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Flexible scheduling in public accounting
Pergamon
Journal of Accounting Education, Vol. 15, No. 1, pp. 145 158, 1997 © 1997 Elsevier Science Ltd All rights reserved. Printed in Great Britain 0748-5751/97 $17.00 + 0.00
PII: S0748-5751(96)00037-1
Case
FLEXIBLE S C H E D U L I N G IN PUBLIC A C C O U N T I N G Jeffrey R. Cohen BOSTON COLLEGE Abstract: Recently, m a n y major public accountingfirms have implemented flexible scheduling programs in order to improve their retention and promotion of female professionals. This case, which is based on interviews with H u m a n Resources and Auditing personnel at a major firm, provides students with the opportunity to examine the costs and benefits of such a program. It highlights the importance of judgment, ethics and decision-making skills in situations where the financial impact is difficult to measure, and complements more traditional cases in the "special decisions" sections of the cost and managerial accounting courses. © 1997 Elsevier Science Ltd
I N S T R U C T I O N A L CASE Blanchard & Howard is a large well respected national accounting firm with most of its operations centered in the Northeast and the West Coast. Recently, within the firm, an issue arose concerning the retention of employees with children. Blanchard & Howard discovered that its turnover rate for employees with children is much higher than the turnover rate for employees without children. This issue concerns the firm greatly because the cost to replace these employees and train new employees is considerable. On average, Blanchard & Howard spends $4000 per employee per year in direct recruiting costs alone. In an effort to resolve the dilemma, the Executive Board of Blanchard & Howard is considering adopting a comprehensive flexible work program. If implemented, the program would provide Blanchard & Howard employees with the option to take a paid leave of absence after the birth or adoption of a child. In addition, it would also grant qualified individuals the opportunity to have flexible work schedules for a predetermined period of time. If approved, Blanchard & Howard will become the first major accounting firm to adopt a comprehensive flexible scheduling program. A preliminary analysis indicates that although the program will be open to both genders, the overwhelming number of participants will be women. The program may prove to be an advantage in recruiting new staff since a large portion of those entering the work force are now women. However, the preliminary analysis also indicates that a flexible scheduling program 145
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will require a significant initial infusion of start-up capital and considerable funding in the future. Furthermore, Blanchard & Howard must move cautiously on this decision since it affects many potential stakeholders.
The Program Reduced workload. For a period of up to two years per child, eligible employees who choose the option will work 60% of the median time worked by members of the professional staff in a similar position. Although the salary will be proportionately reduced, all fringe benefits will be paid in full. Managers who take part in the program will remain on a partner track. The criteria for eligibility • The employee must have two years minimum with the firm and currently hold the rank of manager or above. • The employee must at least "exceed the expectations" of the firm as defined by the annual performance evaluations. Approximately one third of all managers meet this qualification. • The request must be approved by the Human Resources Department.
Parental leave. Following the birth or adoption of a child, a manager with at least five years' service is eligible for two weeks paid leave to be taken within four months of the event. These two weeks are in addition to the unpaid time off that employees are entitled to by law. Emergency child care. A manager with two years' service with the firm can use a drop-in child care service if their regular child care arrangements cannot cover an emergency (e.g., snow days; the regular child care provider is sick).
Preliminary Analysis Based on Blanchard & Howard's analysis, the firm came up with the following estimates: On average, it takes 35 to 40 hours of Blanchard & Howard employee time to hire each new recruit. Each year, the firm hires 300 professional staff: 75% become new staff accountants and 25% replace experienced seniors and managers who have left the firm. Other recruiting costs (besides the costs associated with the hours involved in interviewing) include travel and lodging expenses for out-of-town interviews and for Blanchard & Howard employees who return to college campuses to recruit. Blanchard & Howard also spends substantial sums on meals and entertainment during the recruiting process.
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In addition, the training is expensive: employees spend 80 hours a year in training during their first five years with the company. While much of this training is conducted during slow periods, Blanchard & Howard still loses some billable time. Other expenses include: program design costs (requires external help); program implementation costs (e.g., developing and distributing brochures and videos, training and educating the program professional staff); emergency child care; and monitoring and evaluating the program. In total, Blanchard & Howard estimates the direct costs of operating a reduced workload program to be approximately $3 million each year or 1% of total yearly revenues. Stakeholder Reactions The overall reaction to the possibility of having a flexible scheduling program is mixed. While some strongly support the program based on corporate social responsibility and the success of similar programs in other industries, others believe flexible scheduling may hinder the growth of the company, their chances for personal advancement, and their own personal incomes. Joshua Gibson. Joshua is the Managing Partner of Blanchard & Howard. The topic of flexible work arrangements has come up several times in executive meetings because women now make up 50% of the professional staff below the partner level at Blanchard & Howard. At the present time, the turnover rate for women with children is 2.5 times higher than the turnover rate for professionals without children. Additionally, the turnover rate for men with children is higher (25%) than the turnover rate for professionals without children. Interestingly, the turnover rate for men and women without children is the same. Unless Blanchard & Howard finds a way to retain women who have children, Joshua knows that the costs associated with women leaving the firm will continue to rise. However, Joshua does not believe that Blanchard & Howard has an ethical duty to its employees to implement flexible scheduling "no matter what the cost." He is worried whether the employees or the firm will truly benefit from this program: even though employees can reduce their workload to 60% of their normal schedule, their workload could still amount to 40 hours per week. Joshua believes that if parents are serious about spending time with their children, they may leave the firm anyway and opt for a position that demands even fewer hours. Furthermore, judging from colleagues' law firms who implemented flexible scheduling programs, Joshua believes that almost all the participants in Blanchard & Howard's flexible work arrangements will be women even though the flexible program will be open to men too. He believes that men will hesitate to use the program because the bottom line is that many people
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still believe that taking care of children is a woman's job and will view men who choose this program as weak and inappropriate for management.
Emma Goldman. Emma is entering her senior year at prestigious Southern University and has many important career decisions to make during the year. She wants to work for a large accounting firm when she graduates, but she does not know how to choose between the different firms. Most o f the firms offer the same, or very similar, benefits. Emma has recently learned from one of her accounting professors that the firm of Blanchard & Howard may implement a flexible work program. This factor could seriously affect Emma's decision. Although she plans to work for eight to ten years before starting a family, she wants to have children some day and hopes to strike a balance between parenthood and a career. Shelly Martinez. Shelly is a senior manager at the San Francisco office of Blanchard & Howard. She graduated from the University of CaliforniaBerkeley in the top 5% of her class. She is a dedicated, personable, and hard-working employee who willingly puts in the long hours required in public accounting. She is currently five months pregnant, and until a month ago, planned to quit after the birth of her child. Shelly has heard several rumors that Blanchard & Howard might be implementing a flexible work program. Such a program would be ideal for Shelly because after her baby is born, she would like to continue working. The reduced workload would give her time to spend with her child while continuing on partner track and receiving benefits from Blanchard & Howard. Shelly believes the major drawback to this program for the firm is the effect it will have on her clients. Will some clients switch to other auditors because she is on a reduced schedule and may be more difficult to contact? She is also concerned that although the official policy of this program would allow her to remain on a partner track, she will be assigned less important and less challenging clients. She is worried that she will not have the time or connections necessary for practice development. If this occurs, she fears she will not develop the requisite skills to make partner. Elaine Noble. Elaine is a newly appointed senior at Blanchard & Howard. She reports directly to Shelly Martinez and has worked very closely with her in the past two years. Shelly advises her on many decisions regarding audits, client relations, and other professional and career issues. In general, Elaine is ambivalent about the idea of a comprehensive flexible scheduling program. She likes the thought of the firm attempting to recognize the problem of balancing family and work, but she is worried about the costs.
