Originally published on Forbes.com.
Public accounting has this woman problem. All the big firms worry about it and have all sorts of initiatives to deal with it. The problem is that lots of women become CPAs. New CPAs are over 50% women, but very few become partners – around 20% of partners are women. Not surprisingly women are overrepresented among CPAs who work part-time or seasonally.
It is kind of sad because compared to many professions public accounting got off to a relatively good start. When Margaret Fuller wrote Woman in the Nineteenth Century she famously suggested that women could be sea captains. It would be nearly a century until Molly Kool received her master mariner’s certificate in 1939. Margaret did not suggest CPA, since it had not been invented yet. Certificate number 1 was issued by the State of New York to Frank Broaker in 1896 and it only took three years for certificate number 143 to be issued to Christine Ross. It was uphill after that, though.
The young profession was quick to install a glass ceiling. For some period of time the highest ranking woman in a large public accounting firm was Jennie May Palen. According to this story, every report that went out of the New York office of Hakins and Sells was either written or reviewed by her. She was a principal not a partner, because she had not been allowed to go out on audits. In retirement, she wrote poetry, none of which I have been able to track down, but I’m still working on it.
I’ve developed several theories about this phenomenon, but rather than share my idle speculations, I decided to go full bore into impersonating a journalist and conduct an interview with somebody who could really shed some light on the problem. That would be my friend Linda Smith CPA. Linda is the founding partner of Smith Sullivan & Company PC. I have to insist that you click on that link. OK. For you stubborn people that did not click on the link, the dominant feature is the array of head shots of Smith Sullivan people, all of whom are women. Linda told me that somebody at the state said that they are the largest woman only firm in Massachusetts. They had a guy working there for a while, but somehow or other he just did not work out.
I met Linda quite a few years ago when I was the treasurer of Jeremiah’s Inn, which runs a residential substance abuse recovery program and a food pantry in Worcester, Mass. I was very impressed by how she handled Jeremiah’s audit. Whenever there was a not for profit to audit that my firm could not go after due to independence or not being a good fit, Linda was the first person I would call. I think there may be a couple of referrals that she still has not forgiven me for. I would also call her from time to time about Form 990 (Informational report to IRS required of most not-for-profits) problems. For a brief period I had oversight of all my firms 990s. We were a large regional with over 200 people and we prepared about the same number of 990s (150 or so) as Linda’s 10-12 person firm.
Linda is coming up on the twentieth anniversary of the founding of her firm. She graduated from Bentley in 1986 and worked seven years for a sole practitioner, walking out when she realized that paying him a fortune for a bunch of clients that were as old as he was not such a brilliant business move. She started the business in her condo with no employees paying her step-daughter a small amount to answer the phone “Linda McCarthy CPA – How may I direct your call ?” “Let me see if she is available” and then handing her the phone.
Her big break came when a friend offered to off-load her not-for-profit audits. Because of something called A-133 (also the yellow book), audits of not-for-profits had become the Balkans of public accounting, generating much more complexity than they could reasonably pay for, unless you were a sole practitioner with minimal overhead. Most of the six clients were domestic violence shelters which did not want any men showing up on the premises.
If you go on guidestar.org, and start trolling through Boston area not-for-profits you will find Smith Sullivan on several 990s before long. The office is in Westborough Massachusetts, a well-known center of public accounting excellence.
Linda credits her partner Maureen Sullivan for instituting the mom friendly work environment that characterizes her firm. It is critical that the work get done, but each accountant is involved in planning the engagement. Pay and workload are adjusted based on availability and she is finding that as kids get older people start working more hours.
Audits of not for profits run on very tight time budgets and she finds that her crew does well attributing it to mothers being so good at multi-tasking, really organized and “not looking out windows”.
I asked her why she thought the large firms are having such a problem. Most of her staff comes out of large firms. They talk about the pressure to put in long hours and the competitive environment. Nobody wants to be the first one to leave, because it will be commented on. After years of being in that grinder, you then have to go out and serve on boards and the like to be able to bring in business if you really want to advance. Her firm does not have that problem. Women starting their own businesses want to use her firm and women financial planners are referring in business to build the individual practice which is becoming substantial.
Interestingly although much of her client base actively supports liberal to radical causes, Linda does not get deeply involved in what it is they are promoting. As she says “It’s all good”.
She told me that when one of her clients went from characterizing itself as LGBT to LGBTQ, somebody had to explain to her what the “Q” stood for. She thought they were kidding at first. I asked her if she was a member of the American Woman’s Society of Certified Public Accountants. She hadn’t heard of it. She hadn’t hear of Margaret Fuller either. Bentley graduate – what do you expect ?
As an amateur historian, here is what is puzzling. You have all these conferences and projects about making public accounting more accommodating to women. Baker Tilly gets an award for being the Best Accounting Firm for Women because it has about the same percentage of women at the partner level as the United States Senate. Why haven’t 100 or 200 women senior managers, directors, principals and income partners with 10 to 20 years experience not just walked out and started a firm ? It would be a power house and the culture it created would transform the industry.
I asked my covivant about the idea. Coincidentally CV, who works for a national firm, had been in a scheduling meeting, where somebody noted that everybody in the room was a woman and that, in fact, it was the women directors, managers, etc. who were making everything run. CV thinks it would be really something. I think I’ll leave my question as an interesting thought experiment for the moment.
You can follow me on twitter @peterreillycpa.