Newsmakers | United States
A new crack appeared in the corporate glass ceiling in February, when Cathy Engelbert was appointed CEO of Deloitte US, becoming the first woman to lead one of the Big Four audit and consulting firms in the United States (the other three are PwC, EY and KPMG). “It is a critical step,” says April Klein, professor of accounting at New York University Stern School of Business. “Accounting firms are trying to be more family-friendly and are attracting more women to their ranks, so having a woman in the top spot is very important.”
A certified public accountant, Engelbert is an old hand at Deloitte, having been with the firm since 1986. Before taking over as CEO, she was the chairman and chief executive of Deloitte’s US accounting, auditing and risk advisory subsidiary, Deloitte & Touche. She is also on the Financial Accounting Standards Advisory Council, a body that advises the Financial Accounting Standards Board (or FASB) on ongoing projects.
Engelbert, who succeeds interim CEO Frank Friedman, takes the helm at a time when regulators of the financial services industry are applying tougher standards to accounting and auditing firms. “Both [the] Dodd-Frank [financial reform law] and the Public Company Accounting Oversight Board have increased their scrutiny,” says Klein. “The PCAOB in particular has been very aggressive in examining audits.” The US Congress instituted the PCAOB in 2002 to bring more transparency to the industry, largely in response to the Enron scandal and the resulting dissolution of accounting firm Arthur Andersen.
Audits have become not only more strictly supervised but also more complicated. “Many companies now operate internationally, sometimes having subsidiaries in countries in which it may be more difficult to do the auditing,” says Klein. With the industry becoming more and more specialized, the New York University professor says finding and retaining skilled people will represent another challenge for Engelbert, who has vouched to significantly increase the firm’s workforce in the coming months. She becomes CEO effective March 11 and will serve a four-year term.