Top CPA Financial Management Priorities in 2006

Survey points to business performance, recruiting efforts and treasury operations.

[From the AICPA Corporate Finance Insider]

Despite concerns about interest rates, energy prices and global political instability, nearly 60 percent of surveyed CPAs said they are more optimistic today than they were in 2005 about the economy in general and their own organization’s prospects in particular. However, the upward trend in perceived business conditions hasn’t made accounting professionals breathe any easier according to a recent Bay Street Group, LLC poll of readers of the AICPA’s CPA Insider? weekly e- newsletter.

When there’s a perceived talent shortage, heightened regulatory and compliance pressure and a corporate mandate to “do more with less,” CPAs working in finance positions told us they need more help and better metrics to measure their business processes, cost controls, compliance efforts and overall efficiency.

“We have squeezed about all we can from the current operating structure,” said the middle manager at a large oil and gas company, “so we will be looking to take on change for higher risk opportunities.”
“There are only three important drivers in my industry,” said the vice president of a large global financial services concern, “cost, growth and staying in business (aka compliance).” The CFO of a mid-size manufacturing concern agreed: “As our business environment and compliance requirements change, our priority list changes to maintain and improve performance.”

Here are the top 10 financial management must-do’s for CPAs this year according to our latest reader polls.

Top 10 Financial Management Priorities for CPAs in 2006
(percentage of surveyed CPAs who agree. Includes multiple responses)

1. Improving Department’s Organization/Performance 60%
2. Recruiting, Training & Retention 53%
3. Treasury Operations 37%
4. Forecasting and Budgeting 37%
5. Cash/Liquidity Management 31%
6. Payments Systems 31%
7. Mergers/Acquisitions/Restructuring 30%
8. Business Performance Management 30%
9. Strategic Planning 30%
10. Financial Accounting & Reporting 28%
(Source: Bay Street Group, LLC for AICPA, 2006)

CPAs in financial management roles are feeling the heat regardless of the size of their organizations. “The technology and strategic planning efforts are due to the need to stay competitive and the compliance and control related initiatives are due to the continuing Sarbanes-Oxley and related regulations,” related a vice president of internal audit for a large insurance company.

“SOX is taking its toll,” said the controller of a small telecommunications concern. “It’s affecting all areas of the company. We increase our internal controls, make sure they are working, employ internal auditors to make sure they are working and pay external auditors to make sure they are working.”

Drilling down into various sectors of the profession, we did notice that the top of the priority lists were somewhat different between CPAs in business and industry and those in public practice.

“It’s difficult to maintain focus in the current environment due to so many distractions and mounting regulatory and reporting requirements,” said a top exec at a mid-size financial services organization. “We must and will spend more time on big strategic issues.”

Top Priorities for CPAs in Public Practice
(percentage of surveyed CPAs who agree)

1. Recruiting, Training & Retention 70%
2. Improving Department’s Organization/Performance 47%
3. Forecasting & Budgeting 31%
4. Corporate Finance & Capital Structure 29%
5. Treasury Operations 27%
Source: Bay Street Group, LLC for AICPA, 2006

“Our department had high turnover in 2005 and now replacements must be trained and processes fine-tuned,” noted the controller for a mid-size public accounting firm in Madison, WI.

“Finding qualified staff is extremely difficult for the smaller local CPA firms such as ours,” said the partner, mid size public accounting firm. “This is the case even with outstanding benefits, good working conditions and good location.”

Across the board, CPAs in financial management positions are striving to move beyond the Sarbox learning curve and daily number crunching grind to take a more strategic view of their businesses. “After several years of rapid growth we need to examine how we function and improve our processes” said the managing partner of a mid-size real estate firm. “Also with a declining economy there will be new opportunities for us to grow.”

“SOX is going to live in 2006 for foreign entities,” said a VP of finance for a large pharmaceutical concern. “Pension funding is becoming a hot subject matter.”

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Hank Berkowitz and Sukanya Mitra of the AICPA contributed to this report.

[First published by the AICPA]

Posted on March 1, 2006