The Cost Of Inequality: Why Accounting Firms Must Do More To Support Black Women

In 1943, Mary T. Washington Wylie became the first Black woman to receive a certified public accountant (CPA) license in the U.S.

Throughout her decades-long career, Washington Wylie made it her personal calling to introduce more Black men and women to the profession. Despite Washington Wylie’s strong influence and dedication, the accounting profession only has made incremental progress when it comes to Black women’s representation in the field.

African Americans continue to be significantly underrepresented in accounting. Only 2% of certified public accountants (CPAs) are African American and only 1% of partners at CPA firms are African American, according to the most recent data from the American Institute of Certified Public Accountants (AICPA).

Though there are not recent statistics for Black women in the field, the NABA Inc. estimates there are only 5,000 Black CPAs in the U.S. Even if women make up a majority of that number, we still have a long way to go to achieve any form of gender or racial parity in accounting.

Diversity is not just nice-to-have in accounting, it can make firms more competitive. If accounting firms want to succeed, they must do more to advance Black women. Here’s why.

The Costs of Underrepresentation

Black women’s underrepresentation in accounting is tied to a long history.

According to accounting historian Theresa Hammond, various state laws in the early 20th century barred African Americans from sitting for a CPA exam. But even in states where African Americans could sit for exams, they encountered significant barriers. In the North, many states required at least two years of experience to become a CPA, but many Black men and women faced challenges finding someone who would hire and train them in the majority-white accounting field.

This history is reflective in the numbers we see today, but this underrepresentation comes at a larger cost to the accounting profession.

In a competitive job market, every firm needs access to all the skilled talent it can get. But the accounting profession still faces a pipeline problem. The profession is not as visible to young African Americans as professions such as medicine, engineering or law, so the candidate pool for many firms still isn't as diverse as it could be.

Study after study also shows diverse teams outperform those that lack diversity. Gartner research indicates diversity improves team performance by 30%. Separate research from the consulting firm McKinsey & Company indicates companies with more gender and ethnic diversity are 36% more profitable than companies with less diversity. In fact, McKinsey’s research found that the more diversity increased within a company, the more it outperformed its competitors financially. Other studies indicate teams with equal gender representation generate higher sales and profits.

There are countless reasons diverse teams perform better, whether it is greater employee engagement due to a stronger sense of belonging and higher retention and by extension greater institutional knowledge and expertise. It also could be the unique and varied perspectives diverse team members bring to their organizations to help them better understand their customers and the broader business and social environment in which they operate.

Diversity in accounting is particularly important because there is a nationwide shortage of accountants. For the profession to survive and provide the financial governance that is so vital to our economy, we must prioritize diversity and better support Black women in the field.

How We Can Get More Black Women into Accounting

The accounting profession has tried to address issues of representation. As of 2021, 94 CEOs of accounting-related organizations had signed the CEO Action for Diversity & Inclusion pledge. The Big 4 accounting firms promote an inclusive culture, but one analysis found there has also been pushback within these organizations in the form of “reverse racism” claims in the hiring process. Additionally, women are still underrepresented at the senior leadership level within these firms — and the accounting industry as a whole.

It is time we move past pledges and implement real, sustained action. We can start by addressing accounting’s pipeline problem. Accounting firms need to forge stronger relationships with local high schools, community colleges and historically Black colleges and universities (HBCUs) to introduce Black women to the profession and show that it is a viable career path that offers stability and economic mobility.

We also need to get more Black girls and women involved in and excited about science, engineering, technology and math (STEM). Too often, young women are discouraged from pursuing math-related professions and are instead nudged toward professions that focus on softer skills and caregiving, such as teaching or nursing. Teaching and nursing are laudable, valuable professions, but we need to expand the possibilities for women and show them they can succeed in accounting and finance.

Firms also need to do more to retain Black women once they get them in the door. Hammond, Frank Ross, one of NABA’s founders, and Ruth Harris, the first Black female CPA in the state of Virginia, appeared on the Journal of Accountancy podcast and said that mentorship, sponsorship and allyship were critical to diversify the profession.

Hammond said she often hears from Black colleagues and CPAs their input is only valued when it comes to diversity issues, but they are not always placed on high-priority projects that increase their visibility or cultivate their leadership skills. Ross says mentors and sponsors helped him succeed throughout his 38-year career at KPMG, giving him the opportunity to work on big accounts such as United Artists Agency and Revlon that helped him steadily ascend the leadership ladder. Accounting firms must find more collaboration opportunities to connect Black women in their organizations with colleagues of different backgrounds, whether it is through formal mentorship programs, project engagements or strategic initiatives where Black women can naturally form these relationships and cultivate allies.

Firms also can do more to encourage women’s participation in the workforce, whether it is through returnship programs for women who have been out of the workforce due to caregiving responsibilities or career transition programs for women who have transferable skills but may need additional training and support to enter the profession.

Harris, who got her CPA license in the 1960s while teaching at Virginia Union University in Richmond, says mentorship and representation are so important. As a Black faculty member, she often worked with her students to get them internships and advocated for them when they sought jobs. This highlights another important point — we need more Black accounting teachers and professors. Even though the community of Black accountants is only 5,000-strong, we can give back in big and small ways by teaching online courses, serving as adjuncts at local colleges and universities, and by giving presentations to high school and college students, participants in workforce development programs and women-focused organizations to introduce them to the accounting profession.

People often cannot envision becoming what they cannot see. Increasing Black women’s representation in accounting requires a multifaceted approach, but the simplest place to start is by reaching out and showing Black women that accounting is a viable professional pathway for them, one that can lead to a long lasting, financially-rewarding career.