“Never been a better time to be an accountant.” Really?
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by Rick Telberg
At Large
Buoyed by a strong job market for accounting skills, a Dow Jones Index piercing 12,000 and a few good economic indicators, most tax and accounting professionals appear cautiously optimistic about the business and economic outlook for the year ahead in 2007. Or should we say selectively optimistic?
“Continuing fee escalation at larger firms will encourage clients to seek more cost-effective alternatives for some less critical services — primarily compliance services and non-strategic consulting services,†says the leader of a mid-sized local CPA firm. “This makes my firm increasingly attractive to larger companies.â€To be sure, accountants remain conservative in their outlooks. But a solid two out of three in a preliminary canvass by Bay Street Group Research are reporting “good†to “excellent†confidence in the economic outlook. Entering the final quarter of 2006, CPAs’ economic outlook for the Year 2007 can be termed good and improving.
In addition, about 40 percent say they are more confident today than they were a few months ago, with the rest split about evenly between less confident and no change in their confidence levels.
“Unemployment is decreasing, inflation seems to be under control, productivity is increasing. And there is still room for more productivity improvements,†according to the owner of a small, local accounting firm. “The outlook is rosy. There has never been a better economy or a better time to be an accountant.â€
As in years past, CPAs are most confident about the things closest to home, the areas over which they know the most or have the most control. They are, for instance, most confident about the prospects for themselves, their families and their own businesses. And they are less confident about the economy in general or the outlook for their own clients and customers.
“SOX 404 continues to throw business my way, “ says CPA Neil D. Bass, owner of SmarTax LLC, a Flanders, N.J. firm that focuses on FAS 109 consulting for public companies, large and small. “There is an even greater need for FAS 109 expertise, as companies continue to struggle to get their tax provisions right and remain SOX-complaint at the same time.â€
“The nimble small tax consulting firms are positioned to grab market share and achieve unprecedented success,†Bass adds.
“I continue to anticipate an uptick in my consulting,†says Jack Henrie, president and chief executive of Executive Resources for Great Outcomes LLC, a Suffield, Conn. firm providing CEO decision-support and guidance to businesses of up to $100 million in annual revenues.
According to our soundings, CPAs are generally most optimistic about the environment for revenue growth and profits. But they are less optimistic about the climate for expansion, mergers and acquisitions and cost of goods.
“I expected the decline in residential real estate sales to provoke a more rapid effect both in terms of declining prices and slow-down in construction,†according to a senior finance executive at a company heavily invested in the defense industry. “I think long-term economic prospects are scary, but I don’t think the decline will be rapid.â€
Key problem areas going forward continue to be lack of available staff, affordable health insurance and government regulation. And worries over a housing bubble persist.
“Demand for the services I offer are down,†according to a senior partner, at a large accounting firm. In addition, among the local governments he serves as auditor, price pressure is narrowing margins, “yet auditing standards demand that we perform more testing.â€
He’s not the only one who says with a sigh: “Early retirement has become an alternative.â€
All of which suggests: Where you stand on the economic forecast depends largely on where you’re sitting…and what you feel you can control.
[First published by the AICPA]