In the face of recent backlash and a broad corporate pullback on diversity, equity and inclusion, experts say the accounting profession largely remains on track with its efforts. 

But while the profession remains strong in DEI, experts point to a loud minority amplifying an unpopular sentiment that, as a result, may see some firms quietly retreating out of fear of legal or political backlash. 

Experts agree that now is not the time to become complacent. They remind accountants that DEI is ultimately a boon to firms in terms of the bottom line and talent development — making it an invaluable lever to pull amid an ongoing talent shortage.

Breaking down DEI

The politicization of DEI has made it easy to lose sight of what the term actually means and what its implementation looks like in a firm. 

Diversity encompasses more than just race, ethnicity and gender. It also refers to age, marital status, parental status, neurodiversity, socioeconomic status, veteran status, nationality, immigration status, physical ability or disability, religion and more. 

“I don’t know how we let someone take the word ‘diversity’ and make it all things bad,” said Kimberly Ellison-Taylor, former chair of the American Institute of CPAs’ National Commission on Diversity and Inclusion. “To the extent that people don’t really understand what diversity means, that’s when you see them using it, not knowing that it includes the veterans programs, it includes the programs for young people, it includes programs for women, it includes mental health programs.”

Equity is the “assistive things that people need in order to be the best version of themselves,” Ellison-Taylor explained.

Equity is often conflated and confused with equality, but the difference is significant: Equality entails providing everyone with the same treatment across the board, while equity entails providing varying kinds of help according to each individual’s needs.

“Originally, we used to talk about equality, and equality was, ‘We’re all equal. There’s a level playing field.’ Part of what DEI looks at and says is that not all people have the same opportunity as others do, and some people need a boost to enable them to have that opportunity,” said Donny Shimamoto, founder of CPA firm IntrapriseTechKnowlogies. “That’s why they show that picture of the sliding boxes. The shorter person needs a bigger box to have the equal view over the fence. If you gave everyone the same box, which is equal, the short person still can’t see over the fence.”

Lastly, inclusion is making sure everyone feels like they have a place in the profession. 

“If we’re doing it well, everyone would know where they fit, and they would not begrudge the assistance that other people are getting in order to be their full, productive selves,” Ellison-Taylor said.

Temperature check

In 2020, George Floyd was murdered by Minneapolis police, inciting a summer of racial unrest across the country. In corporate America, Floyd’s death prompted a wave of renewed commitments to DEI initiatives and programs, such as implementing diverse recruitment practices, increasing pay equity, establishing employee resource groups, and hosting trainings on topics such as unconscious bias and microaggressions. But now major companies like Ford, Microsoft, Tractor Supply, John Deere and Harley-Davidson are making headlines for reversing their DEI commitments.

It’s the result of recent political and cultural rollback: The Supreme Court decision in June 2023 effectively ending affirmative action admission programs at colleges and universities across the country, state lawmakers passing legislation restricting DEI programs on campuses and other public institutions, and powerful businessmen such as Bill Ackman and Elon Musk vocally arguing against DEI.

The general consensus among accounting leaders is that most firms are still moving forward, despite the politicization and broader corporate backlash, while a small group have pulled back. Where experts disagree is the degree to which firms are pulling back and just how many are doing so.

“The accounting profession remains strong in our stance on the importance of DEI. The future of the profession demands it,” said Anoop Mehta, past chair of the AICPA and current chair of the AICPA NCDI, noting that it is a loud minority that opposes DEI. “Now certainly is not the time for employers to overreact to whatever is going on or what you’re seeing in the media. … This is now the time to double down.”

Bonnie Buol Ruszczyk, president and manager of the Accounting MOVE Project said, “It depends on the firm that you’re looking at.”

“This is a really loud minority,” she said. “They’re the squeaky wheel, but most people do feel that this is important. They may be on different spots on the spectrum as to how important it is or what elements of it are important, but this is not a 50-50 kind of thing by any means.”

Sandra Wiley, president of Boomer Consulting, said that many firms are frightened to associate with the politics and fear the legal risks their DEI initiatives may pose. 

“Firms are almost scared to talk about it anymore because they’re afraid that what people are trying to say is that the firm will be more Republican or Democrat, which is stupid,” Wiley said. “It’s not about politics. It’s about the human aspects of what is right and what is not right.”

Firm leaders “don’t want to admit that there’s a systemic problem going on,” Wiley said, and that refusal results in top leadership being majority male and white.

