CASE 7.4
HOPKINS V. PRICE WATERHOUSE
Synopsis
In 1983, Ann Hopkins was nominated for promotion to partner with Price Waterhouse. Hopkins,
a senior manager in the firm at the time, seemed to have excellent credentials for a partnership
position. In fact, of the 88 individuals nominated for partner that year, Hopkins had generated by far
the most client revenues for the firm. Hopkins was also unique in that she was the only female
among the partner candidates. Unfortunately for Hopkins, she was not promoted to partner and was
The principal purpose of this case is to focus attention on several issues facing women entering
the public accounting profession. Probably the most perplexing of these issues is the difficult task of
successfully managing a professional career and having a family. Ann Hopkins, an energetic mother
of three small children during her tenure at Price Waterhouse, achieved a good balance between her
home life and professional work role. Another challenging issue that women public accountants face
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Hopkins vs. Price Waterhouse—Key Facts
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1. Historically, females and minorities have been under-represented in the large international
accounting firms, particularly at the partner level.
2. Early in her career, Ann Hopkins had been forced to resign from Touche Ross because that firm‘s
nepotism rule precluded her and her husband from both being considered for promotion to partner.
4. Hopkins had generated more revenues for Price Waterhouse than any of the other partner
candidates.
6. The trial in Hopkins’ suit against Price Waterhouse revealed that several partners had made sexist
remarks regarding her qualifications for partner.
8. Evidence presented during the trial confirmed that Hopkins had deficiencies in her interpersonal
9. The judge hearing Hopkins’ suit ruled that she had been evaluated by Price Waterhouse as a
female partner candidate rather than simply as a partner candidate.
11. In 1990, Hopkins was awarded a judgment of $400,000 against Price Waterhouse; the firm was
also ordered to offer Hopkins a partnership position, an offer she accepted.
Instructional Objectives
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1. To demonstrate the unique challenges that women face in pursuing a public accounting career.
2. To illustrate that discriminatory attitudes against women public accountants may be latent within
the culture of their employing firms.
Suggestions for Use
This case can be integrated at practically any point in an auditing course. The most obvious
point at which to discuss this case would be during coverage of the introductory chapter in the
standard auditing text, a chapter that typically provides a broad overview of the public accounting
profession, including the changes it is undergoing and the challenges it faces in the future. However,
rather than discussing this case early in the semester, I typically defer presenting it until
mid-semester. In a sense, I use this case to give my students a brief “break” from the technical
aspects of auditing.
The key purpose of this case is to sensitize both male and female students to the unique
challenges that women public accountants face in their careers. Making both sexes aware of the
subtle but often pervasive nature of sexual discrimination is the first step toward remedying this
problem. As noted in the case, the presiding judge in the Hopkins suit against Price Waterhouse
Accounting, Vol. 4 (1991), pp. 47-62.
Suggested Solutions to Case Questions
1. This is a question that typically generates quite different responses from students. Generally, the
majority of students suggests that public accounting firms have an obligation to adopt policies
designed to help women overcome the barriers to success that they have historically faced in the
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public accounting profession. However, my experience has also been that a certain proportion of
male students will mention the phrase “reverse discrimination” when they respond to this question.
a. Accounting firms could make greater use of females and minorities in their recruiting
processes.
b. The large offices of public accounting firms could adopt a policy of having at least
one female and/or minority involved in their personnel function. Females and
minorities would likely be more comfortable in discussing sensitive issues related to
job discrimination with such an individual.
2. The “old boy network” is a phrase generally used in reference to a small clique of key
decision-makers within an organization. As the term implies, typically all of the members of such
groups are male. In most cases, this phrase has pejorative connotations. For instance, members of
an old boy network are often perceived as protecting and furthering their own economic
self-interests and those of their colleagues at the expense of individuals outside their clique.
Should professional firms attempt to break down old boy networks? Certainly, it does not appear
3. The key criterion in assigning auditors to audit engagements should be the personnel needs of
each specific engagement. For instance, one engagement may need an individual with significant
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EDP auditing experience, another engagement may require an individual with knowledge of
sophisticated cash management systems, etc. Certainly, client management has the right to complain
regarding the assignment of a particular individual to an audit engagement if that complaint is
4. Nepotism rules have been adopted in many settings, not just professional firms. Historically, the
principal purpose of such rules has been to ensure that the leadership positions within an
organization are “earned” rather than “bequeathed.” That is, organizations adopting such rules
believe that competence should be the key factor in the determination of which individuals are given