CPA Donny Shimamoto was looking at a presentation promoting a major accounting organization's new campaign to diversify the accounting pipeline when he noticed something concerning: There were no Asian professionals represented in the slides. And when he pointed it out, a representative of the organization told him they didn't want to "dilute" the campaign.
The pursuit of diversity has been difficult for accounting; the profession has been devoting time, resources and good intentions to it for decades, and yet in many areas it has made no progress. In late 2021, the American Accounting Association released a study, "Auditing While Black: Revealing Microaggressions Faced by Black Professionals in Public Accounting," that revealed that only 7% of Black people in accounting felt like they were treated the same way as their non-Black colleagues.
Across the broader economy, numerous companies and nonprofits have started investing in diversity, equity and inclusion initiatives to address this emerging issue. A PwC survey indicated that 75% of organizations globally have identified DEI as a priority, and 80% increased their DEI budget in 2022. And yet, business directory ClearlyRated still found that only 53% of organizations took direct action toward DEI programs, and the number falls to 40% for companies with fewer than 100 employees.
How can we explain the discrepancy between the profession's efforts and the stagnating number of CPAs of color — or the low numbers of women in leadership roles at firms — or the high turnover rate for LGBTQ+ professionals? According to Shimamoto, it's because diversity is not always understood in all its complexity, which results in marginalized groups often being excluded from initiatives that are meant to help them.
"What concerns me is that Asians are not being included in racial minorities," said Shimamoto. "We're sometimes included in the analysis, but we're not included much in the policies. That just kind of struck me because this is DEI and if you're not inclusive, then aren't you being just as bad as what we're trying to fight?"
From talking to experts at firms and accounting organizations, it's clear that one of the reasons the accounting profession isn't achieving its DEI objectives is a failure to understand the complexity that Shimamoto is talking about — and that a broader understanding of the many faces of diversity, and a commitment to addressing those nuances, could create a path to a more inclusive future.
(See the results of a groundbreaking study of diversity in the profession in "
Missing pieces
When it comes to diversity, Shimamoto says there's a discrepancy between exposure and application, because many firms believe themselves to be too small to be diverse, but he sees DEI extending beyond ethnicity or gender. Someone from a lower economic background may think about money differently than someone from a higher class, and Shimamoto defines that as diversity of thought, which he sees as the real driver for innovation.
"I think right now the biggest piece that's actually missing is being talked about and applied in middle management," said Shimamoto. "The top-level people are talking about it, but a lot of it is lip service. I think the younger generation already embraces it, and I think we just need to wait until they can come and apply those new concepts."
Crystal Cooke, the director of diversity and inclusion at the American Institute of CPAs and the Chartered Institute of Management Accountants, agrees that power lies with leadership, noting that DEI programs sometimes fall short because upper management doesn't show up to meetings or doesn't provide the financial resources people need to keep things moving, despite their apparent support. Cooke says that when employees leave, it's "always" because of their managers, which is why she thinks a lot of efforts should be focused on DEI training to improve their day-to-day experience.
The Center for Accounting Transformation, which Shimamoto launched last summer, offers midsized firms a framework that remodels their business processes, work culture and digital tools. Currently, the organization is leading a diversity survey to identify how accounting professionals accelerate their organization's DEI efforts. The research looks at whether people recognized other forms of diversity, such as disabilities or sexual orientation, and Shimamoto realized there was a general lack of awareness that these categories even existed.
Cooke made the point that breaking down demographics is a good way to see if DEI efforts are equitable across the entire diversity spectrum. For example, she observed a lot of growth for female professionals in the AICPA's benchmark "Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits" report, but nothing comparable for the Black community. Cooke said that such homogeneity can take a real toll on employees' mental health and make accountants of color feel like outsiders, especially if they don't feel heard by their superiors.
Shimamoto believes that firms should consider those nuances when creating policies, hiring people, and managing teams. For now, he feels like everyone benefits from the "hype" of diversity without offering much tangible action, but he said it won't last forever. He thinks that diversity will soon become normalized among firms, and that's why his center will continue to point people to the right resources and accelerate their ability to make a change.
"A different approach is to better utilize the resources that the profession has, identify what's already out there, and stop duplicating efforts," said Shimamoto. "What's actually missing? And among those things, what is truly needed? What resources are there? If they're already there, then you want to appoint qualified people to get the best information and stop using a Google search while hoping for the best."
Outcomes, not programs
According to Shannon Schuyler, the chief purpose and inclusion officer at Big Four Firm PwC, firms need to stop looking at diversity as a journey, but rather to view it through their people. She believes that appreciating the humanity in people's voices and understanding what they do on a day-to-day basis is critical to driving diversity.
That's not to say that there isn't a need for programs and measurable results. As revealed in the firm's 2022 Purpose and Inclusion report, PwC made a commitment to achieve a 50% increase in employees of color and to award 40% of its reportable spend to certified diverse suppliers by 2026. And its new associates of color have the option to go through a two-year onboarding process, which ensures they have all the necessary tools to succeed and don't have to create a network on their own.
