Presentation C Harris made at 2012 Indiana CPA Society Diversity Summit

1. Calvin Harris Jr., CPA – NABA National
President & Chair of Board
Indiana CPA Society - Diversity Summit
August 9, 2012
1

2. Discussion Overview

 History
 “Look how far we’ve come…”
 Statistics
 “Look at where we are today…”
 Opportunity
 “Look how far we can go…”
2

3. Definition and Key Questions

 How does one define “diversity” or “inclusion”?
 Ethnicity
 Gender
 Sexual orientation
 Where should (or can) success be evaluated?
 CPA licensee demographics
 Accounting enrollment and graduation demographics
 Accounting firm hiring (Big Four vs. others)
 Accounting firm staffing, retention and/or partners
 Non-public Accounting professionals
3

4. Definition and Key Questions

 Professor - “… of course, no one has a real incentive
to share their bad news, so it's very hard to nail it
down…”
 Our discussion today will focus on these various
ways of reporting the data, with a desire to identify
ways to improve (“no blame zone”)
4

5. History – “Look how far we’ve come…”

 Timeline
 1887 – AICPA founded
 1921 – John Cromwell (NH), 1st Black CPA in US
 1969 – NABA founded
 1969 – AICPA Minority Recruitment and Equal
Opportunity Committee (Minority Initiatives
Committee) created
 1972 - American Association of Hispanic Certified
Public Accountants (later ALPFA) founded
 2005 – Ascend founded
5

6. Definition and Key Questions

 How does one define “diversity” or “inclusion”?
 Ethnicity - 2010 US Census Percentages
 White ~ 69%
 Hispanic ~ 14%
 Black ~ 12%
 Asian ~ 5%
 Gender
 51% female
 49% male
6

7. Definition and Key Questions

 Numbers alone without context aren’t meaningful
 Persons of Color – 31% non-white
 Gender – 51% female
 Color and Gender ~ 65% female and non-white
 Total CPA’s (worldwide) ~ 650,000
7

8. “Look at where we are today…”

 INCOMPLETE grade
 Demographic information not readily available
 Self-selection of ethnicity
 Few rigorous studies
 Many associations do not track data
 Forced to rely upon specific trends BUT hard to
know if trends are close to success
8

9. 2011 AICPA Trends
In the Supply of Accounting Graduates and the Demand for Public
Accounting Recruits

 Professional Staff in “All” Public Accounting Firms
(pg. 41)
 White = 79%
 Black = 3%
 Hispanic = 4%
 Asian = 11%
 American Indian = 1%
 Multi-Ethnic = less than 1%
9

10. 2011 AICPA Trends
In the Supply of Accounting Graduates and the Demand for Public
Accounting Recruits

 CPA’s in “All” Public Accounting Firms (pg. 43)
 White = 91%
 Black = 1%
 Hispanic = 2%
 Asian = 5%
 American Indian = less than 1%
 Multi-Ethnic = 1%
10

11. 2011 AICPA Trends
In the Supply of Accounting Graduates and the Demand for Public
Accounting Recruits

 Partners in “All” Public Accounting Firms (pg. 42)
 White = 94%
 Black = less than 1%
 Hispanic = 2%
 Asian = 2%
 American Indian = less than 1%
 Multi-Ethnic = 1%
11

12. 2011 AICPA Trends
In the Supply of Accounting Graduates and the Demand for Public
Accounting Recruits

 College Enrollments in Bachelor programs (pg. 12)
 White = 71%
 Black = 9%
 Hispanic = 6%
 Asian = 6%
 American Indian = less than 1%
 Other/Unknown = 6%
12

13. 2011 AICPA Trends
In the Supply of Accounting Graduates and the Demand for Public
Accounting Recruits

 College Enrollments in Masters programs (pg. 12)
 White = 68%
 Black = 7%
 Hispanic = 4%
 Asian = 10%
 American Indian = less than 1%
 Other/Unknown = 11%
13

14. 2011 AICPA Trends (2010 data) to 1996

 Source - Report on Minority Accounting Graduates,
Enrollment and Public Accounting Professionals--1997
(AICPA, Minority Initiatives Committee, 1997)
White Black Latino Asian Other
Partners 98.7% 0.08% 0.3% 0.6% 0.2%
CPAs 96.5% 0.4% 0.9% 1.9% 0.2%
Professionals 92.7% 1.4% 1.5% 3.9% 0.4%
Accounting 74% 8.4% 7.0% 7.4% 3.0%
Graduates
2004 U.S. 75.1% 12.3% 12.5% 3.6% 1.0%
Population
14

15. Opportunity – “Look how far we can go…”

 Considerable progress made since 1996, BUT
considerable room for improvement
 Numerous Stakeholders and Numerous Approaches
 High School – ACAP, COAP, Firms
 Colleges – professors and firms
 Pre-professional – CPA exam prep, CAE
 Professional – engagement/coaching
15

16. Opportunity – “Look how far we can go…”

 Stakeholders are broad and need to work together in
a Holistic approach
 State societies
 AICPA
 Minority associations
 Colleges and universities and professors
 Accounting firms
 Corporate community
16

17. Reference Sources

 AICPA 2009 Trends study (
http://www.aicpa.org/InterestAreas/AccountingEducation/NewsandPublications/DownloadableD
)
 AICPA 2011 Trends study (
http://www.aicpa.org/InterestAreas/AccountingEducation/NewsandPublications/DownloadableD
)
 AICPA CPA’s of Color study (
http://www.aicpa.org/career/diversityinitiatives/downloadabledocuments/mic_e-book2541-331.pd
)
 Accounting Today, When Will the Profession Change, June 2012 (
http://www.accountingtoday.com/ato_issues/26_6/Accounting-profession-diversity-women-minor
) – C Harris quoted
 Accounting Today, Diversity in CPA firms: Real commitment or background noise?, Sept 2011
(http://www.accountingtoday.com/ato_issues/25_9/diversity-in-cpa-firms-real-commitment-
or-background-noise-59863-1.html)
 American Society of Women Accountants, 2012 Diversity in the Accounting and Finance Fields
(http://www.aswa.org/Images/Interior/resources/2012aswareport_final_061212_rgb72dpi.pdf
)
17

18. Reference Sources

 The CPA Journal Online, Black Accountants Give Back Too, 2008
(http://www.nysscpa.org/cpajournal/2008/508/perspectives/p17.htm)
 Dr. Theresa Hammond, US House of Representatives testimony July 15, 2004
(http://archives.financialservices.house.gov/media/pdf/071504th.pdf)
 Howard University Center for Accounting Education and Cook Ross, Inc, Retaining African
Americans in the Accounting Profession (http://cpatrendlines.com/wp-
content/uploads/2010/03/Howard-U-Retaining-African-Americans-In-Accounting-
Profession.pdf)
 Journal of Accountancy, In pursuit of inclusion: New initiative will focus on racial diversity, June
2012 (http://www.journalofaccountancy.com/Issues/2012/Jun/20114925.htm) – C Harris
 NYCPA, Minorities Create a Career Path for Success with COAP
(http://www.nysscpa.org/futurecpas/coap_article.pdf)
 Tax Diversity, Minorities in Tax 2010
(http://www.taxcareerdigest.com/articles/article10.pdf)
 UNC-TV The Vanishing Black CPA, 2009 (http://www.unctv.org/bif/2009/2504.html)
18

19. CPA Story

 “Swim upstream. Go the other
way. Ignore the conventional
wisdom. ”
 Sam M. Walton
19

20. Questions &
Discussion

CPA Diversity
How Can We Improve?
20

21. THANK YOU!

CPA Diversity
How Can We Improve?
21