How gender impacts business decision making

By Jessica Salerno-Shumaker, OSCPA senior content manager

One professional’s Big Four experience inspired her to research gender differences in accounting, and her findings revealed the impact of having a woman in a leadership role.

At a high level, a company benefits by having a female within a CEO, CFO, or audit partner role, because the financial statements are more likely to be transparent.

Ceara Hintz management consulting manager, Accenture

In addition to working at Accenture, Hintz is an adjunct professor within the School of Accountancy at the University of Denver, and recently completed her Ph.D. research.

Earlier in her career when Hintz worked at one of the Big Four, she observed the differences between the male and female audit partners decision-making.

“I noticed as I worked my way up that I was making decisions differently from my male peers,” she said. “And it just started to trigger questions that I had, which led me into my PhD.”

She knew she wanted to focus on gender differences within accounting and noticed there was no audit partner data, unlike CEO or CFO data, which is more readily available. So, she spent about three months collecting thousands of data points herself through firm websites, LinkedIn, Google and more.

The model that Hintz created and ran proved that accounting conservatism is higher among female audit partners. She says accounting conservatism is not overstating net assets, and ideally companies want higher accounting conservatism to remain transparent.

“I was able to show that females were less likely to overstate net assets than their male counterparts,” she said. “And more specifically, the outcome of overstating your assets results in financial restatements, so you're less likely to have financial restatements with a female audit partner.”

Hintz will present her research at the July 18th Women, Wealth and Wellness Conference titled “Numbers don't lie: Women's value in leadership and where to go from here.”

Women make up about 61% of all accountants and auditors in the U.S., but only about 27% are partners or principals at their firms, according to a 2020 Catalyst report on gender parity in accounting. Hintz said her research proves there is value in having women influencing key decisions in business at an executive level, and their leadership benefits businesses.

Although this research has taken years and Hintz has since graduated, she is still working on building out additional econometrics’ models for different publications. While the original scope of work was to show the difference between male and female audit partners, she has since brought in CEO and CFO data to look at power dynamics between how a CEO can change accounting conservatism amongst a female audit partner.

This information is beneficial to business stakeholders who use financial statements to make decisions about the company, such as purchasing stock, and helps increase transparency in those decisions. Hintz said it would be informative for stakeholders to know if all males hold the CEO, CFO and audit partner position at an organization.

“I'm not saying to remove a male from an all-male team,” she said. “But I think this could alter hiring decisions. And I think the SEC could use this in the future to monitor and flag companies that have all male dominated teams to be aware that they're less conservative.”

Hintz said reviewing hundreds of different literature sources across a wide variety of business disciplines revealed

women have a risk-averse mindset. This risk aversion perspective can be helpful to businesses and leadership teams with financial statements.

She said she places an emphasis on the statistical analysis in her research.

“Our econometrics models show that there's value here,” she said. “There is value within the financial statements of having women in the room and our perspective.”

Now, she is looking to spread awareness of her research, especially when it comes to hiring decisions.

In sharing her research so far, Hintz said most feedback has been positive. She’s also spoken with CFOs who say they are interested in looking at past audit history and their

teams to inform their hiring decisions moving forward. And while her original research focused on audit partners, she said she’s looking to expand it out to different stakeholders across different industries.

“Women are of tremendous value in the workplace, and they are making a difference,” she said. “The numbers show it.”

Register today for the Women, Wealth & Wellness Conference on July 18 to hear from Ceara Hintz and other dynamic speakers.

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