Julie Bell Lindsay is CEO of the Center for Audit Quality.
A lot about the college experience has changed since I graduated (which has been longer than I care to admit), including the diversity of the student population. Today’s higher education student population is more representative of our society than it has ever been, with 45% of undergraduate students identifying as people of color in 2016, compared to almost 30% in 1996. By many measurements, however, the accounting profession does not reflect the changing demographics of our country and colleges. While this is not unique to accounting, it is a shared societal challenge for business leaders to address.
Businesses across industries recognize that they are strengthened when they employ individuals with different backgrounds, ideas and experiences. But these businesses also face a tight labor market that is competing for talent.
While investments in diversity, equity and inclusion (DEI) initiatives may have grown, accounting and public company audit firms are not immune from these challenges. Research shows that the number of Black and African American CPAs has remained steadily low over the past decade, while the number of Hispanic and Latino CPAs has only incrementally increased. While graduation trends show increased bachelor’s degree attainment overall for underrepresented demographics, we see continued room for improvement in accounting majors (download required). Approximately 60% of bachelor of accounting degree holders identify as white, according to the Integrated Postsecondary Education Data System, and just 7% identify as Black or African American, and 13% as Hispanic or Latino.
My organization, the Center for Audit Quality (CAQ), researched what Generation-Z is most focused on when it comes to their careers. One of the top priorities for these students is going to work in an environment that shows a commitment to diversity, one that values the perspective and opinions of their colleagues, no matter their background.
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If public company audit firms want to attract the next generation of talent, they can do more by working collectively. Accountants and public company auditors bring reliability and trust to financial reporting, the very foundation of the capital markets that Americans rely on to get a credit card, finance a car or put money into their 401(k). They hold others accountable, and I believe it is imperative to hold them accountable, too. Accounting is a purpose-driven career path with a mission that is committed to moving the needle on DEI with a focus on two specific areas: recruitment and retention.
Focusing On The Next Generation Of Accountants
The CAQ’s research focused on better understanding student perceptions of, and openness to, a career in accounting. The findings were interesting, though perhaps not surprising. While a high percentage of Black and Hispanic and Latino students are open to a major in accounting, we found very few ends up in the major.
There are steps leaders within the public company audit profession can take to close this gap. As accounting acts to diversify its talent pipeline, focus on the following strategies.
• Aim to provide fulfillment and stability. Work with students to highlight the myriad of possibilities available to them in pursuing a career in accounting and auditing—including a path to being a business owner/entrepreneur and giving back to their communities.
• Show the real deal. Focus on giving students a realistic view of what it’s like to be an accountant and auditor. Hopefully, they’ll see the profession meets their personal and professional goals.
• Focus on the whole student. Mentors, classroom and work experiences all were shown to be influential factors in getting students interested in a degree. Creating strategic partnerships can be key here to reaching a more diverse student population.
Maintaining Diverse Talent
Foundationally, DEI means closing gaps within the audit profession. Diverse perspectives coupled with inclusive and equitable cultures can also lead to greater innovation and improved decision making that helps public company auditors better perform their mission to provide the highest quality audits.
Leaders at accounting and public company audit firms can employ the following strategies to recruit top talent to their firms and teams:
• Emphasize transparency. This includes stating DEI goals and sharing data, such as racial representation at all career stages, including the management and board levels. Firms should also share plans on how they plan to measure their progress on stated goals.
• Provide support and resources. This can include internship and mentorship programs, inclusive benefits including student loan paydowns, inclusion networks and other employee resources.
• Work collectively. While many firms have made significant strides in advancing the profession’s DEI agenda, continued progress requires a sustained, collective effort. Leaders at public company accounting and audit firms should continue to engage with stakeholders to understand best DEI practices across the profession and engage their staff to create a culture of inclusivity.
These actions are important, but we cannot stop there. We must continue to be bold in our commitment to closing gaps within accounting and auditing so that those who protect our capital markets reflect the communities that utilize our capital markets. We can make a difference by working collectively and thoughtfully. If you are in the accounting profession, I hope you will join us on this journey toward more inclusivity and equity. And for those already on this journey and working in another field, I look forward to collaborating and learning from your own experiences.