Accounting
How to make career choices as a young accountant
Young accountants have never had so many options.
Historically, being an accountant often involved little personal agency — most young accountants followed the career path laid before them by their firm, and that path looked much the same from firm to firm. But now with advancing technology propelling the profession forward, new service lines multiplying almost daily, and a labor shortage putting young talent in high demand, new career pathways and opportunities are opening.
The decisions start with picking a firm size and focus area, and continue throughout the career, from committing to the partner path, to going corporate or staying in public accounting, or even starting their own practices. Experts say young accountants should navigate this evolving profession by continually reevaluating their path with an open mind.
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Picking a firm
As firms start shifting their recruiting focus to younger students, sometimes even extending
There are benefits and downsides to each. At small firms, young accountants can become jacks of all trades, have more opportunities to demonstrate entrepreneurship and the opportunity to work with clients faster. Meanwhile, big firms offer prestige, specialization, big-name clients, the opportunity to travel and connections. Many students choose the latter route and aim for one of the Big Four: Deloitte, PricewaterhouseCoopers, Ernst & Young or KPMG.
Jeff Phillips, CEO at Padgett Business Services and cofounder of recruiting firm Accountingfly, thinks the narrative that students receive in school too often skims over the benefits of working in small and midsized firms.
“Don’t buy into the myth that you must start your career at the Big Four,” he said. “They are excellent companies, but there are awesome firms in the Top 200. There are awesome local firms.”
The stereotype is a young accountant starts working in a big firm, grows tired of the grueling hours, and eventually leaves for the
But some experts warn that starting in a small firm may limit career mobility down the line.
“It’s always easier to go from big to small. It’s harder to go from smaller to big,” said Stan Veliotis, associate professor at Fordham University. “Both are possible, but it’s easier in one direction versus the other.”
He said that students risk giving the impression to future employers that they couldn’t get an offer from the big firms — not that they didn’t want to work there.
But Douglas Slaybaugh, a CPA career coach, disagreed: “I’ve seen it go both ways. I’ve got a client right now that’s moving from a smaller firm to a big firm. And there is such a need for resources in the industry right now that if that was ever a thing, it’s less of a thing now.”
Choosing a focus area
It’s difficult choosing a focus area—between tax, audit and accounting, or one of the new possibilities that are cropping—before having actually worked in a firm. Many students may feel they’re sealing their fates with the choice, but the reality is that they can always switch down the line. The best course of action is to just jump.
“Don’t worry too much about a focus area,” Veliotis said. “As long as you have some interest in it, take it, and then you will see over time what you gravitate towards.”
Slaybaugh encourages students to use internships and firm college programs to get a taste of the profession. “Start early and try lots of things,” he said. “You have to start, but you’re never stuck.”
How long to stay
The next question is how long to stay at your first firm. Traditionally, an accountant’s entire career would play out within a single firm — joining as an intern and climbing the ranks until they make partner.
Today, Veliotis says it’s easier for young accountants to leave their firm now that applying for a job can be as easy as clicking a button online. In the past, joining a new firm meant being headhunted or actually running from office to office looking. He recommends staying at least one year in a firm — ideally several years, but never less than one.
“One year is a magical number,” Veliotis said. “In accounting, almost all the disciplines in the accounting firms, all the client engagements, are cyclical, meaning every year, the year finishes and now you have to prepare the tax return, or now you have to prepare the audit or the financial statements. So if a person leaves within a year, it almost looks like something blew up or they couldn’t handle the second cycle.”
Remember, Veliotis said, firms are always taking a risk on young talent — they don’t know how much you know out of college. That’s why it’s important to at least get the first promotion.
From there on, Phillips suggests that accountants reassess their career every three to four years.
“As long as they’re pretty happy with the firm, stay until they’re around a manager level. Your options expand exponentially the longer you stay at that first employer,” he said. “As someone with a recruiting background, we don’t like to see candidates who have changed jobs every 18 months — we just feel like you’re going to change jobs in 18 months on us. So I think there’s a lot of wisdom in sticking something out for a chunk of time to learn how to exist in a firm.”
