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Hiring new graduates is essential … and risky

Published

9 months ago

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How many of you have heard this accounting joke before: “How do you spot an extroverted accountant? They’re the ones who look at your shoes instead of their own.”

Many of our friends laugh at us when we say we are in the business of hiring accounting graduates. After all, how hard can it be to hire “nerds” who don’t want social interaction, they think? Many of the hiring managers we work with are looking for more than just math and technical skills for the accounting graduates they recruit. AI is increasingly handling the repetitive number crunching that junior staffers used to do. More and more firms are looking for candidates (including recent grads) to have well-defined people skills they can develop to build client relationships, bring in new business and become firm leaders. Firms also want candidates to have critical reasoning skills and not just be “robots” who follow processes and procedures blindly without questioning or interpretation.Here are some of the other gaps and deficiencies they tell us they’re seeing among new graduates they hire: 

  1. They have good college grades, but when they come onboard, they are slow learners.
  2. They rush to make decisions based exclusively on data. They don’t look at the big picture to see if the decision is sensible.
  3. They can’t prioritize when confronted with multiple assignments and deadlines.
  4. They are afraid to ask questions when they’re unsure about something. 
  5. They are so insecure that they ask superiors for confirmation every few minutes.
  6. They want seniority and responsibility without putting in the effort to earn it.

With a talent shortage likely to face our profession for the foreseeable future, recent college accounting graduates are the most likely source of new hires. But many firms are also looking at older “second career” candidates — say former teachers and administrators — to fill the talent pipeline. Second-career candidates tend to be more patient and mature than recent grads, and they’re better attuned to how a professional office culture works. But with no relevant college grades to consider, and a longer and more expensive training program needed to get them up to speed, it’s even more important to ensure second-career candidates have the aptitude for the position you’re trying to fill. Otherwise, it’s going to be a miserable road for both parties … and potentially very costly. Our data shows that a bad hire costs a firm around 100% of the employee salary, but more than that, it creates stress for owners and the team, lowers morale and compromises delivery of client work. 

How to identify the best candidates (or at least know the caliber of those hired)

It comes down to two important attributes:

  • Are they critical thinkers?
  • Do they have a working style that matches the role?  

If you can check off both boxes with confidence, there’s a high probability that the candidate will work out.

There are a variety of ways firms have traditionally tried to measure these attributes including assessment centers, group planning exercises and presentations. But the easiest and most accurate method is to use science-based pre-hire testing — specifically critical reasoning tests and personality profiles.

Critical reasoning tests

Ability tests, like our firm’s Critical Reasoning Test, can help determine how the candidate thinks (i.e., reasons) and whether or not they’re a quick learner. For instance, the reasoning test helps quantify the degree to which the candidate can:

  • Make sense of data and transform numbers into useful insights;
  • Understand complex information and separate fact from noise; and,
  • Adapt to new ideas and grasp concepts outside their experience. 

Strong scores in the areas above, combined with good college grades, mean you’re on track for a good hire who is numerically literate and will learn fast. The table below can help. It outlines key questions that your team wants to be sure of, what a critical reasoning ability test will uncover, and the risks you face if an issue goes undetected. For a deeper dive, see Why Would I Use A Critical Reasoning Test On A Graduate?

What Your Accounting Managers Want to Know What the Test Checks The Risk if Shortcomings Are Not Identified
1. Can they learn accounting concepts quickly? Can the candidate infer rules, spot patterns? Slow up-take, rework
2. Can they reason with numbers — under pressure? Quantitative logic, interpretation of unfamiliar charts and tables Slow responses, weak analytics
3. How do they handle ambiguity or incomplete data? Forming hypotheses, weighing competing explanations, deciding with partial information Escalations where unnecessary, analysis paralysis 
4. Can they prioritize when everything is urgent? Weighing evidence and consequences,  distinguishing signals from noise Slow output, micromanagement required

Source: Accountests 2025

Personality profiles

Different firms look for different attributes, but in this age of AI, we need our accountants to be better communicators. It’s the personal connection and empathy that clients are willing to pay for more so than number crunching and filling in boxes. That’s where the “Big Five” personality traits — openness to experience, conscientiousness, extraversion, agreeableness and neuroticism — come in. The traits, often known by the acronym OCEAN, describe an individual’s behavior, emotions and thinking patterns, and are often used to predict life outcomes like job performance and well-being. Here’s more about Big Five Personality Traits.

