In 2014, it has become clear that the accounting profession is not as diverse as it needs to be. While the problem isn't exclusive to the field, the under-representation of minorities has become quite apparent among all levels of the industry, especially the top brass.
According to the Howard University Center for Accounting Education study "Attracting Underrepresented Minorities to the Accounting Profession: Insights Into Diversifying the Talent Pipeline" released this past April (authored by Frank Ross, Allyson Clarke and Jean Wells), only 4 percent of all partnerships in the profession are held by African-Americans and Hispanics - combined. Those of Asian/Pacific descent didn't fare much better, only comprising 5 percent of partnerships.
These numbers stand out in a nation where almost 90 percent of partnerships in the profession, according to American Institute of CPAs data, are held by whites, and where more than half the population will soon be comprised of minorities. Furthermore, according to the Howard University report, the number of minority-owned businesses "increased by 45.6 percent to 5.8 million between 2002 and 2007, more than twice the national rate of all U.S. businesses."
So how does the profession best address the issue of diversity? The answer lies in making a concentrated effort to reflect the current general population in the profession in order to best prepare for the future. "Organizations that prepare themselves for the attraction, retention and development of all talent pools have an immediate and ongoing competitive advantage," the Howard University report promised. "In professional services firms, the talent of our people is our No. 1 asset. It defines the quality of our service offerings and our ability to fuel our growth. We cannot continue sustainable growth without a strategy to increase our attractiveness to larger talent pools."
PART OF THE VOCABULARY
Kim Drumgo, director of diversity and inclusion at the AICPA, as well as the vice chair of the National Commission on Diversity and Inclusion, echoed the need for a diverse talent pool moving forward.
"We recognize [that] we're faced with significant demographic shifts, and that means our work force and clients will look different 10 years from now," she said. "We believe the profession is strongest when we recruit from as wide a base as possible. We want to make sure the profession can serve a diverse audience and create environments that are accepting of different cultures."
In response to these concerns, the Howard University School of Business Center for Accounting Education teamed with the institute this August to create the Pipeline Working Group, a multi-step program under the Pipeline Project that looks to develop unified, nationwide initiatives, from national marketing strategies to promoting diversity and awareness of the field to students, educators and parents.
The first, and perhaps most crucial, part of the Pipeline lies in gaining more exposure for the accounting profession in pre-collegiate education. The AICPA points out that many high school students (as well as educators, guidance counselors, and parents) do not have a good grasp on the real ins and outs of the profession, as many high school courses "provide students with a very narrow picture of accounting, often emphasizing bookkeeping," according to the Howard University report. A more diverse audience may prove difficult to attract, then, when it is not portrayed as an attractive option overall.
"We want to make sure it's part of the vocabulary for careers," said Drumgo. "For students who didn't grow up around accountants, it's not seen [as an option]."
The numbers don't lie: According to institute data in the Howard University study, the percentage of African-Americans enrolled in bachelor's degree accounting programs has been declining steadily over the past decade, from about 11 percent in 2001-02 to 7.2 percent in 2011-12, while in 2011-2012, only 8.4 percent of accounting students were Hispanic. Alternatively, the number of Asian/Pacific accounting students, although below peak levels, rose significantly from 6.3 percent in 2009-10 to 9 percent in 2011-12.
Drumgo added that the law and medical professions also face similar dilemmas in attracting diverse students, but unlike those career paths, accounting doesn't benefit from much free advertising. "It doesn't have its own TV shows," she laughed.
To counter this lack of representation, the Pipeline Project will focus on engaging students with school-based programs that best introduce CPA professionals and their work. Numerous professional associations, including the National Association of Black Accountants and the Association of Latino Professionals in Finance and Accounting, as well as individual firms, have started their own exposure and support initiatives in high schools. Additional tools, such as virtual field trips via the AICPA's accounting student resource Start Here, Go Places, allow students to interact with professionals right from the classroom.
"The goal [of these initiatives] is real-time access to professionals when students can't go to the CPAs," said Drumgo. "It's important we have those role models in place - physically or virtually."
Frank Ross, one of the authors of the Howard University study, as well as a recent recipient of the AICPA 2014 Gold Medal Award for Distinguished Service for his long career as one of the first African-American partners of an international firm, summed up the situation in "A Pipeline for Diversity," an August article for The Journal of Accountancy: "The need to expand recruitment efforts, boost public appreciation of the profession's value, improve accounting curricula, and reach out to high school and college students and those who provide them with guidance are challenges the profession faces," said Ross. "The Pipeline Project can strengthen the profession and enhance client service by creating more diverse teams and wide-ranging perspectives that reflect the world the accounting profession serves."
Outside the classroom, the profession has also made major strides for firms to assess where they stand on the issue of diversity. This October, at the AICPA's Fall Meeting of Council in Boston, institute president and CEO Barry Melancon announced two new online tools for promoting diversity within the profession: the Accounting Inclusion Maturity Model and the Recruitment and Retention Toolkit.
"As demographics continue to shift in the U.S. and the share of entrepreneurial capital held by minority-owned businesses rises, it is increasingly obvious that clients and employers of CPAs will expect more diverse workforces," Melancon said at the meeting. "Cultivating a culture that fosters diversity and inclusion is a business imperative."
The Accounting Inclusion Maturity Model lets firms evaluate their diversity and inclusion efforts through an online assessment, consisting of more than 100 questions across four main areas of business: workforce, workplace, marketplace, and community/supplier relations. In order to get a full picture, multiple teams within each firm, including human resources, marketing, and finance, are encouraged to participate.
The Recruitment Toolkit provides a framework for the process of making diversity and inclusion an ongoing component of a company's culture, while also fulfilling their goals for recruitment and retention. The toolkit also contains an action plan template that provides examples to assist in implementing changes. The Recruitment and Retention Toolkit was designed to supplement the feedback a firm receives from the Accounting Inclusion Maturity Model. (For more, see page 56.)
With these initiatives and tools in hand, firms can begin to make a significant impact on diversity - by starting at home.
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