American Institute of CPAs president and CEO Barry Melancon discussed the need for greater diversity at CPA firms as efforts at greater inclusion seem to be running into some headwinds.
In a speech Monday at the AICPA’s Spring Meeting of Council, Melancon talked about the slowly changing demographics of the accounting profession, in part because of competition from other professions.
“There are huge challenges that are playing out in the war for talent,” he said. “We’re in a competitive landscape against other professions.”
Melancon noted that the AICPA needs to find new ways to motivate future generations and develop their skills. “We know that plays out in the human capital element as it relates to culture, workload and the environment that they find themselves in,” said Melancon. “We are very concerned, for instance, about the turnover rates in the profession today. I know some of you are saying we’ve always had turnover rates in the profession. It’s been a pretty common issue, particularly with the larger firms. That is true, but today we’re seeing signs where the stickiness with the profession—when turnover starts to occur—doesn’t feel the same. We’re also seeing some demographic challenges.”
He pointed to a troubling statistic in the number of women coming into the profession, compared to those who are leaving it. “For about 25 years, the number of women entering the profession has exceeded net,” he said. “For the last two years, the number of women entering the profession has actually been less than that. Now, is that good, bad, indifferent? Is it a blip? Is it a trend? All of those things are important to work out from that standpoint. We also have some concerns with the number of people moving into taking the CPA Exam, despite the record numbers.”
Melancon noted that this is the 10th year of the computerized CPA Exam and 2 million sections have now been given in partnership with Prometric and the National Association of State Boards of Accountancy. The AICPA is developing a continuous practice analysis tool to ensure the CPA Exam continues to evolve and meet the needs of the profession. The Institute is also redesigning the exam to make sure the interface stays current. The new content and structure of the CPA Exam will be announced in 2016 and will be rolled out in January 2017.
In addition, Melancon said the AICPA’s Diversity Commission will be releasing shortly an Accounting Inclusion Maturity Model, a framework that the top 500 accounting firms can use to evaluate how well they are doing from an inclusion perspective and benchmark themselves against their peers. “Some of the numbers for minorities majoring in accounting are actually on an uptick,” he said. “That’s a positive thing. But the fact is, if we had the same retention rate in the black community as we do in the white community, we would not have an underrepresented fact pattern in the CPA profession. Retention is an issue, so we’re trying to get some tools for firms to look at inclusion, which helps to drive retention.”
Melancon added that the AICPA is also mindful of the pipeline of people who are coming into the accounting profession. “While I have said there are some signs of uptick in that area, there is more that we need to do from that standpoint,” he said. “In the budget, we are making continuing investments in that area, the first phase of a multifaceted plan that really came about from some work that Frank Ross was doing at Howard University. We are embedding a lot of those things into a plan to try to drive additional awareness and additional minority pipeline into the system. We look forward to success into the future as we plant more seeds in that particular area.”
He noted that the AICPA has also lobbied Congress to allow more immigration of accountants to the U.S. by allowing accountants to qualify for the mathematics category under a proposed expansion of the STEM (science, technology, engineering and mathematics) areas of the H-1B visa program for skilled foreign workers. While that was successful in the version of the legislation that passed the Senate, Melancon acknowledged that immigration legislation has stalled for now in Congress.