Three of the five profile areas can be especially useful for evaluating recent graduates: 

  1. Do they have a client service orientation? (Agreeableness)
  2. Do they have resilience and can cope with stress? (Neuroticism)
  3. Do they cope well with change, and will embrace new technologies like AI? (Openness)
What you want as an employer Big Five trait(s) to focus on Issue if score is too low Issue if score is too high
1. Service orientation Agreeableness (warmth/affiliation/ trusting) Detached.  Poor at building relationships, resistant to teamwork Over-accommodating, gullible, avoids tough conversations with clients
2. Resilience and stress tolerance Neuroticism  (emotional stability/calmness) Easily flustered/can burn out/takes criticism personally Too laid back, underestimates risk
3. Ability to cope with change and embrace technology Openness (change focused/intellectual confidence) Resistant/clings to old methods/avoids learning Chases shiny tools while ignoring risks, over-implementation

Source: Accountests 2025

There are so many more areas that a Big Five profile can identify — just think of leadership potential, suitability to work remotely, ability to manage multiple projects, ability to sell, possession of ethics and drive.

A good personality profile will help you identify a candidate’s preferred working style.  It doesn’t tell you how they will work, as people can work against their preferences.  If you see challenges in a profile, your task during the interview is to dig down and see if the candidate recognizes them and how to deal with them.

Why would you take chances hiring a candidate who will not match your expectations? Getting hiring right every time is critical to the success of your firm. Use all the tools available to ensure your team is the best it can be.

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Accounting

Global ESG Reporting Standards and Double Materiality Compliance

Published

5 days ago

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August 9, 2026

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Corporate accounting departments face expanding reporting expectations as international sustainability disclosure standards achieve regulatory enforcement across major global jurisdictions. Chief Accounting Officers (CAOs) and corporate controllers are establishing rigorous internal accounting controls to treat Environmental, Social, and Governance (ESG) metrics with the same data precision, auditability, and governance as traditional financial statements.

Regulatory Harmonization Under Global Sustainability Frameworks
The implementation of standardized sustainability reporting frameworks—notably rules established by international sustainability accounting boards—has created unified expectations for public and large private enterprises. Corporations must report standardized metrics covering greenhouse gas emissions (Scope 1, 2, and material Scope 3), energy utilization, workforce demographics, and supply chain governance.

In Europe and other participating international jurisdictions, double materiality principles are mandatory. Under double materiality, organizations must report both how external sustainability risks impact corporate financial performance, and how internal corporate operations affect surrounding environmental and social structures.

Integrating Sustainability Metrics into Core ERP Systems
To provide auditable non-financial data, enterprise organizations are integrating specialized carbon accounting and ESG management platforms directly into core ERP systems. Automated data collectors capture energy utility invoices, logistics fuel consumption metrics, and vendor compliance records in real time.

Establishing automated, traceable data pipelines ensures that non-financial reporting is supported by clear audit trails. This structured approach allows external financial auditors to provide reasonable assurance on sustainability disclosures during annual corporate reporting cycles.

Financial Impacts and Capital Market Disclosure
Accurate ESG reporting directly influences corporate cost of capital and institutional credit ratings. Commercial lenders and institutional asset managers systematically incorporate sustainability metrics into risk pricing models. Companies that demonstrate transparent, verifiable progress in operational energy efficiency and climate risk mitigation benefit from expanded access to green bond markets and lower debt pricing.

Action Steps for Accounting Leadership
1. Implement Double Materiality Frameworks: Conduct comprehensive assessments to identify material financial and operational sustainability metrics.
2. Build Auditable Non-Financial Data Pipelines: Automate ESG data collection within core accounting software to ensure data integrity.
3. Align Sustainability with Annual Financial Filings: Prepare non-financial disclosures concurrently with financial statements to satisfy regulatory audit expectations.

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Accounting

Modernizing Internal Controls: Machine Learning and Continuous Monitoring in Auditing

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1 week ago

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August 5, 2026

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Internal audit departments and corporate risk managers are modernizing internal control frameworks by shifting from periodic sampling techniques to continuous monitoring and machine learning analytics. As operational data volumes increase across enterprise organizations, automated control testing ensures financial integrity, prevents corporate fraud, and streamlines annual audit engagements.