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F r o m Elaine's point of view, if Shelly leaves Blanchard & Howard permanently, Elaine will be deprived of a critical mentoring relationship; it is important for employees to have mentors to advise them. This is especially true for women because there are so few females in partner-level positions at Blanchard & Howard. She feels that Blanchard & Howard would also lose a very valuable employee if Shelly leaves the firm. Elaine thinks that Shelly's concern about the availability of managers on a flexible schedule is not a serious issue. If the flex-time managers take fewer clients, they will be able to devote more time to each client. Furthermore, with today's high-tech communication, working from the home is becoming easier and more effective. However, the costs are a major concern to Elaine. Any expenses to run the program directly affects the employees' income. She is curious to see how much income will decline in order to subsidize the flexible scheduling program. She also does not like the idea of subsidizing other colleagues' child care responsibilities by possibly having to pick up the slack caused by those on a flex-time schedule. Robert Richardson. Robert is a leading partner at the Boston office of Blanchard & Howard. He is not supportive of these new alternative work arrangements. Robert knows the percentage of female partners is low (approximately 10%), but believes this new program will favor mostly women. Robert spoke out in opposition to the program because the current attitudes in society would make it difficult for men to feel comfortable enrolling in a flexible scheduling program. If, in the future, societal views of gender roles significantly change, Robert said he might support the program at some later date. However, he has heard rumors that it may cost approximately $10 million in startup costs in its first year alone. This would be deducted directly from the profits, which in turn would be taken out of the partners' salaries. He estimates that he will lose $5000 each year because of the program. Robert finds this upsetting since he has three children who will be entering college within the next five years. He is in full support of the idea that more women should be admitted into the partnership, but he does not believe that his earnings should suffer so that the firm will be more attractive to the female workforce. In addition, Robert believes that some clients may be lost because the availability of the auditors will be more limited on a flexible schedule. Robert Zimmerman. Robert is also a leading partner at Blanchard & Howard in the Boston office. He has been with the firm for over 35 years and is one of the most respected and influential partners in Blanchard & Howard. He strongly supports the concept of flexible scheduling and introduced the idea in prior executive meetings. He has seen many female managers leave to raise children and believes that several of those who left
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would have made excellent future leaders in the firm. In addition, his daughter, who just recently graduated from law school, told Robert that the presence of a flexible scheduling program influenced her choice of a law firm. Based on his discussions with outside recruiters and his daughter, he learned that this program could be an excellent opportunity to distinguish Blanchard & Howard from the other firms in the industry since 52% o f all accounting college graduates are now female. Although financially the program may appear to be losing money, he believes the stronger recruitment classes would attract invaluable clients in the future. Robert believes the intangible benefits more than justify the costs. He is convinced that the cost to run the operation is well worth it. Furthermore, as a leading partner whom many confide in, Robert has become aware of an unintentionally discriminatory corporate culture. He believes that the high female turnover rate in public accounting is also attributable to the failure of firms to integrate women into the culture of the firm. Currently, only 10% of the partners in the firm are female and those who did make partner had to work much harder than their male counterparts. Because of the lack of effective mentors, Robert views this program as the first step in changing the corporate culture to incorporate a more gender-neutral, performance-based attitude. Jessica Marino. Jessica is a partner at the San Francisco office of Blanchard & Howard and has been working for them for 30 years. She has misgivings about this flexible work program. When Jessica first started at Blanchard & Howard, she was the only female professional in her office. She had to struggle and put in very long hours to get in the position she occupies today. Jessica would have liked to have this opportunity when she was at the managerial position years ago; she chose not to have children because she felt she could not manage both a career and a family. Despite the attractiveness of the program, Jessica is also reluctant to support this program. She believes that if staff members are given this opportunity, they might not remain focused on their careers and cost the firm some very valuable clients. New York Highlanders. New York Highlanders is a health care client of Blanchard & Howard that has recently experienced tremendous growth. The president of the corporation, William Randolph, is not pleased with the idea of flexible work programs for his audit firm. He understands the commitment involved in raising children; however, he does not believe an auditor who has just become a parent and is working a reduced schedule will be completely committed to work. Mr. Randolph knows that because New York Highlanders is experiencing rapid growth and is in need of hands-on involvement in developing a more effective internal control structure it is an important client for Blanchard & Howard. He hopes Blanchard & Howard will consider other
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alternatives before assigning them an auditor who is on a flexible work schedule. New York Highlanders works very closely with its auditors and expects and requires a lot from them. If contact with their auditors is limited, this will impose a substantial inconvenience for New York Highlanders and they may consider switching auditors.
Roy White. Roy White works in the Personnel department at Blanchard & Howard and will be a key figure in the implementation of flexible scheduling if it is approved. Roy knows that the program's success requires a total commitment from management. He has researched this type of program in other companies and believes the estimated startup costs will exceed $4 million. The firm will have to hire outside consultants to help with the implementation of this program because Blanchard & Howard does not have the necessary expertise. For the program to work, Blanchard & Howard will have to educate partners such as Robert Richardson who may feel alienated by alternative work arrangements. In addition, employees who opt for the flexible schedule must not be considered "second string" and should have the same opportunities for advancement as everyone else. Roy knows that in comparable flexible scheduling programs in other industries (e.g., law firms), it has taken individuals who enrolled in this program an extra year to reach partnership for each year they were on flexible time. Nevertheless, Roy feels that if Blanchard & Howard can institute change within its corporate culture, the program could succeed. His research of other firms indicates that some of the benefits of this program cannot be estimated in monetary terms. Roy feels this program will help Blanchard & Howard attract some very desirable employees. Although in the short run Roy believes that only women will take advantage of the program, he expects that at some point men may also start to take advantage of it. This will give parents a better opportunity to manage a career and a family. Roy realizes that this is a new concept for the accounting community because in the past, professionals (mainly women) often had to choose between a career or child rearing.
REQUIRED QUESTIONS 1. List the advantages and disadvantages of the reduced workload portion of the program Blanchard & Howard is considering adopting. Classify them as tangible and intangible. Consider both the long-term and short-term issues. Discuss whether the firm is under any ethical obligation to offer this program.
