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Gender Bias in Accounting

GENDER BIAS IN ACCOUNTING 19

Outline

1 Introduction 5

2 Gender Bias in Accounting 5

2.1 Gender Bias 5

2.2 Statistics of Women in Accounting Compared to that of Men 7

2.3 Gender that Faces Bias in the Accounting Profession 8

2.4 Proof of towards Women 9

2.4.1 Payment. 9

2.4.2 Promotion. 11

2.4.3 Representation in leadership positions. 12

2.4.4 Consideration for partnership. 14

2.5 Women are Equally Competent as Men in the Accounting Profession 15

3 Conclusion 17

4 References 19

Summary

The prevalence of gender bias in accounting is irrefutable. Theprejudice is apparent towards female accountants. Regardless of thefact that female accountants make up more of the employees in theaccounting industry, they are unable to advance in their professiondue to gender discrimination. Women have made tremendous efforttowards venturing into careers previously considered male dominated,like accounting. Research indicates that females graduate with highergrades in accounting degrees than men.

Nevertheless, women progress to face gender discrimination inpayment, promotion, leadership positions and consideration forpartnership. It is normal for payment to differ depending on therank, industry and payment systems used by a company. However,research on the accounting industry demonstrates that some accountingfirms pay male employees higher than females. Such companies havepayment structures that result in females earning less returns andcommissions. Workplace promotions should be based on the competenceand contributions of an employee. Despite the fact that both men andwomen join accounting firms as entry-level workers, men are promotedat a higher rate than women. Leadership positions in the accountingindustry are mainly given to male accountants. Some accounting firmsassume that women are incapable of meeting the demands of aleadership position in the accounting career. In addition, althoughwomen comprise of a higher percentage of the working population inthe accounting industry, they are rarely considered as partners byaccounting firms.

Female accountants should not be treated with prejudice because theyare equally or more competent than male accountants. The fact thatfemales graduate with higher grades is an indication of their highproficiency in accounting knowledge. Also, women contribute towardsthe growth of their companies in the same way as males.

Abstract

The research paper explores how gender bias is widespread in theaccounting profession. In specific, female accountants are treatedunjustly as compared to male accountants. As a result, they areunable to access the same payment, promotion opportunities,assignment to leadership roles and consideration for partnership asmales. Such discrimination occurs in some accounting firms, despitewomen representing a higher percentage of accountants in theindustry, and graduating with higher grades than men. Women shouldnot be discriminated against on the basis of their gender because,they have demonstrated to be equally or more competent than men inthe accounting profession.

1Introduction

Despite the fact that female accountants account for a higherpercentage of the competent workforce in the accounting industry,archaic working cultures and discrimination based on gender progressto impede their development in the profession. The accounting job istraditionally referred to as male-dominated. In former years, it wasalmost impossible for females to make a breakthrough in theprofession. However, currently more and more women have demonstratedtheir capability in becoming female accountants. The number of womenin the profession has increased and is more than that of men. Butwomen continue to face gender bias in accounting, as some companiescontinue to hold onto the belief that women are incapable of makinggood accountants.

In the following discussion, the paper evaluates grounds on whichwomen in the accounting profession are discriminated. It furtherargues that women in accounting should be treated without biasbecause they are more or equally competent compared to men.

22.1Gender Bias

Gender bias is the unfair treatment of one gender over another inemployment opportunity. Such treatment occurs when an employer holdsbeliefs that for instance, being female makes it impossible for apotential employee to be proficient in a certain profession. Itresults in gender based prejudice in pay, work privileges,promotions, assigning of duties and benefits among other aspects.

In many countries, governments have declared gender bias unlawful.Companies that uphold such discrimination are likely to facelawsuits. Nevertheless, such laws have been ineffective ineradicating gender bias. This is because, at times the partialitymanifests in manners that are subtle. Illustrations of subtle typesof gender discrimination include a company implementing objectiverules that apply rigidly to one gender, but are lenient to the othersexual category or an organization where women are assigned dutiesthat are reflective of the long-established feminine roles.

Discrimination due to one’s gender exists towards women and men.However, it appears to be predominantly directed towards women. Forinstance, an analysis of pay equity among all genders depicts thatmales seem to earn more as compared to females, regardless of workingin a similar job. Although such disparities have declined, as thereare women earning more than males, the bias is still widespread inmost companies and professions. Such companies argue that womenshould earn a smaller amount, because they spend less time atworkplaces all through their working life, when compared to males.Gender bias is worse in countries that progress to hold on to thebelief that women are inferior to men. As a result, females aredisallowed from working in professions considered masculine. Instead,they are compelled to perform feminine roles, which impede theiropportunity for career growth.