The Limitation of Periodic Audit Sampling
Historically, internal and external auditors evaluated internal controls by reviewing random samples of financial transactions—often analyzing less than five percent of total ledger entries. In complex enterprise environments, periodic sampling methods carry inherent risks of overlooking localized financial misstatements, unauthorized disbursements, or operational control breakdowns.

In 2026, progressive internal audit functions are utilizing automated continuous monitoring platforms that evaluate one hundred percent of financial transactions in real time. Continuous control auditing systems continuously monitor general ledger entries, procurement approvals, and expense reimbursements across all operating subsidiaries.

AI-Powered Fraud Detection and Anomaly Identification
Machine learning models trained on historical corporate financial data excel at identifying subtle transactional anomalies that indicate potential fraud or operational error. Automated systems instantly flag duplicate invoice payments, unapproved vendor creation, unusual journal entry timing, and unauthorized override of authority thresholds.

When an anomaly is detected, the automated auditing platform generates an instant risk alert, allowing internal audit teams to investigate root causes immediately. Early detection prevents minor operational errors from escalating into material weaknesses in financial reporting.

Streamlining External Audit Preparation
Continuous internal control monitoring delivers significant benefits during annual external financial audits. External audit firms can review continuous audit logs and automated control testing documentation, reducing the time required for manual field testing.

This integrated approach lowers overall audit compliance fees, reduces administrative burdens on corporate accounting staff, and provides senior management and audit committees with real-time visibility into the organization’s overall risk profile.

Core Implementation Guidelines
1. Transition to 100% Data Testing: Replace legacy sampling methods with automated continuous audit monitoring systems.
2. Deploy Anomaly Detection Algorithms: Implement machine learning models to identify unauthorized transactions and operational control overrides.
3. Align Internal and External Audit Workflows: Coordinate continuous control testing protocols with external auditors to optimize annual compliance cycles.

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Accounting

Automated Tax Compliance and Global Regulatory Harmonization in 2026

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1 week ago

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August 5, 2026

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Corporate tax accounting departments are navigating an era of unprecedented regulatory complexity as global tax harmonization frameworks take full effect alongside real-time digital tax reporting mandates. Tax directors and accounting teams are adopting cloud-based tax compliance automation tools to manage multi-jurisdictional tax liabilities and satisfy stringent reporting rules across international jurisdictions.

Implementation of Global Minimum Tax Provisions
The implementation of international tax reform agreements—notably the Pillar Two global minimum tax framework—has reshaped multinational corporate tax planning. Multinational enterprises with consolidated revenues exceeding established thresholds must ensure an effective tax rate of at least 15% across every jurisdiction in which they operate.

Accounting teams are implementing specialized tax calculation modules integrated directly into enterprise resource planning (ERP) platforms. These automated tools calculate effective tax rates per country, identify top-up tax liabilities, and generate standardized compliance documentation required by national tax authorities.

Real-Time Digital Invoicing and E-Reporting Mandates
Tax authorities across Europe, Latin America, and Asia-Pacific have enacted mandatory electronic invoicing (e-invoicing) and continuous transaction controls (CTC). Under these systems, corporate transaction data must be submitted electronically to government portals in real time at the point of sale or invoice issuance.

This shift toward continuous digital tax reporting eliminates traditional annual tax audits in favor of ongoing automated compliance monitoring. Accounting departments are upgrading invoicing software to ensure seamless XML data formatting, digital signature authentication, and real-time validation against tax authority databases.

Automation and Data Analytics in Corporate Tax Strategy
To keep pace with dynamic tax legislation, tax departments are transitioning from reactive compliance teams to proactive strategic advisors. Machine learning algorithms analyze corporate transactional data to identify tax credits, research and development (R&D) incentives, and cross-border transfer pricing adjustments.

By automating routine tax return filings and calculations, corporate tax directors can focus on long-term capital structuring, evaluating the tax implications of corporate mergers, and optimizing international supply chain networks.

Strategic Priorities for Tax Executives
1. ERP System Upgrades: Ensure enterprise software is capable of generating real-time, granular tax data required for global minimum tax compliance.
2. E-Invoicing Integration: Implement scalable e-invoicing platforms to satisfy regional continuous transaction control regulations.
3. Strategic Tax Analytics: Utilize predictive tax modeling tools to evaluate structural changes in corporate operations and cross-border trade.

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