A recent statement by the AICPA, verbalizing its commitment to creating equal opportunities for the black community in the accounting profession, was both heartfelt and compassionate. Yet, while it is beautiful and worthy of framing on a wall, the question that must be asked is this: Has the AICPA (and other leaders in the profession) done enough to truly create opportunities for black accountants to have equitable opportunities? The statement in question was as follows:
As a global professional organization, with members of a profession committed to the public interest, we must demonstrate a deep commitment to true diversity and inclusion. The most pressing societal issue we must address is the systemic, structural racism that has caused such anguish and frustration in the Black community. We are encouraged to see many people of all colors speaking up and protesting injustice. We acknowledge the impact of racial oppression on communities around the world and are deeply concerned to see many peaceful protests overshadowed by violence. As leaders, we recognize that we must advocate against racism and act to build a more equitable society. We offer our support and compassion to our Black and African American colleagues, friends, and business partners and to each other. – American Institute of Certified Public Accountants (AICPA), Commitment to Equity, March 26, 2021.
It should be noted that equitable opportunities do not guarantee equitable outcomes. In fact, a recent article published in Bloomberg, CPA Exam Makeover Risks Raising Hurdles for Black Accountants, highlighted the challenges the accounting profession has had in increasing the number of black CPAs in the industry. Currently, per the National Association of Black Accountants (NABA), they estimate that less than 1 percent of accountants in the United States are black.
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The most recent AICPA Trends Report noted that 2 percent of CPAs in accounting firms are black and of partners in accounting firms, 1 percent of partners are black. Considering that the black or African American population, per the latest US Census is 13.4 percent, on the face of it, that would be considered awful and unacceptable. However, the AICPA, state CPA societies and the profession at large has come a long way considering that through the 1960s, states implemented strong discriminatory practices to keep blacks from receiving CPA licenses, to the point that at one time, we had less than 200 black CPAs in the United States.
So, while we’ve progressed past the discriminatory practices at the state level, now we are seeing financial commitments from organizations like the AICPA providing grants to the National Society of Black Certified Accountants or PricewaterhouseCoopers (PWC) committing $125 million to ensuring that 1/3 of new hires will be Black or Latino, there is still a long way to go. In fact, in the aforementioned Bloomberg article, one item that is a concern is that the revised CPA exam requiring an extra 150 hours to obtain licensure has been seen as unfairly discriminatory towards minority candidates, particularly blacks.
In my professional opinion, and in what I’m about to share below regarding the make-up of blacks in the medical and legal professions, should dismiss that as a hurdle for blacks pursuing the CPA profession.
The most recent statistics, per the Journal of General Internal Medicine says that 5.4 percent of our doctors are black in the United States, which at the rate is nearly five times as many as there are accountants. In addition, The American Bar Association reported in 2020 that 5 percent of attorneys in the United States are black, a number that has remained flat for over the past decade.
While the medical and legal professions have their own diversity challenges, it’s clear that there are significantly more blacks in those fields when compared to the accounting profession and in my opinion, the following reasons could indicate why.
There have been positive examples of blacks succeeding as doctors and lawyers, whether it’s in entertainment or in the media. Think of Grey’s Anatomy, House, Johnnie Cochran or Ben Crump as examples. When juxtaposed to the accounting profession, can you honestly think of a movie or program where a CPA was portrayed by a black actor? (I know Ben Affleck had a decent tan in The Accountant, but I digress). Moreover, how often are black CPAs interviewed as experts when speaking of tax laws or even marketed by the AICPA or a state society?
The lack of examples that can be seen or even quantified is a major concern. Currently, it’s estimated that 31 out of 50 states in our country are not tracking the ethnic makeup of their licensed CPAs. In addition, there is not any readily available data to show how many accounting firms are majority-owned by blacks or other ethnic minority groups in this country reported in the AICPA Trends report. This, to me, can be interpreted as that there are hardly any minorities that are truly succeeding, and the profession is too ashamed to admit it.
Furthermore, while there is a noteworthy increase in funding towards solving the problem with increased hiring, we should also emphasize to blacks or other minority groups that not only can you get a license and get hired, but you can advance and/or own your own practice. Here is some data to consider:
With the compelling data, it’s time for the accounting profession to include in their diversity efforts that entrepreneurship through the accounting profession as a possible path, one that can unlock the entrepreneur’s true skills, but obtain mental, emotional, and financial freedom.
So how can we get there? Here are a couple of ideas that I’m proposing:
The AICPA and state societies should consider expanding their marketing efforts towards minority professionals, to do more advertising and messaging that can be attractive on social media platforms like Facebook, Instagram, TikTok, Twitter, etc. They also need to identify some younger, black CPAs that are also entrepreneurs that come from unique walks of life as blacks are not a monolithic group.
In addition to the financial commitments made by the AICPA and large accounting firms to hire more blacks to become CPAs and employees, we should have funding made available for minorities to get seed money to start their own firms. These funds should be in the forms of low-interest loans provided by the AICPA and/or accounting firms for a period of 10-15 years where they not only are loaning the money, but providing coaching, training and get a piece of the profits, so that they are truly partners in this venture.
Currently there are approximately 138,000 CPA firms in the United States, but the demand for accounting and tax services is still high and we know the large firms can only serve a small sector of the economy. If these loans are not paid in full after 10-15 years, you can have the lender become an employee of the firm making the loan and have them work off the debt through their salary.
To have true equity where there are equal opportunities, with the possibilities of having equal outcomes, in my opinion, not only do we have to make efforts to hire more black CPAs but there also has to be more black and minority-owned firms. Otherwise, if the best we can do is offer someone the opportunity to build for others and that’s not true equity.
When you have something of your own, you have dignity. But whenever you are begging for a chance to participate in or use that which belongs to someone else on an equal basis with the owner, that’s not dignity, that’s ignorance. I’ll leave you all with this…
“The only way the two can have equal job opportunities is if black people have factories as well as white people have. And then we can employ whites, or we can employ blacks, just like they can employ whites, or they can employ blacks.” – Malcom X, in an interview with Eleanor Fischer, 1961.
This content was originally published here.