Slaybaugh thinks accountants should be reassessing more frequently: “Every year, once a year, you should decide whether you’re going to stay in the job you’re in or not. What that does is it removes planned continuation bias, in that we decide we’re going to be accountants based on the circumstances in which we made the decision. Well, times change. Circumstances change.”
Getting your CPA
Most experts agree that getting licensed as a CPA is still important. It provides more career mobility and is a symbol of trust and reliability. But do you really need your CPA?
Slaybaugh says it “depends on the day.” Some non-audit managers and partners don’t have their CPA, so it’s certainly possible to get promoted without it.
“The importance of it still exists. It’s still an important aspect of our society to be able to have that trust in the profession,” Slaybaugh said. He added that getting an MBA plus a CPA can help you become a CFO.
Committing to the partner path
The path to partner, which takes 10 to 20 years on average, is daunting. Luckily, even if an accountant jumps ship before they make partner, at least they’ve gained highly-sought-after experience.
“If you work until you’re about to become a partner and you decide that’s not for you, you have many options available to you, because every company in the world wants to hire somebody with that skillset,” Phillips said.
Experts also recommend interviewing your partners to investigate if the career is right for you. What would they do differently? What do they like and dislike about being a partner? What is the lifestyle like? What are the hours like?
Slaybaugh says if the partner path is for you, you should be yourself from the beginning. For example, don’t pretend you enjoy a niche more than you do, or commit to more hours than you’re actually willing to.
“It’s best to have consistency. Be yourself,” Slaybaugh said. “This has nothing to do with developing as a professional or becoming a better leader; this is about doing things that are against your core values or not resonating with your core values.”
Going corporate
It’s common for accountants to make the move from public accounting to corporate or industry accounting. Often they enter the industry their clients were in, Veliotis said.
“When you make the jump from an accounting firm—where you have a lot of diversified experiences, you’re learning about best practices, you have the stress of client delivery—and you go in-house, you’re very, very powerful on a resume because you know the area,” Veliotis said. “You proved yourself in the most stressful environment there is, which is serving many clients. And then you go to one company, in essence, you just have the one client.”
For those aiming to be a CFO, Slaybaugh recommends staying longer in public accounting to gain more experience. He also noted that you’ll likely experience an immediate pay bump going corporate, but said the salary will eventually be outpaced by what you could’ve made as a partner.
Joining up
Joining professional associations, like the American Institute of CPAs, the National Conference of CPA Practitioners or the National Association of Black Accountants, or state CPA societies, can be an excellent way to practice networking and communication skills. (Communication is an
But while many of these organizations offer virtual meetings, Veliotis encourages young people to go in person for the full benefits and resources.
Owning your own firm
For some accountants, starting your own practice may be the dream, but no one actually teaches how to start a firm.
“If you’re entrepreneurial, the skillsets you’re going to need are that technical knowledge that you probably will not learn in college — you will probably learn working inside of a company,” Phillips said.
The most important soft skills for running a successful firm are a high degree of responsibility and ownership. “It starts and ends with you,” Phillips said.
It’s a great time to start an accounting firm, he added. Demand for services is growing, the economy is growing, there are more niches than ever, and firms that are scaling and shaking loose clients can be grabbed by an entrepreneur.
If you learned nothing else
What remains true for all young accountants — no matter what path they find themselves on, whether they become partners or quit their firms to start their own practices — the most important thing is remaining proactive about making their own choices because the profession will no longer do it for them.
Enjoy complimentary access to top ideas and insights — selected by our editors.
Talent acquisition and retention is a growing challenge in the accounting profession. Despite
To start, average starting salaries for those with accounting majors fall short of those offered to business majors and applicants in the technology and finance sectors.
Data from
“The industry as a whole is not attractive to the younger population, and it’s difficult for our staff to work remotely,” Paul Miller, a CPA and managing partner at
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Wage disparities are only one piece of the puzzle, however.
