Increasing Diversity in the Accounting Workforce

Howard University’s Study
on Attracting Minorities to Accounting

The Howard University School of Business Center for Accounting Education recently published a study "Attracting Underrepresented Minorities to the Accounting Profession: Insights into Diversifying the Talent Pipeline" that sheds light on the lack of diversity in the accounting profession.

More specifically, the study focuses on the challenges in attracting students to the career:

Despite decades of intensive efforts, the accounting profession has not reached its diversity goals. One reason is the misperceptions about accounting as a career. Studies suggest that young people, including underrepresented minorities, hold the profession in relatively low regard, do not understand what accountants do, and do not appreciate the career opportunities the profession offers.

It turns out that this lack of esteem is widely shared by parents and educators, the two groups with the most influence on young people’s academic and career choices.

Improving the quality of accounting curriculum and expanding internship and scholarship opportunities are essential elements in creating a new, meaningful perception of the accounting profession.

While the accounting profession is expected to grow by 16 percent between 2010 and 2020, applications by African Americans and Hispanics to accounting programs at colleges and universities actually are declining, the Howard study notes.

Additionally, African Americans and Hispanics – who together comprise about 30 percent of the U.S. population – represent just four percent of all partners in the accounting profession, according to data published by the American Associations of CPAs. Caucasians still hold approximately 75 percent of the professional positions in accounting, and 90 percent of the partnerships.

All of this is occurring while the number of minority-owned businesses is projected to skyrocket.

Courtesy, AICPA report 2013 Trends in the Supply of Accounting Graduates and Demand for Public Accounting Recruits; 2012 US Census.

Partnering to Form a Pipeline for Diversity

As a result of the study, the Howard Center for Accounting Education has partnered with the American Institute of CPAs to establish the “Pipeline Working Group” to create a unified, nationwide initiative that reaches out to underrepresented minority students at high schools, community colleges and universities, as well as to their teachers, guidance counselors, and parents—to educate them about the profession.

The notion of working collaboratively to help increase the pipeline of diverse talent into the industry as a whole is a new idea – and one that deserves support—FAF President & CEO Terri Polley
The Working Group’s members include representatives from Deloitte, EY, KPMG, PwC, BDO, the National Association of Black Accountants, the Association of Latino Professionals in Finance and Accounting, the New Jersey Society of CPAs and other organizations.

The Howard study outlines a five-pronged approach to diversifying the talent pipeline, through the development and implementation of:
  1. A national marketing and awareness initiative highlighting the benefits and intellectual rewards of accounting as a profession, aimed at students who are making career choices.
  2. School-based programs intended to promote accounting as a high-value career choice, including business career academies, summer development programs, and other community programs.
  3. Initiatives aimed at helping minority students earn their CPA and other professional certifications.
  4. Internships and career exploration opportunities to provide high school and college students the means to become familiar with the accounting profession.
  5. Programs that both increase the number of accounting scholarships available to minority students and that more widely publicize scholarships that already are available.

Diversity Pipeline Model

Courtesy, The Center for Accounting Education at Howard University

A Call to Action

According to FAF President & CEO Terri Polley, the pipeline initiative represents a call to all in the profession to join a critically important conversation about the future.

The pipeline initiative represents a call to all in the profession to join a critically important conversation about the future.
The FAF has begun to hold conversations with the Center for Accounting Education and the AICPA regarding the role that the FAF, FASB and GASB – and other stakeholders – can play in the development of the diversity pipeline initiatives.

Ensuring the success of the pipeline initiative is in the best interests of all in the accounting profession. Therefore, it is expected that the collaboration and support of firms, state societies, and institutions will determine the success and longevity of the pipeline initiative. Organizations interested in the cause can educate their stakeholders on the key issues facing the profession and invite leaders to share their ideas on how to promote the five initiatives.