A lawyer by trade, when I joined the Center for Audit Quality (CAQ) as the Vice President of Talent and Operations almost five years ago, I understood the similarities and challenges both the legal and accounting professions are facing related to talent and organizational cultures. But what I didn’t expect was that talent, or more specifically, the talent pipeline shortage, would perhaps become the accounting profession’s single-most important issue.
Audit quality is driven by talent quality, and it is no secret that the accounting profession is facing an accountant shortage, which, like many industries, has been exacerbated by external pressures such as the pandemic and the “Great Resignation.” During that time, the CAQ took a hard look at the challenges the profession was experiencing in attracting top talent, and more specifically, underrepresented talent. We knew that the profession had a diversity problem, but until we conducted research to better understand what was driving student perceptions of accounting, we didn’t have the full picture.
What we learned was that the next generation of talent holds many misconceptions about accounting. And for all students of this generation, the lack of representation in the profession is a deterrent to pursuing a career in accounting. What we saw in our own research has been confirmed by numerous studies, that for Generation Z, the most racially and ethnically diverse generation in U.S. history, a diverse workforce may be the most important factor when considering careers.
We knew we had to take action to ensure that the profession would better reflect the communities it served. So, in 2022, we, along with our eight member firms, launched Bold Ambition, a campaign to track our progress on diversity, equity, and inclusion (DEI), within the profession. In this quarterly newsletter, my aim is to share with you key updates, initiatives and other news impacting the future of our profession.
Read on for what I’m tracking in the second half of 2023.
In 2022, the CAQ launched Accounting+, a first-of-its-kind, multi-stakeholder nationwide campaign to attract a new generation of diverse students into the talent pipeline.
In the year and a half since we first launched, this initiative has been highly successful at reaching students:
- 1.1B online engagements with the Accounting+ website
- 4.1M students visited the website
- 32K students provided their email address for information on Accounting+
- 21% measured increase in accounting consideration among students exposed to Accounting+
Here are some program updates covering more recent activity.
The Center for Audit Quality and EVERFI Create Limitless Opportunities in the Accounting Field
The CAQ in 2022 formed another strategic partnership with EVERFI, the nation’s leading social impact education innovator, to reach students in the classroom with accounting curriculum. This summer, the CAQ and EVERFI hosted events at H.D. Woodson STEM High School in Washington, D.C. and at Englewood STEM High School in Chicago, IL, celebrating the launch of Accounting Careers: Limitless Opportunities, an interactive course that covers the extensive benefits accounting skills can provide in business or in daily life, including contexts like entrepreneurship, investing, and personal finance. The course, which has already reached over 40,000 students across 1,800 high schools across the US during the 2022-23 school year, will further expand to 3,000 high schools during the 2023-24 school year. The course also aligns with Jump$tart National Standards in K-12 Personal Finance Education, ASCA National Standards, and Common Career Technical Core standards, and is already receiving excellent feedback, with 69% of students indicating they would be interested in a career in accounting after taking the course. Check out this story on the event in Accounting Today, CAQ and Everfi launch accounting education DEI program.
CAQ Publishes Report on Student Barriers to Pursuing a Career in Accounting, While States Take Fresh Look at 150-Hour Rule Requirements
Amid a shortage of accountants, undergraduate business students report encountering obstacles to pursuing a degree in accounting, according to a recent CAQ report.
Some of the interesting findings from the research include:
- 66% of accounting majors surveyed reported they had decided on their major prior to college, and of all business-related majors, accounting majors were most likely to report they had started college already knowing they wanted to major in accounting.
- The most significant reasons cited by business-related majors for not considering accounting as a major included a lack of interest or passion for the major (driven in part by negative experiences with introductory accounting classes), and their perception of not being good enough at math to become an accountant.
- For those business-related majors that had considered accounting, the greatest obstacles cited were higher starting salaries in other majors and not wanting to pursue the 150 academic credit hours required for CPA licensure. For Black and Hispanic business-related majors, the 150 credit hour requirement was reported as the biggest reason for not choosing accounting.
