On this, the most sacred of #AuditorProud days, we thought we’d tackle the recent CFA Institute report [PDF] that shows women are woefully underrepresented as lead engagement partners.
This data is available thanks to AuditorSearch and a hard-fought battle over the years to require partner naming on audit reports. Thankfully, that tattooing the client’s name on their ass idea never took off, so here we are relying on partner naming instead.
There are a few interesting takeaways from the report (depending on your definition of interesting), namely that women make up 15% of lead engagement partners of S&P 500 companies. That number drops to 11% for the S&P 100. According to the report, there are 70 unique female lead engagement partners of the S&P 500, as five have more than one engagement (two at EY, two at PwC, one at Deloitte, and none at KPMG). There are no female lead engagement partners with more than one engagement in the S&P 100.
Because we know how much you guys love measuring contests, here’s how female leads in the S&P 500 breaks down by firm:
- Deloitte 20.8%
- PwC 16.3%
- EY 12.9%
- KPMG 10.6%
FWIW, EY audits the most S&P 500 clients at 31%, followed by PwC at 30%, Deloitte at 20%, and once again KPMG rounding out the bottom at 19%.
Now for the S&P 100:
- PwC 15.6%
- KPMG 12.5%
- Deloitte 8.3%
- EY 7.1%
For the S&P 100, PwC holds the largest slice of audit clients at 32%, followed by EY at 28%, Deloitte at 24%, and KPMG at 16%.
Comparing the two demonstrates a decrease of 27% in female lead engagement partner representation for the largest S&P companies.
The report continues:
Women enter the accounting profession at rates similar to those for men. According to a 2008 AICPA Trend Report, new graduates hired by CPA firms in 2000 were 56% female and 44% male. AICPA’s 2017 Trends Report illustrates that over the last decade, the number of female hires by US accounting firms has decreased from a slight majority of 52% to a slight minority at 48%. The Deloitte report referenced above visually illustrates that leakage of the pipeline, rather than input into the pipeline, seems to be the problem for the Big 4 firms. Within 10 to 15 years (the time it takes to be a partner), the near majority of women in accounting turns into a significant minority. The accounting profession has sought to answer this issue, but it does not seem to be substantially improving across all firms.
Female representation at the highest echelon of behemoth public accounting firms has long been an issue that no one is likely to solve soon. As shown by AICPA research on women in leadership, the number of women partners only shrinks the larger the firm, and is trending down from already low numbers in 2015.
Of course, none of the above comes as a surprise. We already knew women are significantly underrepresented as audit partners, a statistic that is unlikely to change in this lifetime without a major shift in societal expectations that drive men to seek out powerful positions and women to save their loyalty for the tiny little humans they incubated in their bodies for nine months, regardless of career choice.