or simply cannot cope with the demands of the profession, an ideal perspective of the employers and not the only restriction for women. As seen in section 2.4, very little has been mentioned with regard to the general culture of the profession, particularly with regard to networking events and the exclusion women face in the choice of where companies choose to hold these meetings. The glass ceiling appears to be very much intact even though women have proven their academic and employment capability to be as good as if not surpass their male peers.

The literature identifies several reasons as to why women are not advancing to partnership ranks. It has even been suggested that it just requires a matter of time and the trickle up effect will eventually result in women being appointed these positions. As women have fairly recently been accepted into accountancy, there seems to be an underlying perception that they must……..???

The lack of legislation could be a reason this indirect discrimination is being allowed to occur in these firms,