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Opening the Books on Diversity Progress in Accounting

Educators, Professionals Highlight Programs, Discuss Challenges

Although progress has been made to diversify the accounting profession since 1921 when John Wesley Cromwell became the nation’s first Black CPA, there is still much work left to do.

According to the 2021 Trends Report by the Association of International Certified Public Accountants (AICP), only 2% of CPAs at U.S. firms are Black. Additionally, the report found that only 5% of the firms’ CPAs were Hispanic and 14% were Asian/Pacific Islander. The report also found that while gender diversity in accounting had increased to 46% of CPAs, women are still underrepresented in leadership roles.

PhD Project

Blane Ruschak
President
PhD Project

“We’ve got some work to do when it comes to diversifying the accounting field,” said Blane Ruschak, president of the PhD Project, a nearly 30-year-old organization dedicated to diversifying the business world by helping professionals from underrepresented groups achieve doctorate degrees in business.

In late July of last year, the PhD Project held its annual conference for the accounting profession in San Diego. The two-day event featured informational workshops and support sessions for both accounting doctoral students and faculty.

“The most important part of this whole conference is meeting others who are going through similar problems as you are, with similar backgrounds,” said Pablo Machado, Ph.D., a PhD Project alumnus and an assistant professor at the Charles W. Lamden School of

Pablo Machado, Ph.D.,
Assistant Professor
Charles W. Lamden School of Accountancy, SDSU Fowler College of Business

Accountancy in the SDSU Fowler College of Business.  “There were a few instances where, as a Ph.D. student, I was struggling with discussing research with faculty members. The PhD Project Accounting Doctoral Students Association (ADSA) provided me the opportunity to bounce ideas off of other students.”

Similar to the ADSA, the PhD Project also has an Accounting Faculty Alumni Association (AFAA) to support Black, Hispanic and Native American faculty.

“The primary benefit for the faculty is the ability to talk with PhD Students and meet with our peers to discuss research and challenges that we’ve encountered,” Machado said, adding that AFAA members “serve as mentors to ADSA students, providing feedback on research and the occasional shoulder to lean on.”

State of Diversity in Accounting

Students and young professionals from underrepresented groups pursuing careers in accounting have a much smaller pool of people who look like they do to lean on for support. Percentages and numbers of diverse groups in accounting vary depending on the metrics and parameters of different studies, but all of them have the same conclusion:

“In a nutshell, the accounting profession remains a very non diverse industry,” summed up Steve Sublett, senior vice president of CBIZ Benefits & Insurance Solutions Inc. and co-chair of the CBIZ Diversity and Inclusion Task Force.

Steve Sublett
Senior Vice President
CBIZ Benefits & Insurance Solutions Inc.

Sublett pointed out that somewhere between 66% and 70% of the accounting workforce in the U.S. is White Non-Hispanic compared to 2020 U.S. Census data showing the general population of White Non-Hispanics in the U.S. is only 57.8%.

Ruschak pointed out that according to AICPA research in 2020, that a combined 7.2% of Black, Hispanic and Native American accountants achieved CPA status compared to 77% of their white counterparts.

“When it comes to partner status, the 7.2% number stays the same, but this time it’s compared to 82% of white accounting professionals,” he added.

Where the industry is showing “incremental progress,” Ruschak said, is in entry-level accountant positions where Black and Hispanic new hires in accounting have all increased by nearly one or more percentage points.

“The numbers are starting to move in the right direction, but there is still a need for much improvement in accountant diversity,” he said.

Diversity in students working toward accounting degrees is also “getting better,” Machado said, “However, it isn’t great.”

Machado pointed out that in the 2020 Census approximately 33.80% of the U.S. population identifies as Black/African American, Native American and Hispanic/Latino, yet underrepresented minority (URM) students earning accounting degrees only represented 20.44% in 2020 – up from only 18.79 in 2015.

“On a positive note, SDSU’s URM undergraduate enrollment in accounting is 32%, significantly higher than the average,” he said.

Improving the Industry’s Diversity

The increases in diverse students pursuing accounting degrees and the uptick in the diversity at entry-level positions is a sign that industry-wide and company specific efforts to attract more diverse talent to the profession is having an effect.

Jen Wyne
Executive Director, Human Resources
Moss Adams

“While historically accounting has not been particularly diverse, I would say in the last five years there has been even more focus and concerted effort by the profession to attract, develop and retain a more diverse workforce,” said Jen Wyne, executive director of human resources at Moss Adams. “There’s a level of collaboration that hasn’t previously existed to address the barriers and challenges to entry and success underrepresented groups experience in the industry. I’m encouraged by the deliberate focus and intent to make meaningful progress.”

Deloitte is one prominent example of a firm making meaningful progress. From 2021 to 2022, the firm increased its total Black workforce from 4,296 to 6,869 and its total Hispanic workforce from 4,239 to 5,931.

In addition to increasing the diversity of its total workforce, Deloitte has developed specific programs and goals to increase diversity in its accounting business. In 2021, the firm announced the establishment of Making Accounting Divers and Equitable (MADE) – a $75 million commitment to create more advisory, auditing and tax career opportunities and leadership pathways for future CPAs of diverse backgrounds.

