The accounting industry is undergoing a significant transformation, as firms recognize the importance of creating a more diverse and inclusive workplace. At the same time, clients and customers are increasingly demanding that their service providers reflect the communities they serve and bring a range of perspectives and experiences to the table.
In this blog, we will explore the current state of DEI in accounting firms, examine the challenges and opportunities facing the industry, and highlight examples of best practices and initiatives aimed at promoting diversity, equity, and inclusion.
Diversity in Accounting Firms
As the business world becomes more globalized and interconnected, it is essential for accounting firms to reflect the diversity of their clients and communities. However, the accounting industry continues to face challenges in achieving diversity. According to the American Institute of Certified Public Accountants (AICPA), while the percentage of minority CPAs has increased over the past decade, it still represents only a small percentage of the total number of CPAs.
Furthermore, women continue to be underrepresented in accounting leadership roles. This lack of diversity not only perpetuates systemic inequalities but also limits the industry's potential to drive innovation and problem-solving. For example, according to a survey by the American Institute of Certified Public Accountants (AICPA) women makeup 51.2% of all new accounting graduates, but only 23.7% of all CPA firm partners.
While progress has been made in increasing the number of minority CPAs over the past decade, there is still a significant gap between the percentage of minorities in the U.S. population and the percentage of minorities in the accounting profession. Women also continue to be underrepresented in leadership positions within accounting firms. Addressing these disparities will require ongoing efforts by accounting firms, organizations, and policymakers to promote greater diversity and inclusion in the industry.
How Are Accounting Firms Doing When It Comes to Equity?
Equity in working environments means that every employee has an equal chance to succeed and advance in their career, based on their skills and abilities, rather than their background or identity.
Despite ongoing efforts to promote diversity and inclusion, there are still significant disparities in equity within accounting firms. For example, a recent study by the Institute of Management Accountants found that women in accounting earn only 78 cents for every dollar earned by men, even after controlling for factors such as education and experience. In addition, research by the American Accounting Association has found that racial and ethnic minorities in accounting face significant barriers to advancement, including a lack of mentorship and opportunities for professional development.
To address these disparities, many accounting firms have implemented initiatives to promote equity and inclusion. For example, some firms have implemented policies to ensure equal pay for equal work, while others have established diversity and inclusion committees to develop strategies for recruiting and retaining a more diverse workforce.
Inclusion in Accounting Firms
How are we doing in this matter? A survey by the American Institute of Certified Public Accountants (AICPA) found that only 39% of Black respondents and 42% of Hispanic respondents felt that their firms had a culture of inclusion. Similarly, only 32% of women and 30% of people with disabilities felt that their firms were inclusive.
Many accounting firms have implemented initiatives to promote inclusion and belonging. For example, some firms have established employee resource groups (ERGs) to provide support and networking opportunities for employees from underrepresented backgrounds. Other firms have implemented training and education programs to raise awareness of unconscious bias and promote inclusive communication and collaboration.
In addition, some firms have taken steps to address issues of workplace harassment and discrimination, such as implementing anonymous reporting systems and conducting regular employee surveys to assess the state of inclusion within the organization.
Future Outlook for DEI in Accounting Firms
Not all is lost. One of the key drivers of DEI in accounting firms is changing demographics. As the workforce becomes more diverse, firms are recognizing the need to create a more inclusive workplace that reflects the communities they serve. In addition, clients are increasingly demanding that their service providers have diverse teams that can bring a range of perspectives and experiences to the table.
Looking ahead, the future of DEI in accounting firms will depend on continued efforts to promote diversity and inclusion at all levels of the organization. This includes developing more robust recruitment and retention strategies that target underrepresented groups, as well as implementing training and education programs to promote inclusive workplace culture and behavior.
Additionally, firms will need to continue to prioritize DEI in their client engagements, ensuring that their teams reflect the diversity of their clients and can bring a range of perspectives and experiences to the table.
Kevin Mitchell, CPA
Senior Manager and CPA with over 20 years of experience in accounting and financial services, specializing in risk management and regulatory compliance. Skilled in managing audits and leading teams to deliver exceptional services. Proud father of two.
