Recent years have seen gender equality at the top of leading audit firms’ promoted agendas. However, women continue to be marginalized in audit firms, casting doubts on firms’ gender equality initiatives. The disparity in work pay between men and women is one important way through which gender inequality manifests. The longstanding history of gender inequality in the auditing profession remains a serious concern, despite research showing female auditors to deliver higher audit quality and earn an audit fee premium.

In her recently published study Ting Dong (Department of Accounting, Stockholm School of Economics) examines the recent development of the salary gap between female and male auditors in Sweden and explains what drives the change in the salary gap. Using Swedish administrative data from 2007 to 2015 for all Certified Public Accountants (CPAs), Ting’s study shows that the auditing profession’s overall gender salary gap has substantially narrowed during this period, and more female auditors have moved up to the top earnings group, reducing the wide salary gap at the top of the income distribution.

To explain this trend, Ting finds that female representation at the top of a firm’s hierarchy has spillover benefits for lower-ranked female auditors. Consequently, the paper suggests that increasing female representation at the top of audit firms is an effective approach in reducing the gender pay gap.

Access the research article here