Women as Managers and Partners: Context Specific Predictors of Turnover in International Public Accounting Firms

By Dalton, Dan R.; Hill, John W. et al. | Auditing: A Journal of Practice & Theory, Spring 1997 | Go to article overview

Women as Managers and Partners: Context Specific Predictors of Turnover in International Public Accounting Firms


Dalton, Dan R., Hill, John W., Ramsay, Robert J., Auditing: A Journal of Practice & Theory


Key Words: Gender, Turnover, Women managers, Women partners.

Data Availability: The data on which this study relies are available from the authors contingent on the permission of the public accounting firms who provided us access.

In recent years there has been much discussion about gender effects and the so-called "glass ceiling" for women in public accounting as elsewhere (e.g., AICPA 1994; Brett and Stroh 1994; Foster 1995; Lehman 1992; Naff 1994; Powell and Butterfield 1994; Reed et al. 1994; Tharenou et al. 1994). One specific concern related to the general controversy is the inability of large CPA firms to retain as many partners and managers as desired (e.g., Alter 1991; Hooks and Cheramy 1989; Parent et al. 1989; Pillsbury et al. 1989; Schwartz 1996). This inability is important for two reasons. First, turnover can be costly in terms of public relations, additional training requirements, and a reduction in the quality of auditing due to a loss of expertise (Hill, Metzger and Wermert 1994). Second, the inability to retain a sufficient number of women in senior positions will obviously deter firms' goals of a gender-diverse workplace.

Even so, no studies were identified that provided large-sample, systematic evidence using actual employee turnover and accounting-context predictors to explain differences by gender in partner and manager turnover for Big 6 firms. The majority of prior studies dealing rigorously with CPA turnover have either not explicitly examined gender using accounting-context variables or have operationalized turnover as "intent to turnover" or one of its variants (Maupin and Lehman 1994; Quarles 1994; Reed et al. 1994). Recent research in fields other than public accounting indicates that intent to turnover may not adequately capture actual turnover behavior (Kirschenbaum and Weisberg 1994; Tett and Meyer 1993).

This study explicitly addresses why women partners and managers leave public accounting as compared to their male counterparts. Four public accounting-specific latent variables representing critical aspects of the contemporary public accounting environment believed to be associated with partner/manager turnover in large CPA firms are examined. These variables were developed principally through discussions with experienced practitioners and from assertions contained in the business practice literature. Because of the dearth of theory and prior empirical research in the area of actual partner and manager turnover in CPA firms, there is little theoretical foundation upon which to base predictions of differential effects of factors potentially related to turnover by gender. Yet, if progress is to be made in reducing the turnover of women in senior positions in large CPA firms, some understanding of these differential effects appears to be essential. Consequently, this research, though exploratory in nature, fills a void in the audit and accounting literature, and has direct implications for practice.

The four latent variables include: (1) the perceived competitive environment in which public accounting firms operate, (2) work and non-work obligations of partners and managers, (3) the perceived internal and external control existing in the workplace, and (4) the level of perceived litigation risk in the work environment. These latent variables are formed from questionnaire data collected from a random sample of 205 former partners and managers who left large CPA firms during the period 1990-1993. Once the psychometric properties of these scales are assessed through structural equations confirmatory factor analysis, the full model, including relationships among these constructs and gender, and gender and certain post-separation outcomes (i.e., whether departees remain in public accounting; whether departees who do remain in public accounting remain in the Big 6 accounting firms) is tested in a path analytic structural equations model. The results indicate that, although all four factors appear to be associated with partner/manager turnover, only one of the four factors, work/ non-work obligations, is significantly related to gender. …

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