Key Takeaways

  • Ernst & Young announced it is doubling the bonus for early-career employees who pass all four sections of the Uniform CPA Examination within their first year of employment to $10,000, effective for those starting on or after June 1, according to a company website announcement.
  • The new bonus plan replaces the previous one, coming about two years after EY announced a $1 billion investment in compensation and technology to enhance the attractiveness of the accounting profession.
  • "To cultivate a vibrant and growing pipeline of future CPAs, EY is doubling its early certification bonus," Diana Kutz, EY Americas assurance talent leader, said in a statement to CFO Dive on Tuesday. She noted this is part of the firm's three-year, $1 billion plan to attract more talent to the accounting profession. "This program complements 360Careers, which is designed to help early-career employees explore different areas of the business and develop the leadership skills needed in a technology-driven, data-oriented world."

Deep Dive

Passing all sections of the CPA exam is one of three key requirements to become a certified public accountant, alongside meeting specific educational and experience requirements.

The bonus adjustment comes as the industry pushes to relax CPA licensing requirements, with more than half of states now offering alternative pathways or directly eliminating the long-standing licensure route, which required candidates to pass the exam and complete 150 college credits and one year of experience. Instead, many states are replacing the typically five-year higher education requirement with more work experience, offering alternative certification paths that require passing the exam and completing a bachelor's degree plus two years of experience.

Jack Castonguay, an accounting associate professor at Hofstra University in New York, praised EY on LinkedIn for offering the bonus, noting it equates to roughly a 12.5% bonus for most entry-level employees and will incentivize students to pass the exam. He also said via email that he has not yet seen other firms match the $10,000 bonus level, but believes they will follow suit soon, "otherwise they will be at a clear disadvantage in recruiting."

A PwC spokesperson said the firm has a "credential bonus award program" that offers eligible employees up to $5,000 for completing major credential exams such as the CPA within a specified timeframe early in their careers. PwC did not immediately respond to inquiries about whether it would consider raising its CPA exam pass bonus.

As for why EY is raising the bonus now, Castonguay believes the move may be triggered by a combination of licensing requirement changes and the proliferation of AI tools, which can now handle much of the audit and tax work previously performed by early- or junior-level employees.

First, he noted that firm data shows the further candidates are from graduation, the less likely they are to complete the CPA exam. "Since most states now offer licensure pathways requiring only a bachelor's degree, students will no longer be able to take the exam during a fifth year of school, so this incentivizes them to still attempt to pass the exam within a similar timeframe," he said.

Additionally, he said AI tools that can now handle a large volume of entry-level work make firms more focused on having newly hired employees obtain their licenses quickly so they can promptly take on higher-level responsibilities.

"Previously, the CPA wasn't as important to (accounting firms) because employees who didn't obtain the CPA would churn out over time," Castonguay said. "Now, they will have fewer employees who can advance to partner, and partners must hold a CPA to sign audit reports, so as new hiring numbers decline, the CPA will become more important for the employees they do hire."