Parallel to the MADE commitment, the Deloitte Foundation expects to fund $30 million in scholarships for students over the next several years, including students interested in pursuing a fifth-year master’s degree in accounting, master’s of tax or master’s of accounting with a concentration in audit, advisory or tax through the Deloitte Foundation Accounting Scholars Program. The Deloitte Foundation is collaborating with nearly 20 participating colleges and universities across the U.S. to increase representation of racially and ethnically diverse students in these programs.

The remaining MADE funding will go toward programs to: aid working professionals pass the CPA exam by providing tutors and paid time off; help faculty at Historically Black colleges and universities (HBCUs) and Hispanic-serving institutions (HSIs) develop accounting curriculum; help position mid-career accounting professionals for senior roles within their organizations; and prepare youth for long-term success by collaborating with colleges, state CPA societies, non-profits and high schools to promote accounting as a profession to underserved populations.

Juli Moran
Managing Partner
Deloitte, San Diego

“We have identified that lack of awareness of the accounting profession is a barrier that can prevent racially and ethnically diverse students from selecting majors and degrees that align to the accounting profession,” said Juli Moran, managing partner of the Deloitte San Diego office.  “We have recognized this as a significant challenge to increasing the supply of accounting professionals as they complete their university level education.  As a result, many of our firm and local San Diego efforts have been focused on actively participating in career fairs at the high school level. In addition, our practitioners are engaged with a number of nonprofits as mentors to a diverse student community in order to get them excited about a career in accounting.”

Like Deloitte, KPMG is another national “Big 4” firm that has made substantial diversity goals. In fact, the PhD Project was initiated by the KPMG Foundation in 1994 before it became its own 501 (c) 3 nonprofit.

Cathy Gonzales
Managing Partner
KPMG, San Diego

“Since The PhD Project’s inception, the number of Black/African American, Hispanic/Latinx and Native American scholars earning a business Ph.D. in the United States has quintupled, from 294 to over 1,600,” said Cathy Gonzales, managing partner of the KPMG San Diego office. “That’s a 500% increase in 27 years.  And, close to 300 PhD Project members are currently enrolled in doctoral programs.”

Beyond its involvement with the PhD Project, Gonzales said, KPMG has a “firmwide commitment to attract, retain and advance underrepresented talent at KPMG and in the broader profession.”

Among the firm’s diversity, equity and inclusion (DEI) programs is Accelerate 2025  – a targeted firmwide initiative to recruit professionals from underrepresented groups to choose KPMG as their employer.

“Putting DEI at the center of our recruiting process is critical for our firm to meet the goals of Accelerate 2025,” Gonzales said, and pointed out that in FY22, 69% of all UTA full-time  hires nationally were  underrepresented talent. “This is the result of several efforts to enhance the diversity of our incoming entry-level hires.”

KPMG is also working closely with various professional groups, including the Center for Audit Quality through initiatives such as the Bold Ambition campaign, to build a robust pipeline of diverse candidates. Firms are providing scholarships and working with high schools, community colleges, universities, HBCUs, HSIs, and Tribal Colleges and Universities to invest in a diverse and sustainable pipeline of talent.

“We know the benefits of a diverse workforce when inclusively led, especially in the professional services business, are immense. Inclusive, diverse teams produce better ideas, increase creativity, and are more productive,” Gonzales said. “In other words, we’re better able to solve our clients’ toughest problems, and that’s at the heart of what we do.”

At CBIZ, its Diversity and Inclusion Task Force is addressing diversity at the firm through recruitment, retention and education/awareness initiatives.

“To fully address an issue, you must first understand it,” Sublett said. “We have engaged in creating awareness across all levels of the organization with a specific focus on those in the hiring manager realm. Focusing on unconscious, and unintentional and hidden biases in the hiring process through a three-part training program is one example.”

CBIZ also offers all employees access to DEI learning opportunities, including a speaker series that invites prominent diverse voices from outside the organization to speak on diversity issues.

Sublett said CBIZ has also been “more intentional” in where the company looks for “candidates to increase the diverse talent pool.”

“We have trained our experienced hire and campus recruiters in diversity topics, bias in hiring and completely revamped our career website to highlight not only our commitment to diversity but how hires are able to feel welcomed and encouraged to become a part of the solutions in increasing  diverse representation,” he said.

To retain its diverse hires, CBIZ has expanded its staff-led Employee Resource Groups, including CBIZ Women’s Advantage,  focusing on issues important to women in the workplace; and  CBIZ Young Professionals  focusing on mentoring early career talent.

“In December, we launched two new ERGs focusing on our  LGBTQ+  employees and our  BIPOC  employees,” Sublett added.

CBIZ is also nominating and sending employees to the We’re About Success Program – an AICPA program launched in 2021 in partnership with the Howard University Center for Accounting Education that gives ethnic minorities early in their accounting careers resources to succeed and advance to leadership positions.

Advancing diversity in accounting is not only happening at large national firms like CBIZ, Deloitte and KPMG. Smaller local firms are also doing what they can to increase diversity in the profession when and where they can.

Jennifer Barnes
CEO
Optima Office, Inc.