Over the years, women have been graduating at the same or higherrate than men in all professions and with higher grades (Rowe, 2014).Also, they are offered similar entry-level positions as males, whichinsinuate a move towards gender equality. Regardless of theseefforts, women in workplaces do not get promotions at the same rateas male counterparts. Although they are offered entry-level jobs, thesame does not apply for upper-level positions. This is a form ofdiscrimination because, despite being more qualified and competent ina profession, some companies may fail to promote an employee on thebasis of their gender.

2.2Statistics of Women in Accounting Compared to that of Men

The American Institute of CPAs (2013) explains that in theprevious 20 years, females have made up close to 50% of “new CPAsin the accounting profession” (p.1). Further research conducted byCatalyst.org (2016) depicts that more women are graduatingwith degrees in accounting, in bachelor’s degrees, master’sdegrees and PhDs. In workplaces, “63% of all accountants andauditors in the United States are women. In one survey, women are 47%of all professional staff at CPA firms” (Catalyst.org, 2016,p.1). In addition, more and more women have been making progresstowards joining vocations that were traditionally dominated by men(Braverman, 2015).

Women majoring in accounting studies seem to graduate with highergrades compared to male students. Also, most of the students majoringin accounting are females (Rowe, 2014). Accounting firms tend toemploy more women in entry-level positions than they hire men (Rowe,2014). It appears that women are having a competitive benefit thanmales in regard to entry-level in the accounting profession. Feministmovements have also encouraged women to take on roles traditionallypreserved for males (Rowe, 2014). Consequently, females have feltencouraged to participate in any vocation provided they match theskills and competency required.

The statistics demonstrates that the number of women joining theprofession has been on the rise, when compared to that of males. Itis apparent that there has been an increase in the capability andinterest of women to work as accountants. This could be attributed tothe fact that women currently spend less time engaging in traditionalroles. Women have joined the workforce at an increasing rate and areless concerned about maintaining their households as was the case forfemales in the past (Rowe, 2014). They now compete for the sameemployment positions with their male counterparts. In addition,society has become tolerant of the fact that females can perform thesame roles as men and vice versa, which explains the shift intovocations considered appropriate for males.

2.3Gender that Faces Bias in the Accounting Profession

Even though the statistics of women in the accounting profession ishigher than that of males, women are more likely to be discriminatedagainst. Braverman (2015) explains that “while the number of womenin the workforce has increased in the past decade, they have not madestrides in male-dominated fields” (p.1). This implies that societycontinues to hold on, to the belief that some professions belong tomen. Hence, this makes it impossible for women who are competent towork in male-dominated careers to access equal employmentopportunity. Such vocations include accounting. According to aresearch conducted by Catalyst.org (2016), more women aregraduating from college with accounting degrees. However, as thedemand for accounting professionals progresses to grow, females areunable to make the same progress as men, despite representing ahigher percentage of graduates.

The accounting profession was traditionally referred to as maledominated and the same belief is still held by many companies (Rowe,2014). Historically, the roles of men and women were disparate. Asmen were allowed to work in former employment opportunities, the roleof women was reduced to taking care of their homes, spouses andchildren. Hence, even women that managed to make it into the workinglife were confined to work opportunities considered feminine. On theother hand, men were encouraged to take on more masculine roles, byworking in professions considered to be tasking like accounting. Suchviews continue to gave rise to the presumption that it is impossiblefor women to rise above men in some careers.

Some companies believe that because women are tasked with morehousehold responsibilities, it is impossible for them to outperformmen in vocations that require a lot of commitment. For instance,women are likely to take leaves, like maternity, which means thatthey will be required to stay out of work for longer periods (Rowe,2014). This acts as a major hindrance for employment into positionslike accounting. Due to the fact that it is impossible to postponeaccounting role until when a woman resumes work from her maternityleave, several organizations opt to reserve the positions for maleemployees. This evidently results in gender discrimination towardsfemales, despite the fact that they may be more competent in theaccounting field as compared to male employees.

2.4Proof of towards Women

There is ample evidence to demonstrate that females are treated withprejudice in the accounting profession as compared to males. This isevident in the payment, promotion, representation in leadershippositions and consideration for partnership in accounting firms.

2.4.1Payment.

The amount of pay that employees are given is an effective way ofdetermining whether some individuals are favored than others. It isnormal for payment to differ depending on the rank, industry andpayment systems used by a company. However, when the payment differson the basis of gender, then it is an outright indication of genderbias.

