Dive Brief:
- Ernst & Young is doubling the bonus it gives early-career professionals on the certified public accounting track who pass all four parts of the Uniform Certified Public Accountant Examination in their first full year of employment at the Big Four firm, starting with “June 1 joiners,” according to a post on the company’s website.
- The new $10,000 bonus replaces the previous bonus plan and comes roughly two years after EY announced it would invest $1 billion in compensation and technology to improve the accounting profession’s “attractiveness."
- "To create a vibrant and growing pool of future CPAs, EY is doubling its bonus for early certification,” EY Americas Assurance Talent Leader Diana Kutz said in a statement sent to CFO Dive Tuesday, noting that it is part of the company’s three-year $1 billion initiative to attract more people to accounting. “It comes alongside 360Careers, an experience designed to help early career professionals explore different parts of our business and develop the skills needed to lead in a tech-enabled, data-driven world.”
Dive Insight:
Passing all parts of the CPA exam is one of the three key requirements potential candidates must complete to become a certified public accountant, with the other two being certain levels of education and experience.
The bonus comes as an industry push to ease CPA licensing requirements has gained momentum, with more than half of all states offering alternative paths or outright eliminating the long-standing licensing path that had required candidates to pass the exam and complete 150 hours of college credit hours, along with one year of experience. Instead, many states are now subbing more experience for what was typically five years of post secondary education, offering an alternative certification path requiring candidates to pass the exam and complete a bachelor’s plus two years of experience.
Jack Castonguay, an associate professor of accounting at Hofstra University in New York, applauded EY for offering the bonus, noting in a recent LinkedIn post that it will incentivize students to pass the exam given that it equates roughly to a 12.5% bonus for most entry level staff. He also said in an email that he hadn’t seen other firms matching the $10,000 bonus level, noting that he thinks they will do so soon or “otherwise they’ll be at a large recruiting disadvantage.”
A spokesperson for PwC said the firm has what it calls a “Credential Bonus Award Program,” which gives a bonus award of up to $5,000 for eligible employees who complete such primary credential exams as the CPA during the specified program timeline early in their career. PwC did not immediately respond to a request for comment as to whether the firm would consider increasing the bonus for passing the CPA.
As to why EY is bumping the bonus now, Castonguay said the action was likely triggered by the combined effect of both the changes in licensing along with the proliferation in artificial intelligence tools that can do much of the audit and tax work that was previously done by early career or younger staff.
First, he said firms have data showing that the farther a candidate is from graduation, the less likely they are to complete the CPA exam. “Now that most states are offering a pathway to licensure with an undergraduate degree only, students won’t be able to sit while they are still in school in their fifth year so this incentivizes them to still try and get the exam passed in a similar timeframe,” he said.
In addition, he said AI tools that are now able to do a lot of the entry-level work put a higher premium on staff they do hire getting licensed so they are able to quickly do higher-level work.
“Previously, the CPA wasn’t as important to [accounting firms] because those without a CPA would be lost to attrition over time,” Castonguay said. “Now they will have fewer staff to promote and ultimately become partners, which must have a CPA to sign off on audits, so the CPA for the staff they do hire will become more important as the number of new hires declines.”
