Accountants Give Back Too
Vickie Cox Edmondson
MAY 2008 - Many
reasons have been given for the underrepresentation of blacks in
the accounting profession. A study by Kevin James (see “Achieving
a More Diverse Profession: Understanding African-American Students’
Perceptions of Accounting,” The CPA Journal, November
2006) discussed some of the erroneous perceptions held by black
high-school students regarding why they would not choose to pursue
accounting as a career if the opportunity exists:
have a very narrow perception of what accountants do;
believe accounting provides relatively little opportunity to
make a contribution to society; and
do not see an opportunity to give back to their communities.
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.
practical steps that accounting professionals could create to
help correct these misconceptions:
- Get involved
in organizations that serve high-achieving students of color;
internship opportunities to high-achieving students of color;
contacts at historically black colleges and universities (HBCU);
involved in communities with significant populations of color.
James highlighted efforts of the National Association of Black
Accountants (NABA) and the Inroads organization, and he encouraged
participation in these and similar programs.
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.
Opportunities and Challenges
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.
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.
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.
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.
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.
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.
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
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.
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
Doing Well By Doing Good
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.
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.
Expertise for Success
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.
Cox Edmondson, PhD, is an associate professor of management
at the University of Alabama at Birmingham. She has also served
as the executive director of the Follow Me Foundation since 1998.