The accountancy profession has made significant investments in diversity, equity and inclusion (DEI) initiatives – over $470 million – to help attract more diverse talent to the profession. The industry works collectively to encourage students from diverse backgrounds to study accounting at university and emphasize accounting as a rewarding career.
However, industry representatives acknowledge that although the profession has seen an increase in the number of groups entering the field, further progress needs to be made. The number of black people entering the profession has remained stagnant since we began analyzing demographic trends over the past 20 years, says Liz Barentzen, vice president of operations and talent initiatives for the Center for Audit Quality. (CAQ), which represents the auditors of public companies. and works to improve audit quality in the United States. This despite the fact that the percentage of undergraduate students identifying as people of color is currently 45%, down from 30% in 1996.
“We know that companies in all industries are strengthened when they employ people with different backgrounds, ideas and experiences,” Barentzen said. “That’s why, as a profession, we can – and must – do more.”
Concern about the lack of diversity is not new to the profession. CAQ member companies have been discussing the issue since 2017, when U.S. Chairman and PwC Senior Partner Tim Ryan created CEO Action for Diversity and Inclusion, a group of CEOs from 85 industries who are committed to advancing diversity. and inclusion in the workplace. “We have had — and continue to have — conversations at the board level about the need for more equitable representation within the talent pool and across the profession,” Barentzen says.
In early 2020, the CAQ invited the chief diversity officers of its eight member firms to discuss concrete ways to increase diversity, equity and inclusion within the profession, Barentzen said. The major cases of social injustice in early 2020 and the resulting protests “really elevated and propelled the discussion forward,” she says.
The current landscape
About 60% of people with a bachelor’s degree in accounting identify as white, according to the Integrated Postsecondary Education Data System, compared with 7% identifying as black or African American and 13% as Hispanic or Latino.
To better understand why so few black and Hispanic students pursuing studies in accounting, the CAQ surveyed nearly 4,000 students. Results showed that Black and Hispanic business majors who have either considered accounting degrees or taken introductory accounting courses perceive several barriers to entering the profession. These include worries about an unsatisfying career in accounting, a perceived lack of passion or interest in the job, and financial considerations related to obtaining the CPA license.
In other words, “more needs to be done to change perceptions and support students on their career paths,” Barentzen said.
Ways to diversify the talent pool
To help change perceptions about the profession, the CAQ is partnering with NABA Inc., the National Association of Black Accountants, to help Black community college students seamlessly transfer to a historically Black college or university ( HBCU) to pursue a four-year degree in accounting.
CAQ research found that black community college students had the highest level of interest in becoming an accountant. “More than 80% of black community college students we surveyed said they had an interest in accounting, but that initial interest is not translating into more accounting majors,” Barentzen said.
To facilitate this transition, the CAQ has partnered with NABA to develop a pilot program with three community colleges and three HBCUs in Maryland, Virginia and Washington, D.C., which will work together to help black people students interested in pursuing an accounting degree seamlessly transfer into a four-year accounting program at an HBCU. “We are developing a hands-on program for students to connect them with mentors, tutoring services and other resources to help them,” says Guylaine Saint Juste, President and CEO of NABA Inc.
The CAQ and NABA plan to expand the pilot program in the future.
“Getting an accounting degree will open up a lot of possibilities,” says Saint Juste. “The language of money is accounting. The language of wealth is accounting. The language of business is accounting. I think once you get that accounting degree, the sky is the limit.
Yet many black students are hesitant to pursue a career in accounting. “When you look at associates in companies, less than half a percent of associates in companies are black,” says Saint Juste. Many young students, especially black students, mistakenly believe that they must have excellent math skills to succeed as an accountant.
Advances in technology have changed the skills needed to excel in the profession. “It’s not a math-based career anymore,” Barentzen says. Communication skills and the ability to interpret and understand data are the essential skills needed today.
ABarentzen added, “It’s essential to change perceptions about what skills are actually needed.” The CAQ is working with Culture One World, a minority-owned creative agency, to develop a campaign, Accounting+, which will help change perceptions about accounting among younger and more diverse audiences. The campaign uses platforms like TikTok and Instagram to reach younger audiences. “We need to reach students where they are, and our research shows that social media is a place where kids get information about careers,” Barentzen says.
One message that particularly resonates with black students is that accounting is a pathway to entrepreneurship. “A track in accounting gives you a path to prosperity,” says Saint Juste.
The profession doesn’t expect to see success overnight, next year or maybe even two years from now, Barentzen says. Long-term success means seeing more diversity in the talent pool and that will take time.
While each member company has its own individual DEI hiring goals, the average goal to increase workforce diversity is 45%. For example, PwC aims to achieve 35% black, Hispanic, and Latino representation among experienced and entry-level hires and interns. PwC also aims for 50% of its partnerships to be comprised of women and people of diverse races/ethnicities as part of its efforts to develop an American workforce that reflects the diversity seen in higher education. Grant Thornton is working on a 25% increase in new recruits identifying as black or African American, Hispanic or Latino.
“The goals the firms have set are ambitious and they clearly demonstrate the importance of diversity within the profession, but we need to diversify this pipeline, and the only way to do that is collectively,” Barentzen said. “We need to increase the number of accounting graduates over time before we can see the numbers increase significantly within companies.” The profession will share best practices and research, as well as its progress, related to diversity and inclusion through its Bold ambition country.
NABA plans to measure success by the impact of its program. “We know black representation continues to be pretty stagnant at 5%, so for me the impact would be that five years from now we see black representation on the pitch hitting 6%,” Saint Juste says. “I know someone would say it’s just 1 or 2%, but we actually moved the needle.”
Another indication of NABA’s success will be the program’s retention rate, Saint Juste says. NABA would like to see more black graduates get an accounting degree compared to other degrees.
However, to really advance diversity, Saint Juste says, employees at accounting firms need to be more like the general population. “We need to stop talking about diversity and we need to start talking about inclusion,” she says. “I don’t know how we create inclusion without belonging, and we can’t create belonging without representation.”