“At Optima we pride ourselves on being diverse. We really don’t care what someone looks like or what ethnicity they are. We care about them being good communicators, smart in general, kind, caring and flexible,” said Optima Office, Inc. CEO Jennifer Barnes.

Barnes added that 25% of Optima’s staff is ethnically diverse and while the company has not set any specific goals for diversity hires, it hires “the best candidates for the role, regardless of ethnicity.”

“We have people of all shapes, sizes and colors here at the company and welcome diversity,” she said.

Obstacles To Overcome

Even with a concerted effort and well-funded programs to diversify accounting, there are still obstacles to overcome in reaching equitable representation in the profession.

“A major obstacle to increasing diversity in accounting is a systemic one. The lack of diversity decreases the ability of firms to recruit and retain diverse individuals,” Machado said. “Further, many URM accountants see a lack of equity and inclusion in the accounting field, leading to many leaving the profession.

The lack of diversity in faculty teaching accounting at colleges and universities is another obstacle.

“Studies show that faculty diversity can have a major impact on the retention and graduation rates of URM students,” Machado said. “However, given that that pipeline into the accounting profession is already limited in terms of diversity, increasing the number of diverse faculty is even more challenging.”

Organizations like the PhD Project have helped solve this challenge by growing the number of historically underrepresented business professors in the U.S. – from 294 in 1994 to now over 1,600,” Ruschak said. There are also nearly 300 diverse doctoral students currently enrolled in doctoral programs.

Ruschak also pointed out that the PhD Project doctoral program completion rate is 90%, compared to the national average completion rate of 70%. Also, the retention rate of PhD Project professors/faculty members is  97%, significantly outperforming the national average retention rate of 60% for all other professors/faculty.

“The PhD Project inspires successful people in business to leave their corporate jobs to earn a Ph.D. They become a professor in the classroom, one that acts as a role model to students. Over nearly three decades now, our members are not just professors; we have department chairs, deans, provosts and now even university presidents,” he said. “These leaders can now impact universities and help them with their diversity efforts, literally helping to change the landscape of their schools and, ultimately, the business world.”

In addition to systemic obstacles to more diversity in accounting, the profession is also impeded by lack of awareness about the career opportunities in it.

“Accounting is more than just creating balance sheets and taxes; it’s also IT risk assessments, business consulting, ESG assurance, and other areas,” Wyne said. “Many don’t realize the breadth of opportunities within accounting. Educating and showcasing accounting as not only a viable but rewarding profession that needs people with different talents and backgrounds is a challenge for the profession.”

Anne Bridenstine
Tax Managing Director & DEI Champion
Deloitte, San Diego

Deloitte San Diego DEI Champion and Tax Managing Director Anne Bridenstine said the firm is going to “turn challenges into actions” with Deloitte Academy: Accounting Editions – a program which “aims to bring accounting to life for racially and ethnically diverse high school students and drive greater interest in and awareness of careers in accounting.”

The academy program will launch this spring in collaboration with San Diego’s Junior Achievement chapter. The efforts are part of Deloitte’s multi-year MADE commitment to generate greater racial and ethnic diversity in accounting.

“With action, passion, and time we hope to see diversity continue to grow in our local office and throughout the profession. At the heart of DEI is being human and the more we share our personal stories, cultures, or family heritage the more we connect as humans,” Bridenstine said, adding that over the past year the San Diego Deloitte office held over a dozen events to create connections amongst its diversity communities.

“We have made significant strides in helping to advance gender and ethnic diversity. However, we acknowledge there is still more work to be done – specifically, to support the advancement of woman to the partner, principal and managing director level, and to attract a more racially and ethnically diverse talent pool to the accounting profession,” she added.

Awareness of accounting isn’t the only awareness obstacle to diversifying the profession. Awareness and acceptance of DEI initiatives also continues to be an issue.

“Not everyone is a champion for diversity. While more than 95% of respondents across all demographics agree they have something to learn from people who are different from them, only 66% think that companies make better decisions when there is employee diversity across race, ethnicity, and gender lines,” said Sublett, citing data from the annual DEI study from Arizent, parent company of Accounting Today.

According to the study, white male employees are least likely to agree with this sentiment (30%) and least likely to say DEI is important (32%), but most likely to say their company has a genuine commitment to inclusion (47%).

“Nationally nearly half of all employees surveyed have a positive reaction to DEI, but for others, concerns exist that the issue is overblown, that it’s outweighing a merit-based approach to hiring and promoting, and that it’s a performative fad,” Sublett said. “Sentiment about DEI is particularly negative in the accounting and wealth management industries, where only one-third of respondents had positive things to say about these efforts.”

Despite the findings of resistance to DEI initiatives in accounting, Sublett is still positive about where the industry as a whole is heading, even if it is not getting there overnight.

“We like to say this is a marathon and not a sprint,” he said. “While many of the quantitative measurements are not yet something we can look at and say ‘needle moved,’ the qualitative response through engagement surveys, enthusiasm and the fact that we are simply doing things now we have never done in the past, and as the industry as a whole continues to pay more attention to this, we anticipate we will start to see a more diverse industry at all levels.”

 

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