Leaders of
Shagun Malhotra, CEO and founder of Skystem, told Accounting Today last month that modifying accounting education and certifications to include a greater focus on technology “could make the profession more appealing and relevant to a younger, broader set of professionals,” she said.
“The focus needs to shift from routine compliance tasks to strategic, technology-driven roles that still add value to the business without wasting time on [un]necessary tasks,” Malhotra said.
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AI adoption will only continue to grow as regulators become more knowledgeable and comfortable with the technology, which executives hope will ease the workload for accountants across the profession and, in turn, reduce turnover.
“We’ve asked tax and accounting professionals to do too much with too few resources for too long. … The burnout shows through high attrition rates and professionals committing highly visible errors,” said Elizabeth Beastrom, president of Thomson Reuters Tax & Accounting.
Read on for a look at the top talent struggles hitting firms across the U.S. and expert commentary on what factors are underpinning this trend.
Five of the most important organizations in the planning profession are pushing for lawmakers to restore tax incentives for financial advice ahead of a massive potential deadline next year.
In
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The letter represents an area of agreement among wealth management trade and professional organizations that have split in other policy debates — such as
Repeal of “a limited tax deduction for investment advice” as part of the law essentially raised the “cost of financial advice crucial to Main Street investors saving for retirement, college and other important life events such as home purchases,” according to Erin Koeppel, the managing director of government relations and public policy counsel of
“Congress and the new administration will have the opportunity to restore and expand tax incentives to make financial advice more accessible to everyday Americans,” she said in a statement. “Tax credits or other subsidies aimed at moderate-income individuals would encourage these investors to seek professional financial advice, which, in turn, will improve financial outcomes. This ultimately will allow a broader range of Americans to access financial advice for major financial milestones and everyday needs.”
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However, the earlier deduction and other “miscellaneous” items eliminated by the Tax Cuts and Jobs Act added up to roughly $32 billion worth of revenue in the first 10 years of the legislation, according to Garrett Watson, a senior policy analyst and modeling manager at the nonprofit, nonpartisan
“I have not seen any specific evidence suggesting that the repeal of this deduction led to a decline in Americans seeking financial advice or if it noticeably impacted the prices for those services,” he said. “The AGI floor means that a portion of those services were not impacted at all, and taxpayers received tax breaks elsewhere that would offset (or more than offset) this tax increase in insolation.”
In their letter, the organizations argued that the earlier tax incentives “may have appeared inconsequential” at the time of the 2017 law, but the COVID-19 pandemic and accompanying economic volatility demonstrated the importance of “having access to affordable, professional advice from trusted financial professionals.”
“As Congress considers extending the expiring provisions of the TCJA, we ask that Congress restore and expand tax incentives for financial advice, including financial planning,” the organizations wrote in the Sept. 16 letter. “Such tax incentives may include deductions, credits, or a combination thereof. Further, Congress should ensure that these incentives are responsive to the needs of Main Street Americans. All taxpayers need help to obtain the critical financial advice they need now, and any tax incentives should be widely available to American households.”
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They
“The challenge heading into next year is every specific tax deduction, credit or other expenditure has a specific use-case and set of folks who argue that they should be retained, but this comes at the cost of greater complexity in our tax code and higher tax rates,” Watson said. “If anything, we may need to further base broadening efforts to ensure the fiscal situation improves federally, and that would include retaining the progress policymakers made on base broadening in 2017. This can help keep tax rates lower, which is helpful for taxpayers and American families across the country.”
The Securities and Exchange Commission has been constantly revising its stance on how public companies should report their climate impact.
These ongoing changes are keeping auditors, companies and investors confused. After proposing ambitious rules in 2022, the SEC adopted a scaled-back version in 2024. The new rules are set forth in
Both progress and setbacks have marked the SEC’s journey toward finalizing climate disclosure rules. While the initial proposal aimed to require extensive climate-related disclosures, the final rules ultimately focused on critical areas like Scope 1 and 2 emissions, financial statement disclosures, and board oversight. However, even these revised rules have faced significant opposition.
