What State Society Executive Directors are Reporting

Source: Practical Accountant

Practical Accountant interviewed executive directors of state societies in the Northeast,  New England, North Central, Southeast, Midwest, Mountain States, and Southwest regions of the country about their views on conditions in the accounting profession. Not surprisingly, there is a great deal of consistency in their reports. 

Most executive directors said business was good and their member firms experienced excellent growth in 2004, many reporting more than double-digit growth. Five of the seven executive directors said Sarbanes-Oxley has been a strong contributor to growth, with one mentioning that the growth of regional firms is filtering down to the smaller firms. One executive director questioned whether the Sarbanes-Oxley boom will continue, since industry is working towards legislation to relieve the burden of SOX. 

Four executive directors said the biggest problem for firms is finding the right staff to do the work (especially those with 3 to 7 years experience). One reported the problem is more acute in smaller firms, and one said the problem is aggravated by staff migrating to industry. 

More income tax work was mentioned by three of the executive directors. Tax simplification is just not happening according to one of them. Another said that a combination of tax compliance with tax planning is accelerating growth in tax practices. 

Nonprofits is an area of growth. One executive director said nonprofits are beginning to think of themselves as quasi-public companies and, therefore, are considering adopting the new regulatory practices. This may create independence issues for firms with extensive not-for-profit practices. 

Two executive directors mentioned increases in consulting work. One reason is greater demand from clients. Businesses increasingly think of CPAs as having the skills to help them with the growth of their companies.

Other issues reported:

• Larger firms are increasingly focusing on business valuation, litigation support, and financial advisory services.
• Firms that increase their capabilities can grow even more than they have grown.
• There is a migration of clients away from the Big Four.
• Auditing may become less of a commodity service, especially in the not-for-profit area.
• Small firms are struggling with the need to develop skills in more than one niche area.

From Practical Accountant, April 2005. Following are direct links to these articles:

http://www.webcpa.com/article.cfm?articleid=12049&;pg=pracacc

http://www.webcpa.com/article.cfm?articleid=12052&;pg=pracacc

http://www.webcpa.com/article.cfm?articleid=12054&;pg=pracacc

http://www.webcpa.com/article.cfm?articleid=12056&;pg=pracacc

http://www.webcpa.com/article.cfm?articleid=12058&;pg=pracacc

http://www.webcpa.com/article.cfm?articleid=12059&;pg=pracacc

http://www.webcpa.com/article.cfm?articleid=12060&;pg=pracacc