In July 2023, a nonprofit group called America First Legal — founded by Trump senior advisor Stephen Miller in 2021 — sent a cease and desist to PwC “demanding they stop using racial preferences in hiring and internship programs” after a long-awaited Supreme Court decision effectively ended affirmative action. This is what they said in a press release at the time:
Today, America First Legal’s (AFL) Center for Legal Equality sent a cease and desist letter to the accounting firm PricewaterhouseCoopers (PWC) demanding they stop using racial preferences in hiring and internship programs.
PwC is an internationally recognized name as one of the “Big Three” accounting firms. But in the United States, they are among one of the worst offenders when it comes to implementing racially discriminatory practices. Not only does PwC have two explicitly race-based internship programs (i.e., one must be a certain race to qualify), but it also administers a third and its principal internship program in a discriminatory manner. Furthermore, PwC has hiring and promotion quotas based on race and sex, discriminating against individuals at every step of their careers.
OK, we didn’t really need to include that whole second paragraph but LOL. Sorry, KPMG.
PwC is the only accounting firm that appears on America First Legal’s “Woke Corporations” page. They’re joined by Starbucks, Activision, NASCAR, Mattel, and tons more. Yes, we live in a timeline where NASCAR is accused of being woke. For some reason they chose to single out PwC even though their competitors have similar initiatives in place and have never tried to hide it, quite the opposite in fact.
PwC would go on to drop diversity targets in January of 2024.
On Monday, President Trump signed an executive order ending “radical and wasteful government DEI programs” (the order’s words, not ours) in all federal agencies. Said the order:
The Biden Administration forced illegal and immoral discrimination programs, going by the name “diversity, equity, and inclusion” (DEI), into virtually all aspects of the Federal Government, in areas ranging from airline safety to the military. This was a concerted effort stemming from President Biden’s first day in office, when he issued Executive Order 13985, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.”
Pursuant to Executive Order 13985 and follow-on orders, nearly every Federal agency and entity submitted “Equity Action Plans” to detail the ways that they have furthered DEIs infiltration of the Federal Government. The public release of these plans demonstrated immense public waste and shameful discrimination. That ends today. Americans deserve a government committed to serving every person with equal dignity and respect, and to expending precious taxpayer resources only on making America great.
Two days later, certain federal employees started receiving notices that they would be placed on paid leave. “I’m mad,” said one federal employee to NBC News who asked to remain anonymous to protect his future career prospects in government. “I’ve put 23 years of blood, sweat and tears into this agency,” he said. Definitely not an IRS employee.
An Office of Personnel Management (OPM) memo to heads and acting heads of departments and agencies gave a January 31 deadline for federal offices to provide them with “a written plan for executing a reduction-in-force action regarding the employees
who work in a DEIA office” and “a list of all contract descriptions or personnel position descriptions that were changed since November 5, 2024 to obscure their connection to DEIA programs.”
Full memo here:
All of this begs the question: What happens to DEI at the big firms (including KPMG this time)?
It’s worth noting we were smugly waiting for firms to swap in their rainbow logos on June 1 last year so we could snark on the performative rainbow capitalism but…
Someone's gonna be working on Saturday switching in those rainbow profile pics pic.twitter.com/KCPawE2G5W
— Going Concern (@going_concern) May 30, 2024
…that didn’t happen. PwC eventually changed theirs for June and Deloitte slapped some rainbows on the @lifeatdeloitte account. The latter still has a rainbow header today.
It seems firms were already pulling back from public-facing inclusion efforts long before President Trump called government DEI programs “illegal and immoral discrimination.” As private companies they can do what they want but they’ve also got to balance appearance and talent needs with their primary objective of making money from clients.
Despite the firms’ earlier gestures and posturing, a 2021 study led by the Institute of Management Accountants (IMA) and the California Society of CPAs (CalCPA) found that one out of five LGBT respondents left the profession due to not feeling the sense of “belonging” firms are always advertising. You can find the full report here.
On the race side, in “Smoke and Mirrors: Race and the Black CPA” published by CPA Journal in 2022, Anton Lewis, PhD writes:
I charge all the Big Four and mid-tier firms of enacting racial cover of some sort, saying the right things, hitting the correct racial markers to avoid any accusation that their firms are deeply connected with any notion of institutional racism [Kyriacou, O. & Johnston, R. “Exploring Inclusion, Exclusion and Ethnicities in the Institutional Structures Of UK Accountancy,” Equality, Diversity and Inclusion: An International Journal, vol. 30, no. 6, pp. 482–497, 2011; Miles, R., & Brown, M., Racism, Routledge (1989)]. And yet humility, not hubris, is required when dealing with racial representation in accounting.
A better question would be to ask what EY and other big firms are willing to risk in terms of their image and reputation to truly get a handle on a race problem that has no easy fix, never mind the other inequalities encapsulated by D&I. We have been here before. Accounting firms traditionally are long on promise, but short on results when it comes to increasing the representation of people of color, particularly Black professionals, within its walls. Assurances have been made before, and all have failed. The AICPA, as far back as 1965, resolved “that there should be no discrimination because of race, color, sex, or national origin in the employment practices of individuals or firms engaged in the practice of accounting” (Hammond, T., A White-Collar Profession, University of North Carolina Press, 2002). In the intervening 56-year period, this resolution has not held true.
Black CPAs are by far the most underrepresented group within the CPA profession, says the National Society of Black Certified Public Accountants (NSBCPA) on their website. An oft-cited figure is that less than 1% of CPAs in the US are Black though that figure may be slightly higher.
So. Is DEI dead? Was it never more than all talk and no action? We’ll just have to see.
Terms like “DEI” are popular code words to substitute for the socially unacceptable use of the N-word these days.
Btw – When I started in public accounting, the partner ranks were filled with old, womanizing, unremarkable white men, most of whom could never succeed, or maybe even function, in today’s work world. It was basically the exact same system that opponents of DEI are decrying today. Unqualified people advancing not because of their abilities or merits, but because of certain other factors that gave them preference (i.e. being white men).
The percentage of black partners tracks very closely with the percentage of black accounting graduates. It’s not the responsibility of private companies to change the racial makeup of who colleges are graduating in different fields.
Ah… the NIMBY response. Issues like this are never anyone’s fault, therefore issues like this never anyone’s responsibility. As if each step along the way to a successful career as a CPA occurs in a vacuum.
Anyone with even a shred of ethical integrity understands that small changes every step of the way and in every facet of the industry can and will lead to the change everyone (not simply women, ethnic minorities, or gender minorities) needs for the profession to thrive. I agree that colleges need to shoulder their responsibility when it comes to the perpetuation of bias and inequity in the industry. This does not mean that there is nothing the accounting industry can do to help facilitate this, or that firms should do nothing to address these issues within the private sector.
If only 1-2% of accountants are black in a population that is 15% black, society needs more black accountants (this from an old white guy). That’s a case where DEI is a good thing, and the Big 4 are right to take the lead. It’s when you have a situation where the demographics of your employees skew disproportionately the other way that you might have taken DEI a bit too far. While other employers and professions might have that problem, it will be a long time before public accounting gets there.