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J.R. Cohen . Who are the internal and external stakeholders in this issue and what do they have to gain or lose if Blanchard & Howard implements flexible scheduling? . In your opinion should the company implement this program? Give specific reasoning to support your view. What other information should you obtain before making a decision? Assume that Blanchard & Howard adopts the plan. Five years later, the firm analyzes the results of the program. Direct costs associated with the reduced workload portion of the program have ranged from $3.2 to $3.6 million per year, approximately 1% of revenues. As discussed in greater detail in the preliminary analysis, these costs include training and educating the professional staff, emergency child care, and monitoring and evaluating the program. Although there are some variable costs, for the most part these costs are committed or discretionary fixed costs. In the five years, the number of female partners in the firm has doubled, so that women are now 20% of total partners. In a similar firm with no part-time policy, the number of female partners has increased 40% over the same time period. In addition, Blanchard & Howard's offer acceptance rate among female college students has increased 25% while the acceptance rate among male students has declined by 10%. .
Robert Richardson, the partner who opposed adopting the program, is still skeptical. He has golfed with clients who have complained about having difficulties reaching their lead auditor. Although no clients have stated that the part-time policy was a factor in their decision to find a new auditor, and Blanchard & Howard revenues have kept pace with the industry, Robert believes that the program is too costly and should be dropped. He still thinks the program is not equitable since 95% of the participants have been women. In contrast, Robert Zimmerman is convinced that since greater diversity has been achieved in the partnership ranks, that the program is a success. Explain in detail why you would either oppose or support continuing the plan.
TEACHING NOTES The purpose of this case is to educate students about the costs, benefits and ethical issues surrounding the topic of flexible scheduling in public accounting. This issue can no longer be ignored. According to a recent survey, women made up over half (52%) of all accounting college graduates, but they hold fewer than 20% of managerial positions in accounting firms. This 20% is surprisingly low considering 40% of all
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female CPAs have been in the field for at least 10 years (Deloitte & Touche, 1993a). Although accounting firms have hired men and women in equal proportions over the past decade, after 6 to 8 years, only two women remain for every three men in the same hiring group (Deloitte & Touche, 1993b). Three primary reasons for womens' departures are the environment, the difficulty of balancing a challenging career and personal life, and perceived obstacles in career advancement opportunities. In addition, Knapp and Kwon (1991) argue that the high turnover rate in public accounting for women is also attributable to the failure of firms to integrate women into the culture of the firm. Collins (1993), in a survey of over 1000 public accountants at the senior or manager level, found that women experience greater stress than men and that the higher stress levels are a significant factor in the greater turnover among women. In addition, Maupin and Lehman (1994) found that a masculine sex-role orientation was significantly correlated with lower turnover and greater job satisfaction. Finally, Park and Lau (1995) found that 30% of women CPAs perceived that there was a "glass ceiling" in their firm.
Development of Case The case was developed by first reviewing literature on gender issues and flexible work arrangements in both public accounting (Hooks & Cheramy, 1989; Parent et al., 1989; Hooks, 1990; Knapp & Kwon, 1991; Coolidge & D'Angelo, 1994; Alter, 1991; Maupin & Lehman, 1994), and in general management (Devanna, 1987; Martinez, 1994; Mock & Bruno, 1994; Thornburg, 1994). Following this review, interviews were conducted with a number of professionals at one international firm that had recently implemented a flexible scheduling program. The case was then reviewed by a partner and senior manager of the firm and by several colleagues. After further refinement, the case was successfully used in two undergraduate cost accounting classes with an enrollment of 80 students as a vehicle to teach "special decisions".
Relevancy of Case in the Accounting Curriculum The Accounting Education Change Commission (1992, p. 250) calls for accounting students to have "the ability to confront unstructured problems--that is, problems with more than one defensible solution." Unfortunately, too often the standard approach to teaching accounting involves reviewing standard homework problems where students are penalized for not having the "correct" solution (Basu & Cohen, 1994). This case is appropriate in the special decisions or relevant costing components of the cost accounting and management accounting courses.
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In these courses, the typical special decisions that are presented involve make or buy, produce or sell at split-off, selling at below regular pricing or capacity constraint. Most accounting textbooks and teaching materials frame these special decisions in terms of products and physical assets. This case demonstrates how the special decision framework can be applied to a human resources problem. For example, students must identify and organize the quantifiable costs and benefits as well as attempt to identify and differentially weight the more nebulous qualitative information. They are forced to confront the difficulties in resolving the conflicting perspectives of various stakeholders. The case may also be appropriate in an auditing class as part of the professionalism and ethics portion of the course. For example, it allows students to reflect on the public accounting work environment in which many will soon find themselves and on the role of men and women as colleagues and professionals. Moreover, auditing students can discuss a public accounting firm's obligation, if any, to help its employees balance their personal and professional lives. Solution to Questions The first question essentially tries to get students to organize their thoughts in a manner consistent with the decision-making process associated with "special decisions" found in most managerial and cost accounting textbooks (e.g., Horngren et al., 1996). Although the costs are easy to quantify and are explicitly stated in the case (i.e., they are estimated to be approximately 1% of total revenues), the quantifying of benefits is a daunting task. The task is made a little easier by requiring students to look at both the short-term and long-term effects. In this case, the benefits are mostly long term and non-quantifiable (i.e., hiring and attracting "better" students, having greater diversity in the management ranks, and reducing turnover among prized employees) and yet the benefits are essential for the viability and relevancy of the public accounting firms in an increasingly diverse business environment (AICPA, 1994). For example, in the AICPA's report on women's status in the profession, one managing partner of a large firm said (p. 9): "There are more women on corporate boards. They feel it, and when you show up with an all-male team, they're looking at you like 'what are you doing?' So, there are forces going the other way". Moreover, Coolidge and D'Angelo (1994) state (p. 19): "every time a business loses an experienced woman and trains someone new, it loses time and money--up to 150% of a year's salary at the managerial level". It must be noted that although the flexible scheduling program is open to both genders, the interviews with the professionals strongly reinforced the idea that in reality it would overwhelmingly be women who would take part in the flexible scheduling program.
