Annual Rosenberg Survey: CPA Firms Feel Recession’s Chill

Six-year culture of abundance ends with a thud, firms re-group, restructure and re-learn how to operate in a culture of recession.

via news release

The CPA profession opened 2008 on the heels of several years of extraordinary growth and profits, hopeful that the economic slowdown would not morph into a recession.  CPA firms ended the year with results most industries would have been happy with.  The full effect of the recession didn’t have a big impact on CPA firms in 2008 because by the time the economic woes surfaced in the 4th quarter, most firms’ revenues were collected, invoiced or booked.  Firms with annual net fees over $2 million (referred to as the “Over $2M Group”) posted the following 2008 results:

  • Annual net fee growth was 8.2%, down from 10.8% in 2007. This marks the end of a remarkable six-year run for the CPA profession, triggered by the scandals of Enron and others in 2002 and fueled by the multi-billion dollar market created by legislation that followed.
  • Average income per partner declined slightly to $365,000 compared to $369,000 the year before. But larger firms’ (over $10 million in annual fees) earnings were down 8% from 2007 due to a drop-off in Sarbanes-Oxley and internal audit work. However, medium sized firms’ ($2-10 million) profits were up almost 1%.

Changes hit the CPA profession like a ton of bricks

Rosenberg

Rosenberg

“The CPA profession had a great run for these past six years,” said Marc Rosenberg, creator of The Rosenberg Survey. “The post-Enron climate created a huge surge in demand for CPA firm services, allowing firms to virtually become order takers.  Throttled by a historically low supply of experienced staff, partners worked harder than ever before, and the benefits showed up in their paychecks:  income per partner rose 50% since 2003.”

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Recession Adds to Workloads, Stress; Sends CPAs Looking for New Jobs

Almost half of all CPAs say they’d quit for a job with better working conditions — even if it means a pay cut — even in this economy.

How hard are YOU working? Join the survey, compare the answers. And then add your comments here.

by Rick Telberg
At Large

While the CPA profession is proving remarkably recession-resistant, the worst business downturn since the Great Depression is nevertheless taking a toll.

To be sure, a number of firms and finance organizations have been forced into painful layoffs, although the latest jobs report from the U.S. Bureau of Labor Statistics shows a net seasonally adjusted 4,000-job increase from June to July at accounting and bookkeeping services, bringing the industry workforce to about 940,300. Still, that’s down from a year-ago July, when the BLS reported 947,500 jobs in the industry.

Despite the recession or because of it, the CPA profession is attracting unprecedented interest from college students. The AICPA reported a couple weeks ago that the number of students graduating with a bachelor’s or a post-grad degree in accounting rose 3.5 percent to more than 66,000 in 2008 – a new record. To be sure, the students chose their majors long before the recession became official, but after signs of economic uncertainty began. And there are now 213,000 more in the pipeline.

How hard are YOU working?

Join the survey; get the comparisons.

(Free. Confidential.)

But the stresses and burdens of the recession on CPA workplaces are beginning to show. An increasing number of CPAs are telling me that they are working longer hours and enjoying it less. At the first sign of a recovery, the most talented and in-demand professionals could jump to a better job.

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