We Don’t Need Number-Crunchers Anymore!

Last week I went to the US for participating in a research conference. When I finally ended up at the desk of the customs officer, he asked me about my plans in the US. I answered that I would participate in a research conference about accounting. He quickly replied with the words ‘Accounting, that’s just number-crunching!’. I am quite sure that every accountant has had such an experience when telling about his/her job. Also, if you search for cartoons that make fun of accounting or accountants, most cartoons make the connection with numbers. A cartoon as the one below is definitely no exception. The question arises whether ‘number-crunching’ (or being good in dealing with numbers) is really the most important characteristic of an accountant? And if other characteristics are proposed as important, do we have reliable evidence which shows the importance of these characteristics? The goal of this opinion is to provide you with an answer on these two questions.

Let’s be clear from the beginning: being good in dealing with numbers is (and will always be) an important characteristic of accountants.  However, if we look at how accounting firms are organized, it becomes clear that accountants also should have well-developed leadership skills. Specifically, compared to other professions, young accounting professionals have to take up a leadership position quite early in their career. For instance, it is no exception that accountants with only 3 years of experience have the lead of an audit engagement. Of course, the final responsibility resides with the audit partner, but as the audit partner is not that often present ‘on the floor’ the real leader is the young accounting professional. As human beings are quite heavily influenced by their leaders, it can be expected that the behaviour of young accounting professionals that lead an audit team has a considerable impact on the behaviour of the younger accounting professionals they have to supervise.

Walking The Talk

Together with my colleague at the accounting department of Tilburg University Sofie Vandenbogaerde, I decided to investigate whether the leadership of the young accounting professional, who often has the title ‘Senior Associate’, has an impact on the behaviour of the accountants they supervise, who often have the title ‘(Junior) Associate’. We decided to investigate how the leadership style of senior associates has an impact on the job satisfaction of associates because job satisfaction is known to be a very good predictor of staying at the organization or the industry. Investigating the relationship between leadership and job satisfaction can thus help us to come to a better understanding of the reasons why a lot of young (and often very talented) accountants leave the profession early in their career. The leadership style that we investigated is called ‘behavioural integrity’ and reflects the extent to which the senior associate ‘walks his/her talk’ or ‘practices what he/she preaches’.  A lack of (general) behavioural integrity emerges, for instance, when the senior associate does not get managed to have more accountants on the audit engagement although he has promised more accountants to the currently understaffed team. Another example of a lack of (audit-specific) behavioural integrity is when the senior associate does not strictly follow an audit procedure because he is very busy although he/she always emphasizes to his/her associates that being busy is not a good excuse for not following the audit procedures.

We send our survey to all the first and second year associates of a Big4 accounting firm in the Netherlands and received 160 responses. The most important finding of our study is that behavioural integrity matters and that associates are more satisfied with their job when the senior associate ‘walks the talk’. Interestingly, we find that the effect of behavioural integrity on job satisfaction of associates goes through two different paths. First, when the senior associate ‘walks the talk’, a team environment emerges in which associates can openly discuss the problems he/she experienced (or even commit errors) without fearing for personal consequences because matching words and deeds is perceived as a signal of trust. Our results further reveal that this open team environment increases the job satisfaction of the associates. Second, we find that the behavioural integrity of the senior associate also has a positive impact on the strictness with which associates follow the audit procedures. This strictness has then also a positive impact on the job satisfaction of the associate. Thus, our results reveal that a senior associate who walks the talk has a positive influence on the job satisfaction of associates through creating a better learning environment and through increasing the strictness with which audit procedures are followed.

Focus On Leadership

The results of our study are important because they show that the behaviour of senior associates can help to address the problem of talented young accountants leaving the accounting profession. Also, our results suggest that behavioural integrity has the power to influence two aspects of the accounting setting (i.e. the strictness with which audit procedures are followed and the openness of the culture) that the council ‘Toekomst Accountantsberoep’ proposes to address in order to restore the trust in the accountant. Our main advice for the accounting firms is that they should use leadership capability as a selection criterion when hiring new accountants or promoting associates to the senior level. Also, accounting firms and universities should offer training programs that are focused on developing the leadership skills of young accounting professionals.  The interesting feature of behavioural integrity is that it is a very intuitive leadership characteristic that does not need very long (and expensive) leadership trainings. We truly hope that these research findings find their way to the accounting profession and that these findings help to keep the most talented accountants in the profession, as such an evolution is important to restore the trust in the auditor. An interesting by-product of developing accountants that are also good leaders is that we will not be accused anymore for being number-crunchers by customs officers, cartoonists, and the general public!

Readers interested in the full paper on which this opinion is based or in a more elaborate explanation of the results and the implications for the accounting profession can contact Bart Dierynck at b.dierynck@tilburguniversity.edu