The authors’ firm, KPMG, is working closely with the Center for Audit Quality through initiatives such as the Bold Ambition campaign and others to build a pipeline of diverse candidates. KPMG and other firms have appointed chief diversity officers, implemented anti-bias training, created multicultural employee affinity groups, and issued diversity transparency reports. They are providing scholarships and working with high schools, community colleges, and universities, including Historically Black Colleges and Universities (HBCU), Hispanic-Serving Institutions (HSI), and Tribal Colleges and Universities (TCU), along with other universities, to invest in a diverse and sustainable pipeline of talent.
There are significant opportunities for the accounting profession to improve in this area. For example, according to the 2021 AICPA Trends report, 77% of CPAs and 82% of partners identify as white (https://bit.ly/3RmyE4T). Only 59% of people who hold both a bachelor’s degree and master’s degree in accounting are white, demonstrating that the upper levels of the profession are not as racially diverse as the potential talent pool.
To create a more diverse profession, leaders can confront systemic obstacles facing the profession:
- Break down barriers to entry for diverse talent.
- Optimize an accounting student’s fifth year of study for CPA eligibility.
- Recruit, train, and promote diverse talent to grow a sustainably diverse workforce.
Connecting with students in high schools and community colleges and educating them about the profession could increase matriculation in accounting programs.
Breaking Down Barriers
The rigorous standards to become a CPA are important and necessary. Reaching diverse talent earlier in the professional development process could be the key to creating a larger and more diverse CPA pipeline. Connecting with students in high schools and community colleges and educating them about the profession could increase matriculation in accounting programs.
For example, KPMG professionals have mentored more than 2,500 students and interns in expanded Rise and Embark programs. KPMG’s Embark Scholars program provides early access to career development and practical experiences that help students of color grow into leaders. Through a multiday leadership conference, KPMG’s Rise Leadership Institute works with high-performing first- and second-year college students who identify as a person of color, veteran, person with disability, LGBTQ+ individual, or first-generation college student. Moreover, audit leaders can showcase the accomplishments of auditors from diverse backgrounds, highlighting progress and the initiatives to support and advance diverse talent.
The CPA Fifth Year
Auditors take great pride in their training to conduct high-quality audits consistently. A key component of an auditor’s training is a robust undergraduate, and potentially graduate-level, requirement of 150 credit hours to be CPA eligible. This credentialing requirement means students must finance an extra year of college rather than join the workforce with their peers.
Many students of color and other disenfranchised groups may shy away from pursuing a CPA because of the costly 150-credit requirement. Making an audit-oriented education more accessible and affordable through scholarship opportunities and community college programs is critical to ensuring the next generation of auditors is as diverse as the world today.
Although certain undergraduate and fifth-year programs provide extensive support in passing the CPA, students coming from less traditional academic paths or smaller programs have a steeper hill to climb. Importantly, under-represented groups are more likely to come from those academic tracks, making a difficult and frustrating experience also inequitable.
KPMG’s Strategy to Increase Diversity
CPA firms are taking steps to increase diversity across the audit profession. For example, KPMG implemented its Accelerate 2025 initiative in 2020 to increase professional and personal development opportunities for underrepresented groups. The program has ambitious goals, including achieving 50% partner and managing director representation from underrepresented groups, doubling Black representation among partners and managing directors, increasing firmwide Black and Hispanic/Latinx representation by 50%, and increasing promotion of underrepresented talent into leadership roles.
KPMG has a three-pronged strategy for addressing diversity: Getting Here, Succeeding Here, and Leading Here. The firm’s values are the cornerstone of its DEI efforts as it strives for a culture where everyone is engaged in creating an inclusive environment for all to thrive, regardless of background or experience.
Through KPMG’s Getting Here framework, the firm seeks to improve its recruiting processes and partnerships. KPMG has prioritized partnerships with HBCUs, resulting in a 40% increase in HBCU hires in recent years. It is also working with HSIs and TCUs to build a diverse workforce.
KPMG’s Succeeding Here framework fosters an environment of DEI and provides access to development and advancement opportunities. For example, KPMG increased support for professionals with disabilities, developed training and employee engagement programs for high-performing people of color, hosted more than 20 workshops in 2021 to prepare employees for a meaningful work experience, and launched a campaign to encourage self-identification across a diverse spectrum.
KPMG’s Leading Here framework is intended to empower diverse talent with clear pathways for advancement and promotion. This approach—a blend of training, learning, and experiences—focuses on creating a pipeline of diverse leaders who embody the firm’s values. The success of this program is reflected in KPMG’s promotion of more than 50% of managing directors and partners from underrepresented groups, part of the 64% of total promotions from underrepresented groups in 2021.
What Lies Ahead
Leaders can work creatively and collaboratively to develop a more diverse talent pool and recruit, retain, and promote auditors from underrepresented groups. In turn, these DEI efforts will translate into a more effective and inclusive audit experience for clients.
