The accounting industry has made strides in diversity, but more work remains

We need more women and people of color in the accounting industry. So, are we doing enough to make that happen?

For nearly two years, the chorus has been growing for more inclusivity and increased diverse representation at executive levels in tax departments, the broader C-suites and corporate boardrooms. Around the globe, corporate leaders have spent the better part of that time discussing the importance of diversity, equity, and inclusion, and pledging to commit to aligning hiring, promotion, and retention practices along with these principles. But have our actions lived up to our words? Unfortunately, the jury is still out.

When it comes to accounting, we do see some encouraging signs. For example, according to the AICPA’s latest trends report, 44% of undergraduate students and 42% of accounting graduates are Black, Latino, American Indian or Alaskan Native, Asian or Pacific Islander, multiethnic or other. This reflects a significant boost from 10 years ago, when the numbers were 31% and 30%, respectively.

That enthusiasm is tempered by the fact that total minority hiring by U.S. CPA firms has remained flat since 2012. What’s more, minorities whom CPA firms based in the U.S. currently employ have found that the COVID-19 pandemic has increased their workload at a higher rate than their white peers. For example, according to new Thomson Reuters research, more than half of accountants of color (54%) reported increased work hours during the pandemic compared to 46% of their white peers; and 41% of accountants of color took on more responsibility without pay compared to 30% of mostly white accountants. This is even more pronounced for women, more than half (56%) of whom say the pandemic had at least a slightly negative impact on their wellness, compared to 45% of men who reported the same.

So, while the recent surge in minority enrollment in accounting programs should be considered progress, can that momentum be maintained and converted into new accounting professionals over the coming years? And coupled with the nationwide push to address and eliminate racial and social inequity, will it be enough to change the face of accounting for good finally?

These questions were on my mind when we recently spoke with some of my colleagues who are people of color and have ascended to the industry’s upper echelon. Their words painted a picture of a landscape that still needs strong, foundational changes.

For example, we must acknowledge that many Black professionals are crossing a threshold and breaking generational ground when they graduate college — a norm that engrained inequality has allowed White professionals to establish long ago. Noel Abdur-Rahim, an audit partner at one of the global seven, said that difference can not only shape the career path viewed by young Black men and women as viable but influence their viability as a job candidate, too.

“Black college students might have done everything that they needed to do to interview well or to get the job,” she explained. “But there are certain things that are taught — or that are naturally taught by observation — that some black professionals entering into corporate America just don't know and aren't aware of.”

That matters because a professional culture always has an architect, and it usually reflects the standards, unwritten norms and colloquialism of that founder. And in most institutions — accounting included — the dominant culture has been built through the lens of white men.

Research confirms this sentiment. According to research from McKinsey & Co and Lean In, the current pipeline of women of color shrinks by more than 70% from entry-level (17%) to C-suite (4%), and for men of color by 38%. When there isn’t representation in these jobs and at executive levels, we lose a valuable talent pipeline. Most young professionals view the industry as simply not for them and don’t even consider it an option.

“I find a lot of times what junior professionals look for [in a potential career path is to] see if someone that looks like them can succeed here,” said Sherry Ann Mohan, managing director at a major investment bank.

If we are to realize the goal of having corporate tax departments be more representative of who we are as a community, we need to address these types of systemic shortcomings. Diversity is not just a noble pursuit; it opens the profession to burgeoning talent and can benefit employers by gaining new voices with fresh perspectives.

That doesn’t mean all these changes will happen overnight. Some steps will be large and sweeping, others incremental. But if corporate leaders stay determined to move forward, there can be a meaningful change that creates a better, fuller picture of the industry at large. Accounting seems on the precipice of taking a true step forward in this regard. Now it’s up to all of us to make sure we lead and drive accountability in shifting monumental progress forward.