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Some students also raised concerns about some costs that are difficult to quantify. For example, a number of students were concerned that participants in the program could lose their career focus. Other students were concerned that, for a program like this to work, a significant time and prestige commitment must be made by all levels of management. Students are also asked here to consider whether there is any ethical or moral obligation to adopt this program. The ethical issues could be framed in terms of the professional code of conduct (e.g., the principles) or in terms o f general ethical philosophies (e.g., theories of justice, rights, or utilitarianism). To answer the second and third questions, students must attempt to identify the various stakeholders and weight the relative importance of their positions. By having students identify the stakeholders, the case is framed in terms of both economic and ethical issues. In this case, the stakeholders (at a minimum) would be the various constituents that are represented by the actors of the case. For example, New York Highlanders is an important client of Blanchard & Howard. They are entitled to receive the highest quality audit in relation to the fee that they are paying. Isn't it reasonable for their management to expect the manager or partner of the engagement to be physically present as much as possible? Interestingly, a number of students commented on how the rapid changes in technology (e.g., fax machines, modems, cellular phones) could alleviate some of these difficulties. The issue of audit switching due to the dissatisfaction with service could also be raised here. It is also appropriate to integrate the literature in practice development (e.g., Hooks & Sincich, 1994) and to discuss how important practice development skills are to making partner. For example, a number of students raised the issue of whether women on a flexible schedule could be successful in generating new business. Another interesting stakeholder is Shelly Martinez, a senior manager at the firm. She would benefit tremendously from the program and would attempt to move up to partner at the firm. Her commitment to the firm would probably increase and she will probably be more efficient while she is performing her job. However, it is very difficult to measure these benefits. Students could be asked to develop performance criteria that could capture these advantages. In discussing Ms Martinez, students could also examine the interaction effects among stakeholders. For example, she is the direct supervisor and mentor to Elaine Noble. If Martinez is not easily accessible, Elaine Noble potentially loses an important mentor in her career. This is very important because Fagenson (1989), Dirsmith and Covaleski (1985), and Scandura and Viator (1994) all found that professionals with strong mentors were promoted more rapidly than individuals who did not have strong mentors. In addition, Scandura and Viator (1994), in a survey of managers and staff accountants in large public accounting firms, found that (p. 729) "prot6g6s who identified a
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female mentor reported receiving significantly higher levels of social support, compared to female prot6g6s who had identified a male mentor". Similar sets of analyses should be conducted for all the various stakeholders before an appropriate solution is presented. Table I lists all relevant stakeholders and briefly summarizes their positions. The last question is assigned to have students examine whether the only criterion that should drive accounting-based decision making is whether the decision increases the profitability of the firm. To counter that narrow perspective, I strive to have students look at the notion of working in "the
Table 1. Stakeholders' positions Stakeholder Joshua Gibson
Stance on the issue Reasons
M i x e d - - u n d e c i d e d Relieves women must be retained at a greater rate. The program is too costly Emma Goldman For She wants to manage a career and job in the future Shelly Martinez Mixed--for She would keep her job if the program is approved. Afraid the firm will lose clients if implemented. Worried about her promotion after flex scheduling Elaine Noble Mixed--for Wants to keep her mentor relationship. She doesn't like subsidizing others' children. Relieves the communication advances makes flex scheduling feasible. It addresses family issues in business. She would have more authority if Shelly left the firm Robert Richardson M i x e d - - a g a i n s t He is supportive of more women entering partnership. He does not like the cost of the program and questions the quality of work done by flex-time partners Robert Z i m m e r m a n For The company is losing top quality female managers at a time when women make up the majority of the entering workforce. There are possible advantages in recruiting high quality women Jessica Marino Mixed--against She believes that something must be done to accommodate raising children. She is envious that she did not have the same opportunity. She chose not to have children to get where she is now. She thinks the quality of the partners' work will decline once they switch to flex-scheduling New York Against Concerned with the availability and Highlanders quality of work completed by flex-time audit staff Roy White Mixed--for He believes it will alter the corporate culture in a very positive way. He feels that there should be a way to balance family and career
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Public Interest." Students are given the opportunity to incorporate in their decision-making process both the quantifiable costs associated with the program and some factors that are ignored in more traditional accountingbased perspectives. I endeavor to demonstrate to students that in the long run, acting in the public interest often helps increase profitability. For example, students can discuss whether society as a whole would be better off if flexible work arrangements were in place to allow professionals in public accounting to better manage the juggling act that is inevitable in today's society. Students can also discuss the costs associated with the program. One student commented that dropping the program would result in a lot of negative publicity. This type of analysis reinforces the notion that accounting is not a black-box discipline, but one that requires a tremendous amount of professional judgment. CONCLUDING
REMARK
This case was developed in the spirit of change that is permeating both the public accounting environment and the accounting curriculum. It can be used in a variety of courses to illustrate the difficulties and challenges that many of our students will confront in public accounting. The case strongly reinforce the importance of developing judgment and decision making skills as opposed to memorization skills in accounting courses. Acknowledgements--I gratefully acknowledge the superb and invaluable assistance provided by Laura Merino in helping develop the case, the professional staff of one international public accounting firm for giving so much of their time in interviews and feedback, and the insightful comments made by Theresa Hammond, Peter Kugel, Arnie Wright, Elaine Harwood, Tom Porter, Greg Trompeter, and the students at the Carroll School of Management at Boston College. An earlier version of the case was presented at the 1!)95 Northeast American Accounting Association Meeting.
REFERENCES Accounting Education Change Commission (1992). The first course in accounting: position statement no. 2 Issues in Accounting Education, 7, 249-251. American Institute of Certified Public Accountants (AICPA) (1994). Women's status and work/family initiatives in public accounting. New York: AICPA. Alter, J. (1991). Retaining women CPA's Journal of Accountancy, 50 55. Basu, P., & Cohen, J. (1994). Learning to learn in the accounting principles course: outcome assessment of an integrative business analysis project Journal of Accounting Education, 12, 359-374. Collins, K. M. (1993). Stress and departures from the public accounting profession: a study of gender differences Accounting Horizons, 29-38. Coolidge, L., & D'Angelo, D. (1994). Family issues to shape the profession's future The CPA Journal, 16-21. Deloitte & Touche (1993). Women in the 90's: a business imperative Team Bulletin, 3 I 1. Deloitte & Touche (1993). The results of work/life balance survey. Team Bulletin, 3 7.
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Devanna, A. (1987). Women in management: progress and promise Human Resources Management, 26, 469-481. Dirsmith, M. W., & Covaleski, M. A. (1985). Informal communications, nonformal communications and mentoring in public accounting firms Accounting, Organizations and Society, 149-169. Fagenson, E. A. (1989). The mentor advantage: perceived career/job experiences of prot6g6s versus non-prot6g6s Journal of Organizational Behavior, 309-320. Hooks, K. L. (1990). Let's give alternative work schedules a chance, Journal of Accountancy, 8 !-86. Hooks, K. L., & Cheramy, S. J. (1989). Coping with women's expanding role in public accounting Journal of Accountancy, 66-70. Hooks, K. L., & Sincich, T. L. (1994). Methods used by big six partners in practice development Auditing: A Journal of Practice and Theory, 101-114. Horngren, C. T., Foster, G., & Datar, S. M. (1996). Cost Accounting: A Managerial Emphasis, 9th Edn. Englewood Cliffs, NJ: Prentice Hall. Knapp, M. C., & Kwon, S. (1991). Toward a better understanding of the underrepresentation of women and minorities in big eight finns Advances in Public" Interest Accounting, 47-62. Martinez, M. N. (1994). Flexible ways to work. FMLA headache or opportunity HR Magazine, 42-45. Maupin, R. J., & Lehman, C. R. (1994). Talking heads: stereotypes, status, sex-roles and satisfaction of female and male auditors Accounting, Organizations and Society, 427-437. Mock, C. & Bruno, A. (1994). The expectant executive and the endangered promotion Harvard Business Review, 16--18. Parent, D., DeAngelis, C., & Meyers, N. (1989). Parity for women CPA's Journal oJ Accountancy, 72-76. Park, L. J., & Lau, R. (1995). Is accounting a good career for women in the 1990's? New Accountant, 8-11. Scandura, T. A., & Viator, R. E. (1994). Mentoring in public accounting firms: an analysis of mentor-prot~g+ turnover intentions Accounting, Organizations and Society, 717-734. Thornburg, L. (1994). Flexible ways to work: change comes slowly HR Magazine, 46-49.