- The CPA license is highly regarded by both accounting majors and graduates. However, a variety of structural supports are correlated with plans to pursue the license, including encouragement of a professor/mentor and whether a student’s college offered a 150-credit hour program (i.e., an accelerated undergraduate program covering 150 credit hours or a 5-year master’s in accounting program). Black and Hispanic majors and graduates reported less access to such structural supports.
For recent accounting graduates, overall work satisfaction shows room for improvement, with higher income earners, those in public accounting firms (including the Big 4) and those with the CPA license most satisfied, and those not pursuing the CPA license and lower income earners least satisfied. Black recent graduates were significantly less satisfied with organizational culture and shared that mentorship programs to prepare for the CPA exam would be extremely or very helpful.
Download the report, Increasing Diversity in the Accounting Profession Pipeline: Challenges and Opportunities, July 2023, for more of the results.
Meanwhile, states are also taking a crack at addressing the pipeline challenge through a variety of approaches, including the 150-hour rule. Here’s how a few states are considering changing this rule:
- Indiana: Indiana joined the majority of states allowing candidates to sit after 120 hours of study last year, joining 47 other jurisdictions.
- Oklahoma: Oklahoma passed legislation allowing candidates to sit for the CPA exam after 120 hours in mid-April.
- Minnesota: The Minnesota Society of CPAs has introduced a bill into the state legislature that would allow young accountants to become CPAs without having to earn 150 hours of college credit.
- Virginia: The VSCPA board of directors asked a task force of members of the society to make a recommendation to the board regarding whether the VSCPA should change its standing position supporting the 150-hour requirement for licensure.
The CAQ will be monitoring these state-level actions closely.
CAQ Attends Annual NABA Conference
To maximize the impact of all CAQ’s DEI-focused initiatives, we must continue listening to and understanding the perspectives of those most affected – and key to this is our continued collaboration with NABA Inc. The CAQ in 2022 formed a strategic partnership with NABA Inc. dedicated to bridging the opportunity gap for Black professionals in the accounting, finance, and related business professions, to build the accounting pipeline for Historically Black Colleges and Universities (HBCUs).
I recently had the opportunity to attend NABA’s annual conference in New Orleans. Here are the key takeaways from the event:
- DEI must remain a profession-wide commitment and collaboration is key. It takes stakeholders, from audit firms to state societies to professional organizations, to drive change in accounting. Ongoing collaboration and communication will be key to achieving this.
- Progress is being made in reaching underrepresented students. Through Accounting+ and other profession-wide campaigns, we know that more students are being reached with information about accounting than ever before.
- But we must speed up our efforts if we want to remain a viable option for students. While accounting has made great strides in closing the diversity gap, other professions are outpacing us. We must remain hyper-focused on this effort if we hope to compete for the next generation of talent.
The CAQ was also honored to receive the Presidents DEI Leader of the Year award. We’re proud of the work we are doing through our continued partnership with NABA to encourage more Black students to enter the accounting pipeline but, in light of our recent pipeline report, know we have more work to do. We look forward to continuing to share our progress via Bold Ambition.
Supreme Court Overturns Students V. Fair Admissions: My Take
It will take some time to fully understand the impact of the recent Students for Fair Admissions Supreme Court decision striking down affirmative action programs in college admissions and the impact it could have on diversity in the accounting talent pipeline. The CAQ’s research – which confirms countless other studies – shows a diverse and inclusive workforce is a top priority for students considering careers, and attracting top talent is critical to the CAQ’s overall mission in promoting high-quality performance among US public company auditors. It is for these reasons that we must, with the continued support and collaboration of our partners, continue to do all that we can in building a more diverse accounting talent pipeline and workforce that represents the communities in which we live and work.
A cornerstone of this work is Accounting+, which will continue to reach Black, Latino, and Hispanic high school and college students across the country with the message that they belong in the dynamic, exciting world of accounting. As the consequences of the Supreme Court’s decision play out at college admissions offices, courtrooms, and kitchen tables, the CAQ will continue leading the accounting profession to a better, more diverse future.
