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Gender Gap Remains a Challenge for Internal Audit Profession

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Sep 28th 2016
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Internal audit is pretty much a bro’s club worldwide, according to a new survey report by the Institute of Internal Auditors.

Women in Internal Auditing, written by Margaret Christ, PhD, CIA, an associate accounting professor at the University of Georgia, makes clear that there are many reasons for that and they often are driven by women’s choices, business styles, and cultural norms.

And, yes, that means there’s plenty of room for improvement.

Let’s start with internal audit’s gender gap, which becomes greater as auditors climb the management career ladder, the report states. Below the chief audit executive (CAE) position, women comprise a smaller percentage of the workforce in every region except North America, where 51 percent of non-CAEs are women.

Globally, women comprise 31 percent of the CAE ranks, while 33 percent are directors or senior managers, 34 percent are managers, and 44 percent are internal audit staffers.

While men outnumber women as CAEs in all regions worldwide, female CAEs are particularly scarce in South Asia where they comprise only 7 percent of the top position. In North America, 39 percent of CAEs are women.

But the gender gap may be narrowing. Most of the more than 5,400 women who participated in the survey hold lower-level positions than the men, but they also generally are younger than their male counterparts. This suggests, Christ notes, that as the younger women age, they may be more likely to move into senior positions.

Research also suggests that there are more female CAEs or other executives in organizations where the board of directors is not dominated by men, the report states.

Still, there are some cultural and female-mindset issues at work here, too. One biggie cited by men and women in internal audit is that more women entered the workforce more recently than they did in prior decades. In fact, the report indicates that 37 percent of men CAEs have at least 16 years of internal audit experience under their belts, compared to 27 percent of the women.

On the other hand, more women than men still tend to leave the workforce for other priorities, such as caring for children or aging and infirm family members.

That’s one of several cultural norms and stereotypes at play for women in internal audit. Many women tend to be less assertive and less competitive than men, and that can hold them back. Shawn Tebben, vice president of internal audit for Vail Resorts, states in the report that men can be perceived as more confident and self-assured than women, and that timidity can hurt their credibility.

Maybe that’s why women auditors assessed themselves lower – though not by much – than men auditors in all of the 10 core internal audit competencies:

  • Standards (3.07 for women vs. 3.19 for men)
  • Governance, risk, and compliance (3.32 vs. 3.49)
  • Business acumen (3.36 vs. 3.58)
  • Internal audit management (3.42 vs. 3.68)
  • Improvement and innovation (3.46 vs. 3.64)
  • Critical thinking (3.51 vs. 3.68)
  • Internal audit delivery (3.69 vs. 3.84)
  • Persuasion and collaboration (3.72 vs. 3.85)
  • Communication (3.76 vs. 3.89)
  • Ethics (3.85 vs. 3.99)

Further, regardless of what stage they’re at in their careers, women auditors report less competency than men in business acumen and internal audit management – key skills for CAEs.

“Given that these are merely self-reports, it is unclear whether these differences are driven by true differences in competency, or whether they may instead be driven by the propensity of women to rate themselves lower than men in general,” the report states.

Here’s a sampling of other differences between men and women in internal audit.

  • Women are less likely than men to diversify their expertise either through formal education or professional certifications.
  • Both sexes are equally likely to say they have well-defined quality assurance and improvement programs. But men were far more likely to report using balanced scorecards, surveys of clients, and peer reviews to assess their internal audit functions.
  • Men and women auditors are equally likely to work in publicly traded organizations.
  • There are significantly greater numbers of women CAEs in public-sector and nonprofit organizations. More than half of CAEs at educational service organizations are women, the only industry in which most organizations have a female CAE.
  • Almost half (42 percent and 40 percent, respectively) of public service organizations and “other services” organizations have female CAEs.
  • In all other industries, at least 65 percent of CAEs are men.
  • Almost half of women CAEs are in smaller organizations of less than $100 million in revenues, while men CAEs are evenly split across all sizes.
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