Many studies support the presence of a pay gap between male andfemale accountants. Male accountants tend to earn more than females.For instance,

“Bloomberg Businessweek reports that female MBA accountinggraduates from top business schools earn 84.7 cents for every dollarpaid to their male peers. In addition, in 2012 the Institute ofManagement Accountants (IMA) salary survey categorized gender paygaps not only by total compensation, but also by age, years in thefield, and management level. Analysis of the IMA data concluded thatthe overall compensation gender pay gap between men and women is 22%with men earning more” (Brody, Cox &amp Kern, 2015, p.133).

In addition, females in their thirties tend to earn less than men inthe similar age bracket, with a difference margin of 22% (Brody, Cox&amp Kern, 2015). The same case applies for females aged fifty, butwith a slightly higher gap of 23% (Brody, Cox &amp Kern, 2015).While women are likely to earn the same or a higher salary than menin their entry-level positions, over time the salaries of men areincreased at a disproportionately higher rate than for females.Gender pay partiality is also apparent in the salaries of women inmanagement positions. Research indicates that males tend to earnconsistently higher by “7% for lower level management positions,18% for middle-management, 19% for senior level, and 17% for toplevel” (Brody, Cox &amp Kern, 2015, p. 133). This implies that thehigher the accounting position a male employee holds, the more theearnings as compared to that of women.

In an analysis by Wharton (2012) on Wall Street, the author makes theconclusion that a pay gap exists between female and malestockbrokers. The pay difference derives from unequal professionalchances given to women. Also, women from the brokerage companiesindicate that the pay systems in the organizations seemed to unfairlybenefit males. However, “leadership at the brokerage housescontended that both men and women were paid using the samecommission-based system and that women were paid less on averagebecause they were worse sales people than men” (Wharton, 2012,p.1). But an analysis of the companies’ structures indicates thatwomen personnel were allocated inferior accounts, resulting in themearning less returns and reduced commissions. Hence, women are deniedthe similar opportunity to manage a well-paid account, which limitstheir probability of earning more. In the past 15 years, females haveaccounted for close to a third of the employees working full time asstockbrokers. Nonetheless, the job continues to hold the biggestgender pay difference in the sales positions (Wharton, 2012).

The research conducted on the payment of female employees in theaccounting industry demonstrates that male accountants have a betterpay. The pay gap is a form of gender bias because it is not based onthe competence of employees. Instead, females appear to be assignedto roles that make it difficult for them to make the same profits forcompanies as their male counterparts. As a result, when they bringfewer amounts into the organizations they work for, they are paidless salaries. Considering that women are subjected to the sameamount of work, as well as working hours, it is unfair for employersto pay them less, as is the case in the accounting vocation.

2.4.2Promotion.

Employees are normally promoted based on their contributions in acompany. In most cases, personnel that bring in more profit to thecompany, or are able to demonstrate a higher level of competency getpromotions.

In a study on issues facing the accounting industry, Brody, Cox andKern (2015) concluded that female employees have a higher likelihoodto maintain the same employment position for years than maleaccountants. Despite the fact that both men and women join accountingfirms as entry-level workers, men are promoted at a higher rate thanwomen. The gender bias in regard to promotion of women is apparent inthe recent lawsuit against KPMG. In May 2016, the firm faced a genderdiscrimination lawsuit for “denying promotions to women andpenalizing them for taking maternity leave” (Cohn, 2016, p.1). Thelawsuit has been filed by more than a thousand female workers atKPMG.

One of the former employees claims that she was removed from apromotion track following complaints from male workers, concerningher direct strategy in leadership. Another employee was unable toraise a complaint with the human resource department, when a managerused abusive language towards her because she was single. The femaleemployee was warned that filing a complaint could have a negativeimpact on her promotions in prospect. In a different case, a femaleemployee with young children was denied the opportunity to travel onwork basis, owing to the reason that she held the responsibility oftaking care of her children back at home. This is regardless of thefact that her male workmate with a young child was not denied thesame opportunity (Cohn, 2016).

Further research on the KPMG accounting firm indicates that “KPMGpromotes fewer women to partner than the industry average of 23percent, and KPMG also promotes fewer women to senior managerpositions than the industry average of 44 percent” (Cohn, 2016, p.1). When compared to its competitors, which have the same number offemale workers, the accounting firm ranks low in its endeavor topromote female workers. In addition, KPMG rarely engages in thegrooming as well as mentoring of women employees into leadershippositions. KPMG acts as an example firm of other accounting companiesthat fail to offer promotion opportunities to women at the same rateas men. This is an evident indication of the existence of gender biasin regard to promotion by some accounting firms.

