|CPAs Battle a Tough Economy
What are CPAs doing to cope with recession? Join the survey; get the answers.
March 5, 2009
CPAs in corporate finance are bravely battling one of their most difficult busy seasons in memory.
At a time when they should be concerned with year-end closes, annual audits and developing next year's budgets, they are, instead, beset by crumbling revenues, rising costs and mind-boggling uncertainties.
In fact, the general economic situation is a top problem for 75 percent of the business-and-industry CPAs, according to my research for the AICPA. Tax code changes are running a distant second as a concern, followed by late K1s and 1099s and late-breaking changes in audit and accounting rules.
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"Less staff due to reduction in workforce," according to the CFO at a small company that builds resort properties, is making it harder to get all the required work done.
"The state of the economy, impending changes in tax laws and uncertainty about many things," according to the CFO at a company that manufactures packaging supplies and machinery, is making this busy season worse than last year's. If only, he wishes, "we could convince everyone to do more preparation for the year-end crunch in November and December."
At the same time, new auditing and accounting topics are emerging as a key issue for finance executives in this busy season. "There is an uncertainty about the future that was not present in past years," according to a CPA executive at a financial services company in Overland Park, Kan.
Indeed, according to the latest AICPA/UNC survey, chief financial officers and senior-level executive CPAs now believe that the U.S. economic downturn will last into 2010. Some 83 percent of respondents say they are "pessimistic" or "very pessimistic" about the U.S. economic outlook over the next 12 months. Some 60 percent expect decreased revenue and profits and more than 50 percent said that they expect the number of employees to decrease.
Companies are continuing to respond to economic conditions by cutting costs through layoffs, compensation limits and hiring freezes. The number of respondents who said their organizations were experiencing restrictions on credit or having difficulty obtaining credit remained stable at slightly more than 20 percent. Organizations experiencing problems with customer collections rose to 35 percent from 28 percent.
Capital spending freezes have been put in place at nearly half of the companies in the survey, and 43 percent have had layoffs. One glimmer of hope is that about a quarter of companies still expect some growth.
Still, working in business and industry has its plusses, when compared to public accounting, according to at least one of my survey respondents. "I work in a public company, and the work hours appear reasonable versus public accounting. In public accounting, I was working nearly 70 hours per week, and the workload never stopped or eased."
Hmm. It seems to me that, these days, busy might be better.
HOW ARE YOU HANDLING THIS BUSY SEASON? Join the survey, compare results with your peers.
Copyright © 2009 CPA Trendlines/BSG LLC. All Rights Reserved. Used by Permission. First published by the AICPA.
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