The Retention and Promotion of Female Auditors at Big-4 Accounting Firms

Each of the “Big 4” accounting firms has established an explicit goal of reaching gender parity among their employees - particularly among employees in senior positions. Using a dataset consisting of the career histories of more than 91 thousand unique auditors spanning several decades, we examine the firms’ progress towards this goal by tracking gender differences in auditor retention and promotion. Consistent with concerns expressed both in the press and in prior academic research, we find that women were historically more likely than men to leave the Big 4 firms. We also find that, conditional on staying in the Big 4 firms, women were less likely to be promoted. However, the gender differences in retention and promotion diminished in the early 2010s and either disappeared (in the case of promotion) or reversed (in the case of retention) by the late 2010s. The elimination (reversal) of the female promotion (retention) disadvantage was driven in part by the adoption of equalized paternal leave policies at three of the Big 4 firms, and has led to near gender-parity at all ranks below partner/director, to full parity at the penultimate rank of senior manager, and to a sharply increasing trend in the proportion of female partners and directors. Paradoxically, the gains in female retention and promotion have occurred concurrently with a decline in female representation among starting cohorts of staff auditors.