Big Four Diverge on Diversity as Culture War Hits Accounting (1)
The Big Four accounting firms often mirror each other in everything from technology investment to recruiting strategies. Diversity has divided them.
The US firms’ nearly 5-year-old DEI commitments were a key strategy to broaden their recruiting pool as they grappled with plunging graduation rates and an aging workforce. The supply of accounting graduates has steadily declined since 2016, prompting states to reform CPA licensing requirements that had disproportionately discouraged minority candidates.
But pressure from the White House and a Supreme Court ruling on affirmative action have forced top firms along with much of corporate America to weigh whether to unwind their policies. The firms risk Justice Department investigations if they keep their programs or alienating staff and future recruits if they drop them.
“They are facing a very difficult political and legal environment,” said Henock Louis, who chairs the accounting department at Penn State University.
KPMG, which plans to re-evaluate any programs related to its now-retired talent strategy dubbed “Accelerate 2025,” will “fully comply with all applicable laws and regulations, including adherence to the executive orders affecting us as a federal contractor,” the US firm’s CEO Paul Knopp told staff in a Feb. 14 statement seen by Bloomberg Tax. “We also remain unwavering in our commitment to fairness and inclusivity.”
That new posture echoes an ideal that KPMG and the broader profession have long struggled to meet.
Accounting firms can’t afford to walk away from DEI, said Anton Lewis, an associate accounting professor at Governors State University. Such a move signals to “would-be accountants of difference that you’re not welcome here.”
Diversity Dilemma
The Big Four firms, who count the largest companies in the world as clients, have set ambitious goals to promote more women and minorities into managerial and partner roles since 2020.
Those efforts were aimed partly at attracting a broader pool of prospective accountants by establishing a more visible and diverse group of future mentors and trailblazers.
Nikki Winston, a CPA exam coach and managing partner of the Winston CPA Group, said she will be watching how unraveling DEI will alter the career decisions of Black and other minority staff and future accountants. Professionals will have to decide whether they still want to work for the firms or take their skills and talents elsewhere, she said.
“Am I going to be like a token Black or Brown person who is under some microscope or treated differently just because I don’t really fit into the realm of what their workforce should look like,” Winston said.
Deloitte, the largest US accounting firm with the most lucrative federal contracting business among the Big Four, will no longer track progress against its once-public goals as it sunsets its DEI efforts, the firm confirmed. Deloitte declined to comment further.
In its latest DEI report issued a year ago, Deloitte said that it was on track to meet many of its goals including boosting the proportion of women and ethnic minorities promoted to partner. Still, less than 3% of its partners, principals and managing directors were Black in 2023 and less than one-third were women.
KPMG, which brought in $503 million as a federal contractor in fiscal year 2024, detailed similar figures for its partner and managing director ranks in a report last spring. The firm, which declined to comment, also swapped its DEI webpage for one on careers and culture last week.
It will end its use of “metric-based aspirations” that relied on protected categories including race and gender, a person familiar with the firm’s thinking said.
About Face
The unraveling of DEI after years of emphasis came abruptly at Deloitte and KPMG.
In January, KPMG’s Knopp said in a LinkedIn post that the firm was committed to “gender equity, to the growth and development of all our people at every level of our business, and to fostering a workplace where everyone feels valued and respected.”
Deloitte, which collected $4 billion from federal contracts last fiscal year, posted profiles of staff discussing empathy and inclusive leadership on its website in January.
Deloitte devoted $75 million to diversifying the ranks of its accounting hires through a program called Making Accounting Diverse and Equitable—a link for the program was still active as of Thursday. The firm’s US Chair Lara Abrash once championed the efforts, which included a $30 million pledge to help Black and Hispanic students pay for the extra year of college required to qualify for the CPA license.
EY, a government supplier that collected $638 million in related fees last fiscal year, still maintains webpages dedicated to DEI and reports tracking progress. The firm did not respond to requests for comment.
“Black history is American History,” Ernst & Young said in a social media post earlier this month to celebrate Black History Month. “We celebrate the diverse experiences within the Black community and their contribution to a shared powerful legacy.”
PwC’s one-time-diversity site focuses on inclusion with some isolated references to diversity. The firm, which doesn’t have a federal contracts service, declined to discuss the status of its diversity efforts.
Last year, PwC eliminated diversity criteria for an internship program after a conservative activist group targeted the firm. America First Legal asked the Equal Employment Opportunity Commission to investigate the firm following the Supreme Court decision that ended affirmative action in university admissions.
Beyond the talent shortage, broken promises on inclusive hiring could undermine the firms’ main sales pitch: trust and ethics, said Lewis, the Governors State professor.
“They should take a stand,” he said. “Our profession is about trust and none of the work we do can be done if we can’t be trusted.”
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