A perceived lack of diversity, equitable treatment, and inclusion could threaten the ability of the accounting and finance profession to transform itself and prepare for changes to come, according to a new research study conducted by the Institute of Management Accountants and the California Society of CPAs.

Titled “Diversifying U.S. Accounting Talent: A Critical Imperative to Achieve Transformational Outcomes,” the study examined race and ethnicity, gender, and LGBTQIA (lesbian, gay, bisexual, transgender, queer, intersex, and asexual) orientation in the U.S. accounting profession, including public and management accounting. It also examines the role of ethics in the profession’s overall progress around diversity, equality, and inclusion (or DE&I) and presents solutions to drive expansive change.

The Maryland Association of CPAs was among the partners that worked with IMA and CALCPA on the project.

The study found that there is a significant diversity gap between those in executive leadership ranks and the broader accounting profession as well as the U.S. population. For example, African Americans make up 8.5 percent of the profession but only 1 percent of partners at U.S. CPA firms and 1.5 percent of CFOs of Fortune 500 and S&P 500 companies. The survey revealed that diverse professionals believe they aren’t advancing in the profession because of a lack of equity and inclusion.

“Although our research highlights the stark reality facing the profession today, it also presents a great opportunity,” said IMA President and CEO Jeff Thomson, CMA, CSCA, CAE. “Members of our profession are telling us that the only way to overcome today’s DE&I challenges is to collaborate to enact meaningful change, and collective action needs to be taken now.”

The study found that 43 percent to 55 percent of respondents from groups underrepresented at senior levels left their employers due to a perceived lack of equitable treatment, and at least 30 percent have left because of a lack of inclusion. The lack of DE&I poses risks to the success of the profession’s transformation currently under way. As many as 18 percent of the respondents from diverse demographic groups left the profession altogether due to these factors.

“The diversity gap between senior leadership and the broader accounting profession is a huge wakeup call that this needs to be fixed through real solutions,” said CalCPA President and CEO Anthony Pugliese, CPA, CGMA, CITP. “More diverse leaders are needed to connect people of all backgrounds to the profession and to serve as role models so we can retain and develop the next generation of talent.”

The study concluded that for the profession to continue to grow and succeed with a robust talent pipeline, actions to address DE&I issues need to be taken now. This includes bringing in and promoting talented people based on relevant and unbiased factors rather than demographics.

“This report gives a voice to members of the profession by presenting their contemporary experiences and is meant to heighten awareness and inspire change at all levels,” said Loreal Jiles, the IMA’s director of research and lead researcher on this project.

The report acknowledges DE&I improvement efforts that are already under way and suggests action in four areas: awareness, attraction, promotion, and accountability.

“If we collaboratively work to close the diversity gap, it will not only have a positive impact on the front-end pipeline of candidates coming into the profession, it will work to curb the loss of talent that we are seeing,” said Brad Monterio, CalCPA’s chief learning officer and CalCPA research lead on this project.

In addition to the MACPA, the partners that worked with the IMA and CalCPA on the study included the International Federation of Accountants, the National Association of Black Accountants, the Association of Latino Professionals for America, the National Society of Black CPAs, the PhD Project, the Connecticut Society of CPAs, the Colorado Society of CPAs, the Florida Institute of CPAs, the Illinois CPA Society, the Massachusetts Society of CPAs, the Ohio Society of CPAs, the Pennsylvania Institute of CPAs, and the Texas Society of CPAs.

The first in a multi-part global series, the report is informed by results from an online survey of more than 3,000 current and former U.S. accounting and finance professionals and interviews of nearly 60 accounting, human resources, and DE&I practitioners and academics.

The report is available in its entirety here.