Black Accountants Give Back Too

By Vickie Cox Edmondson

E-mail Story Print Story

• They have a very narrow perception of what accountants do;
• They believe accounting provides relatively little opportunity to make a contribution to society; and
• They do not see an opportunity to give back to their communities.

James compared the accounting profession to fields like law and medicine, which have traditionally been more successful at attracting black students. He noted that many black students are familiar with successful doctors and lawyers serving their communities and may not be aware of opportunities for accountants to help people in the communities that have supported their success.

James offered practical steps that accounting professionals could create to help correct these misconceptions:

• Get involved in organizations that serve high-achieving students of color;
• Provide internship opportunities to high-achieving students of color;
• Create contacts at historically black colleges and universities (HBCU); and
• Become involved in communities with significant populations of color.

Additionally, James highlighted efforts of the National Association of Black Accountants (NABA) and the Inroads organization, and he encouraged participation in these and similar programs.

While the philanthropic efforts of CPAs often include speaking to professional associations, fraternities and sororities, and community and civic organizations, and donating money and time, this article addresses students’ perceptions that black accountants do not give back to society and their communities by highlighting the role that accounting professionals may be able to play in black-owned businesses. The number of black-owned businesses in the United States is rapidly growing, and black-owned business enterprises are considered an important segment of the national and global economy. I believe there are significant implications for accounting professionals, and for black accounting students who want to give back to society and their communities.

Business Opportunities and Challenges

Recruiters often steer black students toward the accounting profession by implying that they have an opportunity to help black-owned businesses. Black students should be informed about the state of black businesses, especially in their increasing size and variety. Although many black entrepreneurs continue to pursue traditional black businesses activities (e.g., mom-and-pop food stores, small restaurants, barbershops, and beauty parlors), a greater number of black entrepreneurs are pursuing a wider variety of economic opportunities. Black entrepreneurs who are involved in construction, commercial banking, financial planning, insurance, investment banking, money management, real estate, and other professional and technical services will need accounting services beyond mere bookkeeping and tax preparation.

Additionally, black students should be informed of the obstacles that many black entrepreneurs face and the public-sector economic development strategies designed by federal, state, and local governments to assist blacks and other people of color who own businesses. Although the number of black-owned businesses is growing, historically these businesses have been underserved in the private market and undercapitalized in comparison with white-owned businesses. Obtaining financing is one of the major problems that black business owners encounter, and many of them perceive the problems of obtaining loans or lines of credit to be among the major obstacles to success.

Black students who want to give back to their community should also be informed of the individual efforts of people like Maynard Jackson. This author (Vickie Cox-Edmondson), with George Munchus (“The Atlanta Way: A Gateway to Entry for Ethnic Business Enterprise,” Entrepreneurship Policy Journal, 2001), has previously described Jackson’s efforts to assist black entrepreneurs when he was elected Atlanta’s first black mayor in 1973. At that time, less than 1% of the city’s $33 million in contracts were issued to businesses owned by people of color, although 60% of the city’s population was black. None of the city’s banks had blacks on their board of directors or above the level of assistant vice president. This kind of disparity was not only seen in Atlanta, but it was prevalent throughout the United States.

Under Jackson’s leadership, Atlanta’s city government used its power as a large buyer to encourage private companies to work with businesses owned by people of color on public projects, particularly in the construction industry. Jackson saw his position as mayor as not only an opportunity to increase the number of ethnic business enterprises doing business with the city, but as an opportunity to increase the number of businesses owned by people of color and the number of people of color in positions of influence in private companies. Jackson implemented a law requiring that 25% of the city’s projects be set aside for businesses owned by people of color. He also encouraged and pressured Atlanta’s banks to hire more people of color in positions of authority.

In a city that served as headquarters for the Ku Klux Klan in the 1920s, Jackson’s actions received much criticism from businesses and associations that were already in the construction industry. As more blacks who shared Jackson’s views were elected as mayors of major cities in the United States., however, this policy became a national model known as “the Atlanta Way.” Several states now administer similar programs, including Illinois, California, North Carolina, Texas, and Florida.

Accounting Opportunities

Some people view giving back as providing services for free; however, some professions inherently give back to society. Successful black-owned businesses eliminate the need for public-sector economic development strategies, and accounting professionals may be able to play a key role in the success of black-owned enterprises.

Black entrepreneurs need to be informed about the range of activities that accountants provide. The black community suffers from a lack of understanding of what accountants—CPAs in particular—do for their clients. There is a perception that the primary role of accountants is to ensure that taxes are paid properly to avoid audits. Thus, people may not recognize the added value of working with accountants who hold designations that indicate specialized training.

While these basic functions are important, little attention is given to the expertise CPAs provide in helping to improve operational efficiency and documenting good management practices. An enlightened CPA may be able to work with black entrepreneurs to recommend an accounting system that will ensure that their annual financial statements and loan documents demonstrate to the government and other stakeholders that their business’ outputs are worthy of funding and other support. Without funding and an effective accounting system, many of these businesses would lose contracting opportunities. Without external funding, many black-owned businesses would struggle to survive.

The lack of black role models in the accounting profession (in both academic and professional settings) leaves many blacks without significant insights into the profession. Intuitional and anecdotal evidence leads this author to suspect that aiding black entrepreneurs is not emphasized in accounting programs. While adding a module or course that strives to teach black students more about black entrepreneurship may not be feasible, one of the best ways to encourage black students to pursue careers in accounting may be to introduce them to successful CPAs (regardless of race) and inform them of the opportunities and rewards that the profession provides. As recruiters draw black students to the field and as business faculty members mentor and motivate black college students, more black role models will be created.

Not Doing Well By Doing Good

While the opportunities outlined above may help black students see how they can give back to their community, “doing well by doing good” often means giving money as well as performing services. As shown in James’ study, high-school students perceive accounting to be a high income–earning profession. Those trying to recruit blacks into the profession based on the premise that they have an opportunity to help black-owned businesses may have to overcome the perception that black-owned businesses do not perform well. Thus, relying on a client base of black-owned businesses may lead to lower than the expected income in the field of accounting. Black students who want to be able to give back financially may view working with black-owned businesses as a limitation to their ability to give back.

This misconception exists despite reports from the U.S. Census Bureau stating that the nation’s 1.2 million black-owned businesses generated revenues of $88.8 billion in 2002 (the last year reported). This misconception may be addressed by introducing accounting students to successful CPAs (regardless of race) who work to give back to the community, and allowing them to discover how they choose their clients, how they decide what services are needed, and how CPAs participate in charitable giving. The answer may be that black CPAs do not limit their clients to black entrepreneurs. Instead, they seek to work with a mixture of clients across a diverse range of industries, size, and performance levels.

Leveraging Expertise for Success

The opportunities for black accountants and CPAs are plentiful. For those who want to give back to their communities, accounting gives black business owners the information they need for a competitive edge, and also helps to identify competitive disadvantages that need to be addressed within the business. By becoming accountants, blacks increase their knowledge of accounting principles and practices, and may be able to use their experience and skills to advise black business owners on many financial matters that can help them make better business decisions, and thus improve their chances for business success. Regardless of where they work, whenever black accounting students become accounting professionals, they may be able to help society and use their knowledge to give back to their communities.

©2009 The New York State Society of CPAs. Legal Notices