Will More Women Mean Better Audit Firms?

This column originally appeared in Going Concern on June 16, 2010.

From the Chicagoland Chamber of Commerce website:

Deb [DeHaas] is the vice chairman and Central region managing partner for Deloitte LLP, which includes 23 offices across 12 states. With 9,000 professionals, Deloitte is the largest Big Four organization in the region. In this role, Deb leads the quality, client satisfaction, growth, marketplace, and human resource initiatives in the Central region.

Deloitte recently gained notoriety as the first Big Four firm to have the private portion of their PCAOB inspection reports made public as a result of significant audit quality deficiencies that had been first cited in 2006.

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Do sheer numbers mean women will now gain equality or even the upper hand in the workforce? Will this influence permeate all areas of professional life or only the ones that men allow?

Hanna Rosin was a guest last night on The Colbert Report. She’s a Contributing Editor for The Atlantic and the author of an article entitled, “The End of Men”.

Earlier this year, women became the majority of the workforce for the first time in U.S. history. Most managers are now women too. And for every two men who get a college degree this year, three women will do the same. For years, women’s progress has been cast as a struggle for equality. But what if equality isn’t the end point? What if modern, postindustrial society is simply better suited to women?

I think it’s a fallacy to believe having a majority leads to having power and influence. Does either gender have a lock on being compassionate, emotionally intelligent, fair and just? Or do those in power inevitably become corrupt and self-serving regardless of sex, race, ethnic background, or sexual orientation? Does diversity or the interest and aptitude to be a ethical, workaholic brainiac matter more when choosing audit partners?

Professor Bob Jensen noted today, “Nearly 20 years ago, Deloitte embarked on a “Women’s Initiative” to help female employees break the glass ceiling…”

The occasion was an article in AccountingWeb from June 2, “Number of Female Accountants Increasing.”

Women now make up more than 60 percent of all accountants and auditors in the United States, according to the Clarion-Ledger. That is an estimated 843,000 women in the accounting and auditing work force.

He cited evidence of Deloitte’s efforts from SmartPros on December 26, 2006.

For the tenth consecutive year, Deloitte tops the Big Four accounting firms in percentage of women partners, principals and directors…Deloitte’s percentage is currently 19.3 percent, surpassing that of KPMG (16.8 percent), PricewaterhouseCoopers (15.8 percent) and Ernst & Young (13.5 percent).

Professor Jensen is a legend in our time, a tireless supporter yet honest critic of the accounting profession and a treasure trove of information about all things accounting and auditing, especially for those who teach it.  But as is my precocious habit, I disagree with him once and a while anyway – respectfully but often strenuously – especially about Deloitte.

Hi Francine,

Both you and I only presented anecdotal evidence that never satisfies academics beyond giving them ideas for research. Anecdotal evidence is easily cherry picked, and you and I have simply cherry picked different cherry trees.  Having one rotten cherry (named Flanagan) on the tree does not make the entire tree rotten.  Also concluding that Deloitte’s $1 million PCAOB fine “has had a huge impact on that firm” contradicts your assertion that the Big Four only gives “lip service” to PCAOB inspection outcomes.

Hi Bob,

You are completely misrepresenting my comments.

I am not cherry picking.  I have been writing about the firms – Deloitte makes many, many appearances – for almost four years…the PCAOB and 404 have had a huge impact on the firms in terms of the infrastructure they have had to build to feign compliance.  But it is my opinion that they are only feigning compliance and it is based on my reading – and writing – of the results.

In Deloitte’s case alone there were recently 475 reasons for believing they have much more work to do on internal compliance…The sad thing is I could make the same case for any of the four largest firms at any point in time.  Try me.  I’d be glad to go one-on-one with any of the retired partners on a panel. Most do not know the half of what their firms face, faced, have swept under the rug or dodged in the courts.

Deloitte employs a very prominent woman in a leadership role in Chicago.

Deloitte LLP executive Deborah DeHaas sees it this way: To ensure a growing and diverse economy, Chicago’s business community needs to retain its college graduates, expand work force training in technology, health care and other growing industries and support the city’s vital small and entrepreneurial companies.

On Tuesday, DeHaas, 50, will embrace that vision when she becomes the first woman to lead the 106-year-old Chicagoland Chamber of Commerce.

Deloitte is the same firm that’s made the deepest, and most brutal cuts in their workforce during the last three years of all the Big 4. They were the first to admit, on re: The Auditors, that thousands of cuts were made to respond to the economic crisis.  A woman who believes in cutting her way to partner profitability will lead Chicago’s Chamber in embracing the “cut to grow” philosophy of business.

Has anything really gotten better at Deloitte with Deb DeHaas in charge?