Journal of Accounting Education, Vol. 15, No. 1, pp. 145 158, 1997 © 1997 Elsevier Science Ltd All rights reserved. Printed in Great Britain 0748-5751/97 $17.00 + 0.00
PII: S0748-5751(96)00037-1
Case
FLEXIBLE S C H E D U L I N G IN PUBLIC A C C O U N T I N G Jeffrey R. Cohen BOSTON COLLEGE Abstract: Recently, m a n y major public accountingfirms have implemented flexible scheduling programs in order to improve their retention and promotion of female professionals. This case, which is based on interviews with H u m a n Resources and Auditing personnel at a major firm, provides students with the opportunity to examine the costs and benefits of such a program. It highlights the importance of judgment, ethics and decision-making skills in situations where the financial impact is difficult to measure, and complements more traditional cases in the "special decisions" sections of the cost and managerial accounting courses. © 1997 Elsevier Science Ltd
I N S T R U C T I O N A L CASE Blanchard & Howard is a large well respected national accounting firm with most of its operations centered in the Northeast and the West Coast. Recently, within the firm, an issue arose concerning the retention of employees with children. Blanchard & Howard discovered that its turnover rate for employees with children is much higher than the turnover rate for employees without children. This issue concerns the firm greatly because the cost to replace these employees and train new employees is considerable. On average, Blanchard & Howard spends $4000 per employee per year in direct recruiting costs alone. In an effort to resolve the dilemma, the Executive Board of Blanchard & Howard is considering adopting a comprehensive flexible work program. If implemented, the program would provide Blanchard & Howard employees with the option to take a paid leave of absence after the birth or adoption of a child. In addition, it would also grant qualified individuals the opportunity to have flexible work schedules for a predetermined period of time. If approved, Blanchard & Howard will become the first major accounting firm to adopt a comprehensive flexible scheduling program. A preliminary analysis indicates that although the program will be open to both genders, the overwhelming number of participants will be women. The program may prove to be an advantage in recruiting new staff since a large portion of those entering the work force are now women. However, the preliminary analysis also indicates that a flexible scheduling program 145
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will require a significant initial infusion of start-up capital and considerable funding in the future. Furthermore, Blanchard & Howard must move cautiously on this decision since it affects many potential stakeholders.
The Program Reduced workload. For a period of up to two years per child, eligible employees who choose the option will work 60% of the median time worked by members of the professional staff in a similar position. Although the salary will be proportionately reduced, all fringe benefits will be paid in full. Managers who take part in the program will remain on a partner track. The criteria for eligibility • The employee must have two years minimum with the firm and currently hold the rank of manager or above. • The employee must at least "exceed the expectations" of the firm as defined by the annual performance evaluations. Approximately one third of all managers meet this qualification. • The request must be approved by the Human Resources Department.
Parental leave. Following the birth or adoption of a child, a manager with at least five years' service is eligible for two weeks paid leave to be taken within four months of the event. These two weeks are in addition to the unpaid time off that employees are entitled to by law. Emergency child care. A manager with two years' service with the firm can use a drop-in child care service if their regular child care arrangements cannot cover an emergency (e.g., snow days; the regular child care provider is sick).
Preliminary Analysis Based on Blanchard & Howard's analysis, the firm came up with the following estimates: On average, it takes 35 to 40 hours of Blanchard & Howard employee time to hire each new recruit. Each year, the firm hires 300 professional staff: 75% become new staff accountants and 25% replace experienced seniors and managers who have left the firm. Other recruiting costs (besides the costs associated with the hours involved in interviewing) include travel and lodging expenses for out-of-town interviews and for Blanchard & Howard employees who return to college campuses to recruit. Blanchard & Howard also spends substantial sums on meals and entertainment during the recruiting process.
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In addition, the training is expensive: employees spend 80 hours a year in training during their first five years with the company. While much of this training is conducted during slow periods, Blanchard & Howard still loses some billable time. Other expenses include: program design costs (requires external help); program implementation costs (e.g., developing and distributing brochures and videos, training and educating the program professional staff); emergency child care; and monitoring and evaluating the program. In total, Blanchard & Howard estimates the direct costs of operating a reduced workload program to be approximately $3 million each year or 1% of total yearly revenues. Stakeholder Reactions The overall reaction to the possibility of having a flexible scheduling program is mixed. While some strongly support the program based on corporate social responsibility and the success of similar programs in other industries, others believe flexible scheduling may hinder the growth of the company, their chances for personal advancement, and their own personal incomes. Joshua Gibson. Joshua is the Managing Partner of Blanchard & Howard. The topic of flexible work arrangements has come up several times in executive meetings because women now make up 50% of the professional staff below the partner level at Blanchard & Howard. At the present time, the turnover rate for women with children is 2.5 times higher than the turnover rate for professionals without children. Additionally, the turnover rate for men with children is higher (25%) than the turnover rate for professionals without children. Interestingly, the turnover rate for men and women without children is the same. Unless Blanchard & Howard finds a way to retain women who have children, Joshua knows that the costs associated with women leaving the firm will continue to rise. However, Joshua does not believe that Blanchard & Howard has an ethical duty to its employees to implement flexible scheduling "no matter what the cost." He is worried whether the employees or the firm will truly benefit from this program: even though employees can reduce their workload to 60% of their normal schedule, their workload could still amount to 40 hours per week. Joshua believes that if parents are serious about spending time with their children, they may leave the firm anyway and opt for a position that demands even fewer hours. Furthermore, judging from colleagues' law firms who implemented flexible scheduling programs, Joshua believes that almost all the participants in Blanchard & Howard's flexible work arrangements will be women even though the flexible program will be open to men too. He believes that men will hesitate to use the program because the bottom line is that many people
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still believe that taking care of children is a woman's job and will view men who choose this program as weak and inappropriate for management.
Emma Goldman. Emma is entering her senior year at prestigious Southern University and has many important career decisions to make during the year. She wants to work for a large accounting firm when she graduates, but she does not know how to choose between the different firms. Most o f the firms offer the same, or very similar, benefits. Emma has recently learned from one of her accounting professors that the firm of Blanchard & Howard may implement a flexible work program. This factor could seriously affect Emma's decision. Although she plans to work for eight to ten years before starting a family, she wants to have children some day and hopes to strike a balance between parenthood and a career. Shelly Martinez. Shelly is a senior manager at the San Francisco office of Blanchard & Howard. She graduated from the University of CaliforniaBerkeley in the top 5% of her class. She is a dedicated, personable, and hard-working employee who willingly puts in the long hours required in public accounting. She is currently five months pregnant, and until a month ago, planned to quit after the birth of her child. Shelly has heard several rumors that Blanchard & Howard might be implementing a flexible work program. Such a program would be ideal for Shelly because after her baby is born, she would like to continue working. The reduced workload would give her time to spend with her child while continuing on partner track and receiving benefits from Blanchard & Howard. Shelly believes the major drawback to this program for the firm is the effect it will have on her clients. Will some clients switch to other auditors because she is on a reduced schedule and may be more difficult to contact? She is also concerned that although the official policy of this program would allow her to remain on a partner track, she will be assigned less important and less challenging clients. She is worried that she will not have the time or connections necessary for practice development. If this occurs, she fears she will not develop the requisite skills to make partner. Elaine Noble. Elaine is a newly appointed senior at Blanchard & Howard. She reports directly to Shelly Martinez and has worked very closely with her in the past two years. Shelly advises her on many decisions regarding audits, client relations, and other professional and career issues. In general, Elaine is ambivalent about the idea of a comprehensive flexible scheduling program. She likes the thought of the firm attempting to recognize the problem of balancing family and work, but she is worried about the costs.
