Accounting firms often rank highly for their gender equality efforts but new research suggests that while this may be true in lower positions, women are substantially underrepresented in higher positions. Women make up just 17 percent of audit partners of U.S. audit clients, according to the new report, and in major U.S. metropolitan areas like San Jose and Washington, D.C., the number is closer to 10 percent.

The analysis from researchers at Bentley University, University of Colorado Denver and Northeastern University was enabled by a new rule from the U.S. Public Company Accounting Oversight Board that requires accounting firms to disclose the name of the partner in charge of each public company audit. 

In the past, accounting firms were praised for their gender equality efforts but much of that progress has been limited to the lower ranks, the new research shows.

For example, the Big 4 accounting firms (PwC, Deloitte, Ernst & Young, and KPMG) all report having more than 40 percent female employees but the new data reveals that in these firms only 19 percent of audit partners are women. PwC has the highest representation of women audit partners (22 percent) and KPMG the lowest among the Big 4 (15.3 percent). At non-Big 4 audit firms, the representation of women as partners is even lower, at 15 percent, the new research found.  

The research also found:

• In states that voted for Republican presidential candidates in the last four elections, which are dark red in the graphic below, a mere 14 percent of audit partners are female.
• In  states that voted for Democratic candidates in the last four presidential elections, indicated in dark blue, more than 20 percent of audit partners are female.
• Within major metropolitan areas, female audit partners are most common in Minneapolis (32 percent), Los Angeles (24.1 percent), Boston (22.5 percent), and New York City (21.7 percent).
• Female audit partners are least common in San Jose (9.7 percent), Washington, D.C. (10.9 percent), Atlanta (11.6 percent) and Philadelphia (12.2 percent).

While the current representation of women at the partner level is underwhelming, some accounting firms have made noticeable progress in promoting qualified female talent. In 2015, Deloitte named its first female CEO, Cathy Engelbert, and in 2016, PwC’s newly inducted audit partner class was 30 percent female.

The research was conducted by Bentley University Rhodes Professor of Accounting Rani Hoitash, Professor Jenna Burke of the University of Colorado Denver, and Professor Gary Gregg and research fellow Udi Hoitash of Northeastern University.

To read more about the research, visit: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2989166