Each quarter, I’ll spotlight an individual within the accounting profession who is driving diversity within accounting. This month I spoke with Guylaine Saint Juste, President and CEO, NABA, Inc.
What led you to your current role as the CEO of NABA?
What an opportunity it is to lead the transformation of a Black Institution and carry the legacy and vision of NABA’s founders, nine Black men who had an unwavering vision for the future of the accounting profession. Frank Ross, one our founding members, stands as an example of Black Excellence, and every day I think of what a privilege it is to be a part of NABA, Inc.’s history.
Achieving significance frames my view of leadership, and the idea of advancing missions forward fuels me.
After spending almost three decades in financial services in multiple leadership roles, it was transitioning to youth workforce development that afforded me a platform to learn more about barriers of entry for young people; the deeper landscape of higher education; the interplay of privilege, racism, and poverty in America; and the tension between skills and education, jobs and careers, and economic mobility and access.
Leading NABA, Inc. combines my passion, experiences, skills, and education to serve a mission that should inspire us all.
Why is bringing more Black talent into the accounting profession so important?
At NABA, we believe that accounting is a language: the language of money, business, and wealth. And, because part of our mission is to “path and pave a more just world,” we see closing this country’s wealth and income gap as a core part of this work.
For us, that means focusing on education, earnings, entrepreneurship, and the increased representation of Black Business Leaders at the highest echelons of enterprises. Accounting is the core and the crock of all of this work. We want Black people to learn it, study it, engage in it, work with it, fall in love with it, and become a viable and vibrant part of the future of global financial markets.
If you had to drill it down to one, what do you think the biggest barrier is to entering accountancy for Black students?
It’s hard to double-click on the biggest barrier. The truth of the matter is that the top three are deeply intertwined: the lack of representation (less than 1% of partners/principals in the top 20 firms are Black, and an even a smaller percentage of those partners/principals are equity partners), starting salaries that are lower than other fields, and the unimaginable cost and income loss burden of the additional 30 credit hours for the CPA licensure, which is a prerequisite for a manager role and the stepping stone for partner achievement.
We cannot shy away from those realities, and we must collaborate and find bold solutions to address the plaguing pipeline issues in this profession that not only ensure “good paying jobs,” but allow for the generation of wealth for Black Business Leaders. That is a proven pathway to the middle class and beyond.
NABA is an Accounting+ partner. What would you most like to see Accounting+ accomplish?
We believe in and proudly support the work Accounting+ is doing to make the profession more appealing to younger talent. Our hope is that together, we mobilize a collaboration between firms and corporate partners in designing and deploying programs and resources to Black and Brown communities while building a Black and Hispanic/Latin organization.
Lastly, what was your top takeaway from this year’s NABA convention?
Seeing thousands of leaders unite around our shared vision of empowering Black Business Leaders at the convention was so inspiring. From our partners who awarded students scholarships to the special guests who spoke life and encouragement into our attendees, and every Black Business Leader who chose to join us from across the country, it became clear to me that the analogy of fireflies rang true for many. We are grateful for the leadership of the CAQ, who were present for the duration of Insight: Elevate, and the interviews they conducted with our young adult attendees. Most of all, what a thrill it was to present Julie and Liz with the DEI Leaders of the Year Award!
Do you have questions about Bold Ambition or Accounting+? Send them to jgermain@thecaq.org, and we’ll answer them in our newsletter next quarter.
Enjoy the rest of your summer. I’ll be back with Bold Ambition Quarterly this fall.
Liz Barentzen
Vice President, Operations and Talent Initiatives
Liz Barentzen is the Vice President, Operations and Talent Initiatives at the Center for Audit Quality, where she oversees day-to-day and long-term strategic operations, as well as leads and advances strategic profession-wide initiatives to attract and retain talent.
Barentzen has 20 years of experience in Human Capital and is an Associate Certified Coach through the Georgetown Leadership Coaching program. A member of the New York Bar, she holds a JD from Brooklyn Law School and a BA in psychology from New York University. Liz also serves as a member of the American Accounting Association’s (AAA) Board of Trustees, where she helps to guide and facilitate the programming and activities of the AAA.