How are the 2022 proposed rules different from the final rules?
One of the most contentious areas was the treatment of Scope 3 emissions. The 2022 proposal would have required public companies to disclose Scope 3 emissions, representing indirect emissions from upstream and downstream activities. This included emissions associated with a company’s supply chain, transportation and other value chain activities.
In a significant departure from the original proposal, the SEC eliminated the Scope 3 emissions disclosure requirement in the final rules. This decision was met with praise and criticism, with opponents arguing that Scope 3 emissions are critical to a company’s overall carbon footprint.
Other significant changes include the following:
- Scope 1 and 2 emissions: While the requirement for Scope 1 and 2 emissions (direct and indirect emissions from purchased electricity) remained, it was limited to larger companies (accelerated and large accelerated filers) and only if the emissions were deemed “material.”
- Financial statement disclosures: The proposed requirement to disclose the impact of climate-related risks on financial statements was removed from the final rules.
- Board oversight: The SEC also eliminated requirements for disclosing board members’ climate-related experience and specific climate responsibilities.
- Flexibility: The final rules provide more flexibility regarding where and how companies present their climate-related disclosures.
Why did the SEC make the changes?
The SEC’s decision to scale back the initial proposal was likely influenced by a combination of factors, including:
- Complexity: Scope 3 emissions can be complex to measure and report, and some companies may have faced challenges in collecting and analyzing this data.
- Legal challenges: The SEC may have anticipated legal challenges to the Scope 3 emissions requirement and removed it to avoid potential regulatory uncertainty.
- Economic impacts: Some critics argued that requiring Scope 3 emissions disclosure could impose significant costs on businesses, particularly smaller companies.
While the final rules represent a compromise between the SEC’s initial ambitions and the concerns of various stakeholders, the issue of climate-related disclosures remains a complex and controversial topic. Ongoing legal challenges and continued uncertainty persist.
Legal battles and regulatory uncertainty
Almost immediately after the final rules were adopted, various groups, including businesses, conservative organizations and environmental activists, challenged them in court. In response, the SEC unexpectedly voluntarily paused the implementation of the rules while legal proceedings were ongoing. This decision has created a period of uncertainty for auditors and their clients.
On April 4, 2024, the
Legal challenges
Multiple lawsuits have been filed challenging the SEC’s final climate rules. Business interests and conservative groups have filed challenges in various federal appellate courts. Republican attorneys general have also filed legal challenges. Environmental groups like the Sierra Club have sued, arguing the rules are too weak. These cases have been consolidated and are now pending review in the U.S. Court of Appeals for the Eighth Circuit.
SEC’s current position
Despite issuing the stay, the SEC maintains that the climate rules are consistent with applicable law and within its authority. The agency has stated that it will “continue vigorously defending” the validity of the rules in court and reiterated that its existing 2010 climate disclosure guidance remains in effect.
Where we are today
While the stay is in effect, companies subject to SEC regulations will not be required to comply with the new climate disclosure rules. However, many experts advise companies to continue their preparatory efforts, albeit on a less accelerated timeline, given the ongoing investor interest in climate-related disclosures and the potential for the rules to be upheld in court.
What does this all mean for auditors and their clients?
The evolving regulatory landscape has several implications for auditors and the companies they serve:
- Increased scrutiny of ESG claims: Even without mandatory disclosures, the SEC remains vigilant against false or misleading ESG claims. Auditors must be diligent in reviewing sustainability reports and other ESG-related communications.
- Focus on internal controls: Companies should have strong internal controls to support their ESG disclosures. Auditors may need to assess these controls for their overall audit planning.
- Preparation for potential implementation: While the SEC rules are currently on hold, companies should continue to prepare for their potential implementation. Auditors can play a valuable role in helping clients through this period of uncertainty.
The road ahead
The future of climate-related disclosures remains uncertain, but this issue will remain a significant focus for regulators, investors, the courts and the public. Auditors must stay prepared to adapt their practices to meet the needs of their clients during this period of uncertainty and beyond.
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