2.4.3Representation in leadership positions.

Leadership positions at workplaces should be occupied by both malesand females. However, female accountants have a lower representationin leadership positions. While many companies are likely to higherfemale accountants, they are less likely to hire them into leadershipposition. This form of gender bias aligns with the issue discussedabove concerning promotions.

Provided that few women workers are promoted to senior positions,gender partiality reduces the possibility that they will be promotedinto leadership positions. Research on the statistics of femaleaccountants depicts that most graduate with higher grades as comparedto their male counterparts. In addition, the female accountants makeup more of the workforce in the accounting profession. However, mostleadership positions are awarded to males, which clearly place womenat a disadvantage when it comes to the possibility of holding seniorlevel positions in accounting firms.

Boshoff (2016) explains that “female accountants in regional areasare still hitting the glass ceiling because of outdated work culturesand gender-based discrimination” (p.1). The author further explainsconcern that despite “women making up half of qualified practicingaccountants but these numbers are not translating to senior positionsas principals” (Boshoff, 2016, p.1). The glass ceiling refers tofalse barriers founded on attitude or organization bias, which makesit impossible for competent persons to advance into managementpositions in an organization. The barriers are invisible, yet areobservable in those directly affected by the bias. Despite the factthat workplace prejudices are illegal, they continue to be widespreadin most companies, like the accounting industry.

The outdated work cultures include the assumption that women areincapable of performing as competently as males. This is because,women have other responsibilities that they have to take care of,like family, yet accounting is a demanding vocation. The increasedacceptance of females in the accounting profession has led to anassumption that women have a clear path of progressing in theprofession. However, many females have to deal with the reality thattheir career is limited in regard to leadership positions. It isunfair for firms to assume that female accountants are incapable ofmeeting their work demands and use this, as a basis for not employingthem into leadership positions.

2.4.4Consideration for partnership.

In most organizations, partners can either be female or male.Nevertheless, in a report compiled by the Public CompanyAccounting Oversight Board (2014), few women are considered forpartnership in accounting firms.

“Despite the fact that women have represented about 50 percent ofnew certified public accountants (CPAs) in the accounting professionfor the past 20 years, women account for only 19 percent of partnersin CPA firms nationwide, and in CPA firms with 50 staff or more,women make up only 17 percent of partners” (Public CompanyAccounting Oversight Board, 2014, p. 1).

The possibility that a female accountant will rise to the position ofbecoming a partner is very minimal. In fact, the Oversight Boardexpresses concerns that most women opt to stop working for accountingfirms and become entrepreneurs. Although there are many qualifiedwomen, capable of becoming partners, some companies opt to award thepositions to male employees, who are not equally competent.

Many firms in America lack gender diversity, a concern that is morewidespread in accounting firms (Public Company AccountingOversight Board, 2014). This can be attributed to the fact thataccounting companies consider women incapable of meeting the demandsassociated with accounting jobs. The vocation is dominated by men,who are considered to be more flexible in regard to working hours. Itis assumed that men are able to spend more time and concentrate moreon their work because they do not have other commitments, like takingcare of children. However, such a presumption assumes that men arenot responsible for taking care of their families, which is notalways the case. Hence, women are unfairly denied opportunities tobecome partners in accounting firms.

In a different research conducted by Catalyst.org (2016),“women are 47% of all professional staff at CPA firms, but make upjust 22% of partners and principals” (p.1). The percentage ofworking female accountants does not balance with that of femaleaccountant partners. It is evident that regardless of the effort thatwomen make towards improving the companies they work for, they arestill not considered as fit employees able to hold highly rankingpositions. This explains why a female accountant is likely to holdthe same employment position for years, yet male counterpartsfrequently get promoted. The development of women within theprofession is limited to low paying positions. Even when women arelucky to be promoted, they rarely get to positions like partner.

2.5Women are Equally Competent as Men in the Accounting Profession

Research on gender bias in accounting, leads to the conclusion thatwomen are discriminated against compared to their male colleagues. Itis assumed that male accountants are better employees than femaleaccountants. As a result, women do not get equal opportunities inregard to promotions, payments, leadership positions and becomingpartners. Such treatment amounts to prejudice because there are novalid reasons to depict male accountants as more competent thanfemales.

Female accountants should not be treated with bias because there isample evidence to demonstrate that they are equally or more competentthan male accountants. Women enter into the accounting professionwith more proficiency than men (Rowe, 2014). In addition, femaleshave a higher likelihood of graduating with better grades as comparedto males (Rowe, 2014). These factors are a clear indication thatwomen are highly qualified to work as accountants. As a result,accounting firms should not use gender as a basis for denying equalemployment opportunities to women. In fact, women have demonstratedto work better than males, but provided they continue to be deniedthe opportunity to demonstrate their expertise, companies areincapable of recognizing such potential.

