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As a professor of accounting at a public university, the authors believe that the accounting profession has an obligation to combat implicit biases. Some may argue that combating bias is beyond the scope of accounting education; however, for years, audit firms have educated new auditors about cognitive biases in order to help them overcome them (Michael C. Knapp and Carol A. Knapp, “Cognitive Biases in Audit Engagements,” The APC Journal, flight. 82, no. 6, p. 40-45, 2012). While such training has traditionally focused on heuristic biases such as confirmation bias and anchor bias, implicit bias also deserves attention.

Implicit bias, defined as “attitudes or stereotypes that affect understanding, actions or decisions in an unconscious way”, is a pervasive social phenomenon [Kirwan Institute for the Study of Race and Ethnicity (Ohio State University), “Understanding Implicit Bias,”]. It is relevant in accounting education because of the stewardship role of accounting. According to the FASB Conceptual Framework, a primary function of financial accounting is to help external stakeholders determine “the extent to which the entity’s management and board of directors have fulfilled their responsibilities to use entity resources ”(“ FASB Concepts Statement No. 8, Conceptual Framework for Financial Reporting – Chapter 1, The Objective of General Purpose Financial Reporting ”, 2010, The danger is that unconscious biases could result in a different assessment of non-white or female leaders compared to their white male counterparts, even when the underlying financial performance is the same.

In the context of assessing CEO performance, the “halo bias” is particularly salient. More precisely, it is the tendency to allow the assessment of a specific trait possessed by an individual to be influenced by the other traits of that individual. A body of research suggests that gender plays a role in how CEOs are evaluated. For example, a recent study found that female CEOs face more threats from activist investors than male CEOs. [Vishal K. Gupta, Seonghee Han, Sandra C. Mortal, Sabatino (Dino) Silveri, and Daniel B. Turban, “Do Women CEOs Face Greater Threat of Shareholder Activism Compared to Male CEOs? A Role Congruity Perspective,” Journal of Applied Psychology, vol. 103, no. 2, pp. 228–36, 2018,]. We can infer that an implicit bias also comes into play when non-white CEOs are assessed, although the smaller sample size of black CEOs provides a smaller set of empirical evidence.

Implicit biases can affect the understanding of accounting information

The naive view of financial reporting views accounting as hard, hard data with little room for subjectivity. But sophisticated users of financial statements know that considerable judgment is required to interpret accounting information meaningfully. In a recently published case study that is part of the orientation for new MBA students at Baruch College at the City University of New York, students take on the role of external actors evaluating the tenure of McDonald’s first black CEO; the case study is based on financial data as well as other information from the public record (Lee B. Boyar and Paquita Davis-Friday, “Assessing a Golden Opportunity: CEO Performance at McDonald’s”, CASE newspaper, flight. 15, no. 5, p. 397-415, 2019, Students debate whether certain aspects of the company’s financial performance, reflected in the bottom line, are attributable to the CEO’s efforts or beyond his control.

A profession concerned with stewardship has a responsibility to combat racial and gender stereotypes.

Reduce the impact of implicit biases in the interpretation of financial information

Accounting professionals are usually subject matter experts who learn about gender and racial biases. In addition, accounting programs are full of technical information. Given these constraints, the authors put forward two proposals to reduce the impact of implicit biases in the interpretation of financial information.

First, care must be taken to avoid selecting courses and training materials that inadvertently perpetuate harmful societal biases. The economics profession has come under scrutiny for, among other things, having provided too few examples of women leaders in economics textbooks (Betsey Stevenson and Hanna Zlotnik, “Representations of Men and Women in Introductory Economics Textbooks” , Documents and acts of the AEA, flight. 108, p. 180-185, 2018, The accounting profession should also consider this issue. The above-mentioned McDonald’s case study was published in an issue of the CASE Journal which sought to correct an imbalance where “less than 1%, or about 70, of the 10,000 teaching cases published at Harvard feature black business leaders” (Mary Kuchta Foster and Pamela Queen, “Letter from the Editor,” CASE newspaper, flight. 15, no. 5, pp. 357-361, 2019,, citing Brett Milano, “Black Leadership, Front and Center”, Harvard Journal (blog), May 12, 2017, Business trainers are responsible for presenting various examples.

Second, students and practitioners should be made aware of the potential for implicit bias. As stated in a useful and publicly accessible training session on the subject: “External research shows that awareness of unconscious bias can lead to reversals of biased results” (Google Re: Work, “Raise Awareness about Unconscious Bias” , https: // bit .ly / 321ys3n). Even a brief mention of the possibility of unconscious bias in an accounting course might be effective in getting students to think about the possibility that they harbor bias. Incidents of implicit bias occur in contexts that students can relate to. For example, an empirical study found that female teachers were rated lower by business students than their male counterparts (Friederike Mengel, Jan Sauermann and Ulf Zölitz, “Gender Bias in Teaching Evaluations”, Journal of the European Economic Association, 2018, Students can be asked to consider whether it is likely that after graduation the same biases remain in play when assessing female executives. A very readable discussion of the study appeared in the Economist (“Research Suggests Students Bias Against Female Teachers,” September 21, 2017,

A profession concerned with stewardship has a responsibility to combat racial and gender stereotypes. Such a proposal is not revolutionary – rather, it is a natural extension of the work the profession has traditionally done to combat heuristic bias. Done skillfully, it will develop critical thinking skills that enhance accounting knowledge and enhance its application.

Paquita Y. Davis-Friday, PhD, CPA, is Senior Associate Dean at Zicklin School of Business and Professor in the Stan Ross Department of Accounting, Baruch College, New York, NY

Lee B. Boyar, CPA, is a professor at LaGuardia Community College, City University of New York.

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