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F r o m Elaine's point of view, if Shelly leaves Blanchard & Howard permanently, Elaine will be deprived of a critical mentoring relationship; it is important for employees to have mentors to advise them. This is especially true for women because there are so few females in partner-level positions at Blanchard & Howard. She feels that Blanchard & Howard would also lose a very valuable employee if Shelly leaves the firm. Elaine thinks that Shelly's concern about the availability of managers on a flexible schedule is not a serious issue. If the flex-time managers take fewer clients, they will be able to devote more time to each client. Furthermore, with today's high-tech communication, working from the home is becoming easier and more effective. However, the costs are a major concern to Elaine. Any expenses to run the program directly affects the employees' income. She is curious to see how much income will decline in order to subsidize the flexible scheduling program. She also does not like the idea of subsidizing other colleagues' child care responsibilities by possibly having to pick up the slack caused by those on a flex-time schedule. Robert Richardson. Robert is a leading partner at the Boston office of Blanchard & Howard. He is not supportive of these new alternative work arrangements. Robert knows the percentage of female partners is low (approximately 10%), but believes this new program will favor mostly women. Robert spoke out in opposition to the program because the current attitudes in society would make it difficult for men to feel comfortable enrolling in a flexible scheduling program. If, in the future, societal views of gender roles significantly change, Robert said he might support the program at some later date. However, he has heard rumors that it may cost approximately $10 million in startup costs in its first year alone. This would be deducted directly from the profits, which in turn would be taken out of the partners' salaries. He estimates that he will lose $5000 each year because of the program. Robert finds this upsetting since he has three children who will be entering college within the next five years. He is in full support of the idea that more women should be admitted into the partnership, but he does not believe that his earnings should suffer so that the firm will be more attractive to the female workforce. In addition, Robert believes that some clients may be lost because the availability of the auditors will be more limited on a flexible schedule. Robert Zimmerman. Robert is also a leading partner at Blanchard & Howard in the Boston office. He has been with the firm for over 35 years and is one of the most respected and influential partners in Blanchard & Howard. He strongly supports the concept of flexible scheduling and introduced the idea in prior executive meetings. He has seen many female managers leave to raise children and believes that several of those who left
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would have made excellent future leaders in the firm. In addition, his daughter, who just recently graduated from law school, told Robert that the presence of a flexible scheduling program influenced her choice of a law firm. Based on his discussions with outside recruiters and his daughter, he learned that this program could be an excellent opportunity to distinguish Blanchard & Howard from the other firms in the industry since 52% o f all accounting college graduates are now female. Although financially the program may appear to be losing money, he believes the stronger recruitment classes would attract invaluable clients in the future. Robert believes the intangible benefits more than justify the costs. He is convinced that the cost to run the operation is well worth it. Furthermore, as a leading partner whom many confide in, Robert has become aware of an unintentionally discriminatory corporate culture. He believes that the high female turnover rate in public accounting is also attributable to the failure of firms to integrate women into the culture of the firm. Currently, only 10% of the partners in the firm are female and those who did make partner had to work much harder than their male counterparts. Because of the lack of effective mentors, Robert views this program as the first step in changing the corporate culture to incorporate a more gender-neutral, performance-based attitude. Jessica Marino. Jessica is a partner at the San Francisco office of Blanchard & Howard and has been working for them for 30 years. She has misgivings about this flexible work program. When Jessica first started at Blanchard & Howard, she was the only female professional in her office. She had to struggle and put in very long hours to get in the position she occupies today. Jessica would have liked to have this opportunity when she was at the managerial position years ago; she chose not to have children because she felt she could not manage both a career and a family. Despite the attractiveness of the program, Jessica is also reluctant to support this program. She believes that if staff members are given this opportunity, they might not remain focused on their careers and cost the firm some very valuable clients. New York Highlanders. New York Highlanders is a health care client of Blanchard & Howard that has recently experienced tremendous growth. The president of the corporation, William Randolph, is not pleased with the idea of flexible work programs for his audit firm. He understands the commitment involved in raising children; however, he does not believe an auditor who has just become a parent and is working a reduced schedule will be completely committed to work. Mr. Randolph knows that because New York Highlanders is experiencing rapid growth and is in need of hands-on involvement in developing a more effective internal control structure it is an important client for Blanchard & Howard. He hopes Blanchard & Howard will consider other
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alternatives before assigning them an auditor who is on a flexible work schedule. New York Highlanders works very closely with its auditors and expects and requires a lot from them. If contact with their auditors is limited, this will impose a substantial inconvenience for New York Highlanders and they may consider switching auditors.
Roy White. Roy White works in the Personnel department at Blanchard & Howard and will be a key figure in the implementation of flexible scheduling if it is approved. Roy knows that the program's success requires a total commitment from management. He has researched this type of program in other companies and believes the estimated startup costs will exceed $4 million. The firm will have to hire outside consultants to help with the implementation of this program because Blanchard & Howard does not have the necessary expertise. For the program to work, Blanchard & Howard will have to educate partners such as Robert Richardson who may feel alienated by alternative work arrangements. In addition, employees who opt for the flexible schedule must not be considered "second string" and should have the same opportunities for advancement as everyone else. Roy knows that in comparable flexible scheduling programs in other industries (e.g., law firms), it has taken individuals who enrolled in this program an extra year to reach partnership for each year they were on flexible time. Nevertheless, Roy feels that if Blanchard & Howard can institute change within its corporate culture, the program could succeed. His research of other firms indicates that some of the benefits of this program cannot be estimated in monetary terms. Roy feels this program will help Blanchard & Howard attract some very desirable employees. Although in the short run Roy believes that only women will take advantage of the program, he expects that at some point men may also start to take advantage of it. This will give parents a better opportunity to manage a career and a family. Roy realizes that this is a new concept for the accounting community because in the past, professionals (mainly women) often had to choose between a career or child rearing.
REQUIRED QUESTIONS 1. List the advantages and disadvantages of the reduced workload portion of the program Blanchard & Howard is considering adopting. Classify them as tangible and intangible. Consider both the long-term and short-term issues. Discuss whether the firm is under any ethical obligation to offer this program.