Support networks are a major component of forward-thinking firms' DEI efforts. At Top 25 Firm Crowe, for instance, chief people officer Katie Hamada believes that business and employee resource groups are critical to underline the importance of allyship and allow employees to share their interests with people from similar backgrounds.
But inevitably people will have to work with colleagues from dissimilar backgrounds, so PwC also trains coaches to work with different leadership and communication styles, and staff are encouraged to work with people who are different from them. It doesn't only support employees' professional growth, but also provides valuable insight that can help firms enrich their clients and job applicants' experiences. For the first time in years, Schuyler is inspired by what accounting firms have done to expand their DEI efforts beyond their walls to influence policies and promote educational equity.
"We focus on policies and how we collectively look at policies in higher education to get the system changed for students to actually have a chance to be more successful," she said. "We're digging in and we're not afraid of what our numbers say because we're ready to push further. And this value isn't in programs, but the stability of the organization and our core culture."
PwC no longer looks at DEI as a program, but as an influence on how systems should be operated and decisions made. According to Schuyler, diversity should be a "core fabric" of the company without pushing DEI on one side and people on the other. It should be a source of inspiration for new hiring and performance processes devoid of biases, and choosing providers whose job responsibilities include a focus on diversity.
The Big Four firm is focused on collecting feedback and sending real-time diversity data from more than 4,000 partners for them to share with their engagement teams. Schuyler says that if everyone works together to uncover where there's a lack of parity and increase engagement at all levels, it will become possible to change the fabric of the industry, and not only of one firm. Throughout her 25-year career at the firm, Schuyler has witnessed a growing interest in DEI and sustainability, with a 5,000-people increase in PwC's inclusion networks this year, which now count over 20,000 employees.
"Firms need to thoroughly track representation as well as hiring and promotion outcomes," said Crowe's Hamada. "Compiling this information is essential in assessing the impact of DEI efforts, so that organizations can take action if the outcomes aren't aligned with inputs, and deepen their understanding of systemic barriers."
PwC's Schuyler believes diversity is about creating a place where all employees can gain experience equally. For employees, it's about having a place where they can be respected for the differences they bring. For clients, Schuyler observed that many believe inclusion drives business and they want an accounting firm that brings a depth of experience and a wide panel of perspectives.
"We don't only work for people who are here, but also those who are years away from coming here full-time," assured Schuyler. "That's why we talk to people who don't want to join the industry and it very often revolves around the CPA license's 150 credit hours requirement, because it's undermining people who can't afford that last year."
Inclusion, not assimilation
Despite representing over 13% of the population, Black people only represent 2% of the CPA workforce, and less than 1% of partners. That's why the National Association for Black Accountants has been striving for better representation, and has launched several programs to support underrepresented communities. According to CEO and president Guylaine Saint Juste, it's to ensure that everyone can be part of the conversation and achieve racial equality as business associates, not affinity partners.
The mainstream definition of "cultural fit" is promoting a uniform work environment, which means bringing people who exhibit core values and competencies deemed necessary to succeed in the firm. However, Saint Juste thinks that this concept comes with the risk of encouraging assimilation rather than inclusion, which would prevent employees from learning about the Black experience. She believes that legislation such as California's 2019 Crown Act, which protects Black women's right to wear their natural hair, reflects a painful side of the lives of people of color that many executives are not willing to discuss in the workplace. However, Saint Juste says that such major issues can't be left at home.
"Diversity is to be invited to the dance, and we know that firms are doing that very well, while inclusion is being invited to dance," said Saint Juste. "People say that the U.S. is a melting pot, but I don't want to be melted in anybody's pot! I'm happy to be a potato, and somebody else can be a carrot, but I also want people to dance to my music."
Diversity has advanced slowly over the past 40 years: The number of Black accountants has only increased by 1.4% since 1980. Saint Juste believes that diversifying the pipeline should start with offering alternative pathways to enter the profession, because the 150 credit hours required for CPA licensure are a significant barrier for underrepresented communities who can't afford the loss of earnings required to get a master's degree.
According to an AICPA study, only 44% of students have taken an accounting class by the time they go to college, and Cooke believes the profession loses a lot of talent due to a lack of early exposure. She says there is a need for professors who are passionate enough to inspire students to become accountants, and it could start with diversifying faculty as well. Because many in the younger generations no longer want to work for companies that don't value DEI concepts, Cooke believes that firms should make inclusion a priority, as growing the profession cannot happen if the talent pipeline keeps shrinking.
"There are now four generations in the workforce today, so we are at an advantage because we can develop DEI initiatives based on feedback from experienced personnel and fresh insights from those just beginning their careers," said Sheila Enriquez, chief DEI officer for Crowe. "Remote work also provides us with the opportunity to reach talent from across the country, and even the world, so we have access to a broader and more diverse talent pool."