Wiley said some firms are pulling back for financial reasons — they look at DEI positions in their firm and ask if they’re really boosting profitability, which means DEI leaders “have got to start looking at their metrics deeper so that they can protect their positions.” 

“The pushback on it is a little bit dumbfounding to me,” Buol Ruszczyk added. “There are those that have been in positions of power that see this as somebody trying to take their power away.”

But she clarified that implementing DEI does not mean leadership giving up their piece of the pie: “What it does is it creates a larger environment.”

“Pulling back is only going to position your firm as being run by people that don’t care about this kind of stuff,” she said. “They don’t care about their employees. They don’t care about reaching people outside of the majority of firm employees.”

The upsides of DEI

Leaders say DEI is an obvious solution to the profession’s pipeline problem. With fewer students studying accounting, fewer earning their CPA and even fewer staying in the profession until they make partner, firms need to improve both recruiting and retention. 

“When people say they can’t find talent, I’m like, ‘Where are you looking? Who are you bringing? Who are you asking?'” Ellison-Taylor said. “To some degree, it takes diverse talent to help locate diverse talent.”

Trevor Williams, audit partner and director of DEI at GRF CPAs in Bethesda, Maryland, said firm leadership is mistaken “if you don’t think your employees want to see the staff be diverse.”

“In order for DEI to be successful, there has to be a tone at the top, not just one person in leadership,” Williams added. “In order for staff to really have buy-in, they need to see that their leaders are actually bought into the various initiatives or the culture of the firm.”

“Organizations and firms do their due diligence and go through the interviewing processes, so please believe that these candidates are doing the same,” Williams said. “It’s very easy to go on your firm’s website and do a dropdown and see what leadership looks like, and if the leadership doesn’t look like that particular ethnic group, they’re not going to be that eager to join the firm.” 

The importance of diverse leadership cannot be overstated. Women, for instance, have consistently comprised just over half of all firm employees but often drop from the partner pipeline at the senior management level. This year, women comprised 35% of partners and principals, and 35% of management committees, according to the 2024 Accounting MOVE Project report. 

DEI is important to retaining young talent, too. For the next generation of accountants, seeing a diverse workforce when they walk through the doors is an important factor in convincing them to stay.

“Gen Z, the 20-year-olds that are popping up in the workplace today, they simply do not understand why there is even a problem,” Wiley said. “And what they really don’t understand is when they walk into the workforce, and it is completely different from what they have felt and seen and experienced in their life outside of the firm. So they go to college, or they go to school, or they go to networking events with their friends and they see a ton of diversity, and then they walk into a firm and it looks whitewashed, and they don’t get it.”

“I don’t understand why firms aren’t looking through that lens and seeing what the young people are seeing today. And so unless we change that, we are not going to retain,” Wiley continued. “They are going to leave in mass numbers, which is what’s happening right now.”

Research shows that DEI impacts the bottom line. Companies in the the top quartile for gender diversity on executive teams are 25% more likely to have above-average profitability than companies in the bottom quartile, and companies in the top quartile for ethnic and cultural diversity outperformed by 35% in profitability, according to a McKinsey report.

To break it down, retaining a diverse workforce can increase innovation and collaboration. 

“It’s really important, I believe, to have different perspectives at the table in the conversations,” said Lexy Kessler, vice chair of the AICPA and mid-Atlantic managing partner of Top 100 Firm Aprio. “If everybody has the same opinion, you’re not going to get the right answer. If you have people with different opinions and different backgrounds coming into conversation, then you get to the right answer.”

Kessler pointed to the cost of employee turnover. The cost of replacing an individual employee ranges from one-half to two times the employees’ annual salary, according to Gallup research. 

Client engagement is also a factor. “From a public accounting perspective, and I would think from a business and industry perspective as well, your investors, your clients, the business community, are diverse,” said Kessler. “If they see somebody that looks like you, there’s a connection.”

What’s in a name?

Some firms are dropping the name “DEI” in favor of using less politicized language such as culture, inclusion, wellbeing and belonging. They’re also emphasizing the human aspect of these efforts with terms like “people-centered” and “human-centered” leadership.

“By and large, many of the firms, I think, are standing on their values, standing on what means the most to their firm, and they’re sticking to it,” Ellison-Taylor said. “They may be calling it something different, but they are still doing the work, and I think that’s the most important part.”

“This is not a political issue,” Buol Ruszczyk said. “This is about people and about creating systems and situations where people are treated fairly.”

“You have to make it happen,” warned Mehta. “You can’t wait and hope for the best. You have to put processes in place, and you have to be intentional about it.”