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J.R. Cohen . Who are the internal and external stakeholders in this issue and what do they have to gain or lose if Blanchard & Howard implements flexible scheduling? . In your opinion should the company implement this program? Give specific reasoning to support your view. What other information should you obtain before making a decision? Assume that Blanchard & Howard adopts the plan. Five years later, the firm analyzes the results of the program. Direct costs associated with the reduced workload portion of the program have ranged from $3.2 to $3.6 million per year, approximately 1% of revenues. As discussed in greater detail in the preliminary analysis, these costs include training and educating the professional staff, emergency child care, and monitoring and evaluating the program. Although there are some variable costs, for the most part these costs are committed or discretionary fixed costs. In the five years, the number of female partners in the firm has doubled, so that women are now 20% of total partners. In a similar firm with no part-time policy, the number of female partners has increased 40% over the same time period. In addition, Blanchard & Howard's offer acceptance rate among female college students has increased 25% while the acceptance rate among male students has declined by 10%. .
Robert Richardson, the partner who opposed adopting the program, is still skeptical. He has golfed with clients who have complained about having difficulties reaching their lead auditor. Although no clients have stated that the part-time policy was a factor in their decision to find a new auditor, and Blanchard & Howard revenues have kept pace with the industry, Robert believes that the program is too costly and should be dropped. He still thinks the program is not equitable since 95% of the participants have been women. In contrast, Robert Zimmerman is convinced that since greater diversity has been achieved in the partnership ranks, that the program is a success. Explain in detail why you would either oppose or support continuing the plan.
TEACHING NOTES The purpose of this case is to educate students about the costs, benefits and ethical issues surrounding the topic of flexible scheduling in public accounting. This issue can no longer be ignored. According to a recent survey, women made up over half (52%) of all accounting college graduates, but they hold fewer than 20% of managerial positions in accounting firms. This 20% is surprisingly low considering 40% of all
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female CPAs have been in the field for at least 10 years (Deloitte & Touche, 1993a). Although accounting firms have hired men and women in equal proportions over the past decade, after 6 to 8 years, only two women remain for every three men in the same hiring group (Deloitte & Touche, 1993b). Three primary reasons for womens' departures are the environment, the difficulty of balancing a challenging career and personal life, and perceived obstacles in career advancement opportunities. In addition, Knapp and Kwon (1991) argue that the high turnover rate in public accounting for women is also attributable to the failure of firms to integrate women into the culture of the firm. Collins (1993), in a survey of over 1000 public accountants at the senior or manager level, found that women experience greater stress than men and that the higher stress levels are a significant factor in the greater turnover among women. In addition, Maupin and Lehman (1994) found that a masculine sex-role orientation was significantly correlated with lower turnover and greater job satisfaction. Finally, Park and Lau (1995) found that 30% of women CPAs perceived that there was a "glass ceiling" in their firm.
Development of Case The case was developed by first reviewing literature on gender issues and flexible work arrangements in both public accounting (Hooks & Cheramy, 1989; Parent et al., 1989; Hooks, 1990; Knapp & Kwon, 1991; Coolidge & D'Angelo, 1994; Alter, 1991; Maupin & Lehman, 1994), and in general management (Devanna, 1987; Martinez, 1994; Mock & Bruno, 1994; Thornburg, 1994). Following this review, interviews were conducted with a number of professionals at one international firm that had recently implemented a flexible scheduling program. The case was then reviewed by a partner and senior manager of the firm and by several colleagues. After further refinement, the case was successfully used in two undergraduate cost accounting classes with an enrollment of 80 students as a vehicle to teach "special decisions".
Relevancy of Case in the Accounting Curriculum The Accounting Education Change Commission (1992, p. 250) calls for accounting students to have "the ability to confront unstructured problems--that is, problems with more than one defensible solution." Unfortunately, too often the standard approach to teaching accounting involves reviewing standard homework problems where students are penalized for not having the "correct" solution (Basu & Cohen, 1994). This case is appropriate in the special decisions or relevant costing components of the cost accounting and management accounting courses.
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In these courses, the typical special decisions that are presented involve make or buy, produce or sell at split-off, selling at below regular pricing or capacity constraint. Most accounting textbooks and teaching materials frame these special decisions in terms of products and physical assets. This case demonstrates how the special decision framework can be applied to a human resources problem. For example, students must identify and organize the quantifiable costs and benefits as well as attempt to identify and differentially weight the more nebulous qualitative information. They are forced to confront the difficulties in resolving the conflicting perspectives of various stakeholders. The case may also be appropriate in an auditing class as part of the professionalism and ethics portion of the course. For example, it allows students to reflect on the public accounting work environment in which many will soon find themselves and on the role of men and women as colleagues and professionals. Moreover, auditing students can discuss a public accounting firm's obligation, if any, to help its employees balance their personal and professional lives. Solution to Questions The first question essentially tries to get students to organize their thoughts in a manner consistent with the decision-making process associated with "special decisions" found in most managerial and cost accounting textbooks (e.g., Horngren et al., 1996). Although the costs are easy to quantify and are explicitly stated in the case (i.e., they are estimated to be approximately 1% of total revenues), the quantifying of benefits is a daunting task. The task is made a little easier by requiring students to look at both the short-term and long-term effects. In this case, the benefits are mostly long term and non-quantifiable (i.e., hiring and attracting "better" students, having greater diversity in the management ranks, and reducing turnover among prized employees) and yet the benefits are essential for the viability and relevancy of the public accounting firms in an increasingly diverse business environment (AICPA, 1994). For example, in the AICPA's report on women's status in the profession, one managing partner of a large firm said (p. 9): "There are more women on corporate boards. They feel it, and when you show up with an all-male team, they're looking at you like 'what are you doing?' So, there are forces going the other way". Moreover, Coolidge and D'Angelo (1994) state (p. 19): "every time a business loses an experienced woman and trains someone new, it loses time and money--up to 150% of a year's salary at the managerial level". It must be noted that although the flexible scheduling program is open to both genders, the interviews with the professionals strongly reinforced the idea that in reality it would overwhelmingly be women who would take part in the flexible scheduling program.