According to NABA research, 81% of community college students expressed interest in accounting during their freshman year, only for that number to fall near zero by the time they graduate. Saint Juste thinks responsibility lies with the lack of interactivity that comes with online classes, but also from economic hardships that take students' attention away from their studies. She believes there could be an increase in student engagement if they were provided with more career growth opportunities.
Enriquez noted that numerous accounting programs and scholarships are available to minorities, but many actually don't know about them. For her, it shows the necessity of starting to engage with students and to promote these opportunities much earlier in their academic journey.
"Accounting is the language of wealth, business and money, and we need to help the next generation see that it's a valuable pathway," said Saint Juste. "The path to CEO and CFO clearly requires knowledge of accounting, and when I think about it, I would love a broadening of the spectrum. Accounting is a thriving, vibrant field of study, and I would love to see firms rally behind that."
The confirmation hearings of Justice Ketanji Brown Jackson and the "shameful" questions asked by some Republicans congressmen left a mark on the Black community, as many Black professionals related to the feeling of helplessness, and Saint Juste believes that no firm executive inquired how their female employees of color were doing because the topic became politicized, and because many still think they are doing enough. She says there's a fear of confronting people with poor behavior, and that Black employees need a safe space to discuss firms' pyramidal structures.
Saint Juste says that people don't want to take complaints and concerns to human resources because they feel HR is more invested in protecting the firm's image than defending their interests. She adds that when she was employed, she suffered from retaliation for bringing up issues to upper management, and it was made clear that she would never get promoted again. According to Saint Juste, driving change comes with tackling unconscious biases and microaggressions, and it all starts with better representation.
"There's something very powerful in building Black institutions that are sustainable and operate well because they have the right talent and support," explained Saint Juste. "I don't know how you can serve customers if you don't understand who they are, where they're from, and I don't believe it's about doing a nice social experiment. It's about the viability of the U.S. economy, and with everything happening around us, cooperation is essential to lead peaceful lives and achieve sustainability."
Investments in the right places
Big Four firm Deloitte recently released its yearly DEI Transparency Report, which laid out the firm's equity plan for the next three years. With 35% of U.S. newly promoted and admitted partners being of color and 41% identifying as female, Deloitte reported the most diverse partner, principal and managing director class in its history. In its total workforce, the firm observed a 43.8% increase in the number of Black and Hispanic employees since 2020 and it aims at reaching a 50% increase by 2025.
According to partner Thalia Smith, simply hiring people of color is not enough to diversify the pipeline in the long term. For Deloitte, it's about recruiting in places that count a high proportion of multicultural talent and retaining them with programs that focus on career sponsorship. After the murder of George Floyd in 2020, the firm created the Black Action Council and invested $75 million to implement DEI initiatives the following year.
"We celebrate our people by not how well they fit into the culture, but everything they bring," said Smith. "We recognize that it's important to celebrate all types of identities, and we want all our professionals to be seen and heard. We're committed to systemic change and it's an imperative not only for our people but our clients as well, because they indicated it's important for them."
Smith said that Deloitte values intentionality and has spent most of its efforts trying to understand what it is trying to solve. With employees of color representing less than 5% of CPAs, Smith explains that it's difficult for minorities to see themselves in that role when they have close to no representation. As a result, the firm invested $45 million in scholarships, with $5 million going toward historically Black colleges and Hispanic-serving institutions. A portion of that $5 million went toward undergraduates, and Deloitte has significantly increased its internship pipeline to expose students to accounting careers before their junior year. The firm employed around 850 freshmen and sophomore interns this summer, and last year, Deloitte reached 8,000 students. Smith believes that professionals need to engage with young people, especially from high schools and community colleges, because that's how they'll have hope for their future.
"I'm very excited about the number of organizations that committed resources to our goals, but we can always do a little bit more," said Smith. "Deloitte wants to partner with others and further this commitment, because that's what is going to move the needle in the Big Four, universities, nonprofit organizations, etc. We want to bring minds together with different resources to increase representation and promote equity at all levels."
The number of female accountants grew by 35% between 1970 and 2022, which is a significantly stronger progression than what's observed for professionals of color. According to Smith, it is because the ethnic diversity rate was so low in workplaces and university programs that no one paid close attention to the matter until a few years ago, when diversity finally started shifting beyond gender. For now, she observed that more people were interested in accounting, and the challenge lies with helping students finish their degrees or pass their freshman courses.
From the youngest of potential accountants to the oldest of mentors, and across the spectra of race, gender, class, orientation and a host of other dimensions, diversity is a far more complex subject than accounting may have expected. That may be why it's been difficult to move the needle in so many ways — and why it's crucial that everyone in the profession get involved.
"Everyone has a role in making the workplace more diverse, inclusive and equitable," said the AICPA's Cooke. "However, leadership has to empower everyone below them, lead by example, put these things in action, and make them a priority. They need to show how important it is to the organization, and that's the push that we need."
