Diversity, Equity, and Inclusion in the Accounting Profession: A Few Thoughts.
The more diverse your practice, the richer your work life and view of planning. Similarly, the more diverse the a clients and colleagues in your sphere, the more creative and innovative you can be.
DEI is good for business. Studies show that firms that are aware and participate in developing a DEI corporate culture are more successful (Vivian Hunt et al., "Diversity Matters," McKinsey & Company, 2015). This is not only true for large organizations, but also small ones, as will be explained below.
A recent report by Forrester found that "workplace belonging" leads to a 56% increase in job performance and a 50% reduction in turnover risk (Blaise Radley, What is Diversity, Equity & Inclusion in the Workplace?, Peakon Post, 2020). A series of studies in 2014, 2017, and 2019 by McKinsey evaluated the gender diversity of executive teams, finding that companies in the top quartile for gender diversity were 15%, 21%, and 25% likelier (respectively) to outperform those in the bottom quartile (Sundiatu Dixon-Fyle et al., "Diversity wins: How Inclusion Matters," McKinsey & Company, 2020).
Any business can benefit from incorporating DEI concepts in a manner that is appropriate to its particular niche. For a larger organization, implementing DEI programs and policies can demonstrate to current employees that the company cares about them and wants to create an environment that makes all employees feel that they belong. But DEI can extend beyond current employees to help attract new employees who, absent DEI initiatives, might not have been interested. DEI can entail reviewing hiring policies to enhance the organization's diversity with respect to gender, race, age, sexuality, disability, education, class, and perhaps even other characteristics. The Institute of Chartered Accountants of England and Wales captured the challenge facing the accounting profession: "While diversity practices are developing, progress is fragmented ... For the wider profession, there are long-term stakes in legitimacy, professional ethics, trust creation, and future recruitment" (Avani M. Desai, "Diversity in Accounting: An Ethical, Social, and Practical Imperative," Accounting Today, 2020).
Small CPA Firms Should Address DEI
Do these concepts translate to small public accounting firms and even solo practices? Yes, but perhaps in different ways. DEI does not only apply to staff, which small firms may not have. But they do have clients, they do engage in planning, they might write, lecture, or volunteer for charities. Each of these endeavors can be enhanced from a DEI perspective. Consider the following issues:
* An increased awareness and sensitivity to a client's religious or philosophical views may impact planning. For example, an individual's religious beliefs might prohibit investments in liquor stocks, drug stocks, or perhaps gun manufacturers. In terms of estate planning, an individual's religious beliefs might require appropriate charitable bequests? Many clients have deeply felt religious beliefs, and too often legal documents, investment policies, and other aspects of their planning simply don't address those important standards.
* Organizers, questionnaires, client mailings, and other communications can incorporate DEI considerations. For example, an organizer to help clients with estate and financial planning could inquire about lifestyle choices that may be critical to determining expenses for financial forecasts. These may also be important to income tax planning, such as determining what might qualify for medical expense deductions.
* Health challenges are common among the authors' clients, especially aging clients. A CPA firm's physical facilities should be fully accessible. CPAs can take CPE programs to learn about elder financial abuse to gain the knowledge and awareness to help clients facing these challenges. Financial abuse is not merely an issue for the elderly, but also for anyone with cognitive or other challenges.
* Forms and documents can be offered on the firm's website. Web-based meetings can be utilized even postCOVID-19 to make interaction and communications easier with clients that might have mobility challenges.
* Including "your" pronouns in e-mail footers can reflect sensitivity to LGBTQ+ considerations.
* The firm's website should reflect DEI considerations. This can be as simple as including diverse topics in articles and materials posted.
* CPAs should commit to mentoring younger professionals. Younger professionals are more likely to be of diverse backgrounds, and mentoring is a valuable means to boost their involvement and participation in the profession.
* Consider what steps make sense for the practice, based on the specific circumstances, resources, and client base. Every firm (or sole practitioner) has ways it can advance DEI and to do so cost-effectively and in a manner that is both comfortable and economically beneficial.
A Better Business, a Better You
Some CPAs don't understand the benefits a focus on DEI can bring. This is a conversation not only about what one must do for a rewarding and profitable practice--it's also about what to do to enrich yourself personally, your business, and more. The key is to be intentional in taking steps to make it happen.
Although studies show that women have come to represent more than 50% of accounting graduates over the past 20 years, and while the percentages of accounting undergraduates and graduates who are minorities have also increased, the numbers do not tell the whole story (Desai 2020). An AICPA Trends report shows that 42% of accounting graduates are African-American, Hispanic, American Indian, Asian or Pacific Islander, multiethnic, or other, yet total minority hiring in the world of American CPAs has remained lower (Desai 2020). What can be done to address this?
Learning about others whose religion, lifestyle, culture, and heritage are different from your own expands and enhances your understanding of yourself and brings interest and richness to your life. Interacting with others who are different than we are is something that brings light to our lives. That should help you maintain a more well-informed and aware persona--as well as become a better professional.
Next Steps for a Diverse Future
We need to break down barriers in the hiring process. Building a diverse and motivated workforce will enable us to better serve an increasingly diverse client base. Ultimately, clients will demand that their CPAs embrace DEI values. Inclusion in a CPA practice will ensure that every employee is given the opportunity to meet their potential. Employer firms will benefit. As Blaise Radley at Peakon states, "If diversity concerns building a workforce with a wide-ranging selection of backgrounds and experiences, inclusive policy is how you give them all a voice" (What is Diversity, Equity & Inclusion in the Workplace?, 2020).
The social justice movement, marches, and protests have forced us as a nation to make a sincere effort at self-reflection: to ask ourselves who we are, what are our values, and how we communicate with one another. The accounting profession has also been challenged to examine whether it reflects the diversity of the environments in which we live and work in and, more importantly, whether it embraces all people, religions, lifestyles, and cultures, both as practicing professionals and clients.
The accounting profession must become more inclusive and diverse to better serve its workforce, customers, and reputation. This is not a theoretical exercise, nor an endeavor for bigger firms. It is incumbent upon each of us, from the solo practitioner to the largest firm, to make the effort. Every professional and firm should, if it has not already done so, create an action plan of steps, appropriate to its practice, to enhance DEI. Make that commitment now.
Joshua Rose ns toe k has an MBA from Seton Hall University, East Orange, N.J. Martin M. Shenkman, JD, CPA, PFS, AEP, is an attorney at Shenkman Law in Fort Lee, N.J.
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|Title Annotation:||NEWS & VIEWS: Diversity & Inclusion|
|Author:||Rosenstock, Joshua; Shenkman, Martin|
|Publication:||The CPA Journal|
|Date:||Aug 1, 2021|
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