Female accountants should be paid equally to men. Pay differenceshave been noted even in cases where women work in the same employmentpositions as their male counterparts, work for the same hours andworking conditions. As such, it is not fair to pay men more, yet bothmales and females contribute to the same amount of company input.Rarely to women seek preferential treatment due to their gender. Infact, women are continuously demonstrating a desire to work inprofessions that were historically considered male dominated. Moreand more women are joining the white collar industry and shiftingtheir roles from taking care of their homes.

In addition, considering that woman contribute equally towards thegrowth of their organizations in the accounting industry, they areequally deserving of consideration in leadership positions andpromotions. The glass ceiling has been noted to be a majorcontributor of such female discrimination. Women continue to hold onto the same employment position as their male counterparts becomepromoted and are even considered partners in the accounting firmsthey work for. Such bias should be eliminated in companies. Women arecapable of becoming leaders and holding senior management positions,and they should not be denied such opportunities.

Braverman (2015) explains that the accounting industry should movepast the simple, antique ideas “of pink-collar, blue-collar, andwhite-collar jobs and focus on bringing the best people, regardlessof gender into the roles required of a healthy economy” (p.1). Suchideas only contribute to the continuation of ideas that the malegender is better than females. Both women and men are contributing inthe similar way towards the growth of the economy. Thus, one gendershould not be considered to be better than the other. Also, womencomprise of a larger percentage of our current workforce, yet theirroles are restricted to specific industries. Bearing in mind thatfemales are adding to a larger share of our country’s workforce,and in industries like accounting, it is only logical that they haveequal access as well as opportunity for succeeding.

3Conclusion

Gender bias in accounting is widespread. Female accountants aretreated with prejudice as compared to their male counterparts. Thereare more women demonstrating interest in joining the accountingprofession. This has resulted in a greater percentage of femaleaccountants in accounting firms. However, despite the highrepresentation of females than males, women accountants aredisadvantaged. This is because they are paid less salaries. Despiteworking for the same hours and in the same positions, femaleaccountants tend to earn a lower salary than male accountants. Womenare less likely to get promoted at their workplaces, owing to glassceiling beliefs that hinder the promotion of women into leadershippositions. Many accounting firms hold on to traditional beliefs thatassume women to be incapable of handling the demanding and timeconsuming tasks in accounting. As a result, they prefer to promotemales than females. It is unfair for accounting firms to hold on tosuch discriminatory practices. This is because women are equally ormore competent than men, and they contribute towards a company’sgrowth in the same way as men.

4References

Braverman, B. (2015). More women are working, but not in the highestpaying jobs. The Fiscal Times, 1-1. Retrieved from: http://www.thefiscaltimes.com/2015/03/26/More-Women-Are-Working-Not-Highest-Paying-Jobs

American Institute of CPAs. (2013). Gender issues and businesscase, 1-1. Retrieved from:http://www.aicpa.org/career/womenintheprofession/pages/genderissues.aspx

Rowe, J. (2014). Gender and career success in public accounting.Honors Theses, 1-23.

Brody, R. G., Cox, V. L., &amp Kern, S. (2015). Gender equity in theaccounting profession: An update. The Accounting Educators’Journal, 25, 131-147.

Wharton, K. (2012). How gender bias plays out on Wall Street. TheFiscal Times, 1-1. Retrieved from:http://www.thefiscaltimes.com/Articles/2012/06/08/How-Gender-Bias-Plays-Out-on-Wall-Street

Cohn, M. (2016). KPMG Gender discrimination lawsuit expands.Accounting Today, 1-1. Retrieved from:http://www.accountingtoday.com/news/firm-profession/kpmg-gender-discrimination-lawsuit-expands-78098-1.html

Boshoff, E. (2016). Female accountants face gender discrimination onthe career ladder. UNE News and Events, 1-1. Retrieved from:https://blog.une.edu.au/news/2016/03/14/female-accountants-face-gender-discrimination-on-the-career-ladder/

Public Company Accounting Oversight Board. (2014). Leadershipin public accounting firms: Why so few women? Retrieved from:https://pcaobus.org/News/Speech/Pages/03132014_Washington_Women.aspx

Catalyst.org. (2016). Women in accounting, 1-1. Retrievedfrom: http://www.catalyst.org/knowledge/women-accounting