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Some students also raised concerns about some costs that are difficult to quantify. For example, a number of students were concerned that participants in the program could lose their career focus. Other students were concerned that, for a program like this to work, a significant time and prestige commitment must be made by all levels of management. Students are also asked here to consider whether there is any ethical or moral obligation to adopt this program. The ethical issues could be framed in terms of the professional code of conduct (e.g., the principles) or in terms o f general ethical philosophies (e.g., theories of justice, rights, or utilitarianism). To answer the second and third questions, students must attempt to identify the various stakeholders and weight the relative importance of their positions. By having students identify the stakeholders, the case is framed in terms of both economic and ethical issues. In this case, the stakeholders (at a minimum) would be the various constituents that are represented by the actors of the case. For example, New York Highlanders is an important client of Blanchard & Howard. They are entitled to receive the highest quality audit in relation to the fee that they are paying. Isn't it reasonable for their management to expect the manager or partner of the engagement to be physically present as much as possible? Interestingly, a number of students commented on how the rapid changes in technology (e.g., fax machines, modems, cellular phones) could alleviate some of these difficulties. The issue of audit switching due to the dissatisfaction with service could also be raised here. It is also appropriate to integrate the literature in practice development (e.g., Hooks & Sincich, 1994) and to discuss how important practice development skills are to making partner. For example, a number of students raised the issue of whether women on a flexible schedule could be successful in generating new business. Another interesting stakeholder is Shelly Martinez, a senior manager at the firm. She would benefit tremendously from the program and would attempt to move up to partner at the firm. Her commitment to the firm would probably increase and she will probably be more efficient while she is performing her job. However, it is very difficult to measure these benefits. Students could be asked to develop performance criteria that could capture these advantages. In discussing Ms Martinez, students could also examine the interaction effects among stakeholders. For example, she is the direct supervisor and mentor to Elaine Noble. If Martinez is not easily accessible, Elaine Noble potentially loses an important mentor in her career. This is very important because Fagenson (1989), Dirsmith and Covaleski (1985), and Scandura and Viator (1994) all found that professionals with strong mentors were promoted more rapidly than individuals who did not have strong mentors. In addition, Scandura and Viator (1994), in a survey of managers and staff accountants in large public accounting firms, found that (p. 729) "prot6g6s who identified a
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female mentor reported receiving significantly higher levels of social support, compared to female prot6g6s who had identified a male mentor". Similar sets of analyses should be conducted for all the various stakeholders before an appropriate solution is presented. Table I lists all relevant stakeholders and briefly summarizes their positions. The last question is assigned to have students examine whether the only criterion that should drive accounting-based decision making is whether the decision increases the profitability of the firm. To counter that narrow perspective, I strive to have students look at the notion of working in "the
Table 1. Stakeholders' positions Stakeholder Joshua Gibson
Stance on the issue Reasons
M i x e d - - u n d e c i d e d Relieves women must be retained at a greater rate. The program is too costly Emma Goldman For She wants to manage a career and job in the future Shelly Martinez Mixed--for She would keep her job if the program is approved. Afraid the firm will lose clients if implemented. Worried about her promotion after flex scheduling Elaine Noble Mixed--for Wants to keep her mentor relationship. She doesn't like subsidizing others' children. Relieves the communication advances makes flex scheduling feasible. It addresses family issues in business. She would have more authority if Shelly left the firm Robert Richardson M i x e d - - a g a i n s t He is supportive of more women entering partnership. He does not like the cost of the program and questions the quality of work done by flex-time partners Robert Z i m m e r m a n For The company is losing top quality female managers at a time when women make up the majority of the entering workforce. There are possible advantages in recruiting high quality women Jessica Marino Mixed--against She believes that something must be done to accommodate raising children. She is envious that she did not have the same opportunity. She chose not to have children to get where she is now. She thinks the quality of the partners' work will decline once they switch to flex-scheduling New York Against Concerned with the availability and Highlanders quality of work completed by flex-time audit staff Roy White Mixed--for He believes it will alter the corporate culture in a very positive way. He feels that there should be a way to balance family and career
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Public Interest." Students are given the opportunity to incorporate in their decision-making process both the quantifiable costs associated with the program and some factors that are ignored in more traditional accountingbased perspectives. I endeavor to demonstrate to students that in the long run, acting in the public interest often helps increase profitability. For example, students can discuss whether society as a whole would be better off if flexible work arrangements were in place to allow professionals in public accounting to better manage the juggling act that is inevitable in today's society. Students can also discuss the costs associated with the program. One student commented that dropping the program would result in a lot of negative publicity. This type of analysis reinforces the notion that accounting is not a black-box discipline, but one that requires a tremendous amount of professional judgment. CONCLUDING
REMARK
This case was developed in the spirit of change that is permeating both the public accounting environment and the accounting curriculum. It can be used in a variety of courses to illustrate the difficulties and challenges that many of our students will confront in public accounting. The case strongly reinforce the importance of developing judgment and decision making skills as opposed to memorization skills in accounting courses. Acknowledgements--I gratefully acknowledge the superb and invaluable assistance provided by Laura Merino in helping develop the case, the professional staff of one international public accounting firm for giving so much of their time in interviews and feedback, and the insightful comments made by Theresa Hammond, Peter Kugel, Arnie Wright, Elaine Harwood, Tom Porter, Greg Trompeter, and the students at the Carroll School of Management at Boston College. An earlier version of the case was presented at the 1!)95 Northeast American Accounting Association Meeting.
REFERENCES Accounting Education Change Commission (1992). The first course in accounting: position statement no. 2 Issues in Accounting Education, 7, 249-251. American Institute of Certified Public Accountants (AICPA) (1994). Women's status and work/family initiatives in public accounting. New York: AICPA. Alter, J. (1991). Retaining women CPA's Journal of Accountancy, 50 55. Basu, P., & Cohen, J. (1994). Learning to learn in the accounting principles course: outcome assessment of an integrative business analysis project Journal of Accounting Education, 12, 359-374. Collins, K. M. (1993). Stress and departures from the public accounting profession: a study of gender differences Accounting Horizons, 29-38. Coolidge, L., & D'Angelo, D. (1994). Family issues to shape the profession's future The CPA Journal, 16-21. Deloitte & Touche (1993). Women in the 90's: a business imperative Team Bulletin, 3 I 1. Deloitte & Touche (1993). The results of work/life balance survey. Team Bulletin, 3 7.
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Devanna, A. (1987). Women in management: progress and promise Human Resources Management, 26, 469-481. Dirsmith, M. W., & Covaleski, M. A. (1985). Informal communications, nonformal communications and mentoring in public accounting firms Accounting, Organizations and Society, 149-169. Fagenson, E. A. (1989). The mentor advantage: perceived career/job experiences of prot6g6s versus non-prot6g6s Journal of Organizational Behavior, 309-320. Hooks, K. L. (1990). Let's give alternative work schedules a chance, Journal of Accountancy, 8 !-86. Hooks, K. L., & Cheramy, S. J. (1989). Coping with women's expanding role in public accounting Journal of Accountancy, 66-70. Hooks, K. L., & Sincich, T. L. (1994). Methods used by big six partners in practice development Auditing: A Journal of Practice and Theory, 101-114. Horngren, C. T., Foster, G., & Datar, S. M. (1996). Cost Accounting: A Managerial Emphasis, 9th Edn. Englewood Cliffs, NJ: Prentice Hall. Knapp, M. C., & Kwon, S. (1991). Toward a better understanding of the underrepresentation of women and minorities in big eight finns Advances in Public" Interest Accounting, 47-62. Martinez, M. N. (1994). Flexible ways to work. FMLA headache or opportunity HR Magazine, 42-45. Maupin, R. J., & Lehman, C. R. (1994). Talking heads: stereotypes, status, sex-roles and satisfaction of female and male auditors Accounting, Organizations and Society, 427-437. Mock, C. & Bruno, A. (1994). The expectant executive and the endangered promotion Harvard Business Review, 16--18. Parent, D., DeAngelis, C., & Meyers, N. (1989). Parity for women CPA's Journal oJ Accountancy, 72-76. Park, L. J., & Lau, R. (1995). Is accounting a good career for women in the 1990's? New Accountant, 8-11. Scandura, T. A., & Viator, R. E. (1994). Mentoring in public accounting firms: an analysis of mentor-prot~g+ turnover intentions Accounting, Organizations and Society, 717-734. Thornburg, L. (1994). Flexible ways to work: change comes slowly HR Magazine, 46-49.