Big 4 accounting firm pulls plug on DEI quotas

The second-largest accounting firm in the U.S. decided to revamp its hiring policies rather than face class-action lawsuits or an investigation by the Equal Employment Opportunity Commission. This is just the latest example of a private-sector company adjusting in response to the Supreme Court ruling against Harvard University last year.

PricewaterhouseCoopers (PwC), one of the vaunted Big 4 accounting firms, is eliminating diversity, equity and inclusion (DEI) targets for its internship and scholarship programs. The company will also drop a commitment to earmark at least 40% of its procurement budget toward minority-owned suppliers.

America First Legal (AFL) sent a cease-and-desist letter to PwC in recent weeks warning of future litigation against it unless it ended its racial quotas. AFL described PwC as “one of the worst offenders when it comes to implementing racially discriminatory practices.”

Changes at PwC will include “ending race-based eligibility criteria for a student internship program and for scholarships to help candidates prepare for professional accounting exams, two initiatives that were designed to increase the diversity of the firm’s employee base,” according to the Financial Times. PwC reported it hired 3,500 people in fiscal year (FY) 2023, of whom “56% were racially/ethnically diverse.”

The percentage of white new hires at PwC dropped from 58% in FY 2021 to 51% in 2023. Many students say the costs of going to college and sitting for the certified public accountant exam are too high, leading to an exodus from the profession.

Big companies under pressure to drop quotas

Don’t be surprised if the other members of the Big 4 scale back their diversity initiatives. All of the firms – Deloitte, Ernst & Young and KPMG – are strongly committed to DEI practices in recruitment and hiring.

The Big 4 handle roughly 80% of audits of private companies. They’re also a training ground for accountants, accounting managers and related financial professionals. Deloitte and PwC each employ more than 45,000 people. Deloitte created an in-house university in 2012 to train employees.

Salaries for entry-level CPAs can vary by state but tend to top out at $90K annually. Meanwhile the average college graduate racks up $37K in student loan debt.