Last August, accountant Crystal Moran moved to southern Florida from New Jersey where she worked for a small accounting firm. After three weeks of interviews, Moran received offers from three companies.
Ultimately, she accepted a package from Goldstein Schechter Price Lucas Horowitz & Co., a Coral Gables, Fla., firm.
“There were a lot of counteroffers,” Moran said. “The firms were very aggressive in compensation packages and benefits.”
The bean counters have arrived. After years of operating under the shadow of the legal and investment banking industries, the plain vanilla world of accounting suddenly has more sex appeal.
While high-profile corporate fraud cases such as the too-cozy relationship between Enron and Arthur Andersen, the accounting firm hired to review Enron’s books, at first gave the accounting industry a black eye, they also sparked new regulations that have increased demand for auditing services. That, in turn, has led to higher fees and more corporate clout for accountants and auditors.
As the industry basks in its newfound glory, auditors, accountants and certified public accountants nationwide are in short supply. It takes longer to find and hire them, and salaries in a number of specialties have moved up briskly.
Wanted: Good people
“The business is out there. The bigger issue is finding good people. We’re always looking for qualified people,” said Richard Preston, managing partner and a certified public accountant at a CPA firm on Miami Beach, Fla.
Much of the increased demand results from provisions of the Sarbanes-Oxley Act of 2002, which created tougher bookkeeping and watchdog standards for public companies. Corporate audits – for public and even private companies – have become more time-consuming and therefore more expensive.
As national accounting firms allocate more time and energy to larger audit clients, they are increasingly passing up assignments from smaller corporations. Cast-offs from these national firms are trickling down to regional and independent firms, who also have dramatically increased their fees and reshuffled their roster of clients.
Historically, auditors and CPAs were the wallflowers of the professional industries. While lawyers and investment bankers thrived during the IPO and dot-com investment parties of the 1980s and late 1990s, auditors and accountants earned far less than their Wall Street counterparts and enjoyed less status.
A newly minted lawyer, for example, could earn $60,000 to $80,000 a year in the world of corporate law, compared to a starting salary of about $32,000 for an accountant, according to Richard “Jody” Moore, partner at a recruitment and consulting firm in Fort Lauderdale, Fla.
Hollywood heightened the allure of the legal profession with such high-profile shows as LA Law, where lawyers were shown in expensive suits driving luxury cars with vanity plates.
“There was a flood of people going into law school and forgetting about accounting,” Moore said.
The dot-com boom also drained the pool of potential accounting talent. Straight out of college, computer science majors attracted annual salaries of $80,000 to $90,000 and those with glossy business plans were often instant or paper millionaires during the Internet boom.
In contrast, an accountant’s salary was less than attractive to young, ambitious job seekers. The number of students seeking accounting degrees dramatically declined.
Thank God for scandals
“It was viewed to be sexier to be a finance major going to Wall Street than a CPA auditing the books,” said Chuck Landes, director of auditing standards for the American Institute for Certified Public Accountants, a New York-based industry organization.
But during the 1990s, dramatic change was also under way in the accounting sector. Larger CPA firms – hoping to generate higher revenue – placed less importance on corporate audit assignments and greater emphasis on providing glamorous consulting services in such areas as information technology, project management, business valuations and other profitable niches.
The string of accounting scandals prompted lawmakers and regulators to create new layers of federal requirements and oversight under Sarbanes-Oxley, which was designed to promote public faith in the accuracy and integrity of corporate financial statements.
On several fronts, the new regulatory environment created business opportunities for smaller independent firms in South Florida and other regions of the country.
For example, in addition to preparing financial reports for federal regulators and public investors, CPAs are also creating internal audit procedures designed to prevent and detect rogue employees or fraudulent practices.
To enhance the integrity of audits, many companies have hired one team of auditors for external documentation and a second team to examine internal controls.
Some companies also have developed a rotating schedule of auditors, according to Darryl K. Sharpton and Anthony Brunson, principals at an independent CPA firm in Florida.
“Sarbanes-Oxley has opened doors for firms like Sharpton Brunson,” Sharpton said. “It’s not business as usual.”
Due to the industrywide hiring shortage and the increased workload related to Sarbanes-Oxley compliance, many national firms are eliminating smaller and less profitable clients in order to concentrate on audit assignments from Fortune 500 companies, according to principals at regional firms.
In a typical scenario, national firms – known as the Big Four – are cutting smaller corporate clients that pay annual audit fees of $100,000 or less.
Kaufman, Rossin, for example, has picked up such clients as Fort Lauderdale-based Midgard Group and Forward Industries, a Pompano Beach, Fla., public company that were formerly audited by a national CPA firm.
As a professional courtesy, national firms are passing smaller clients on to independent accounting firms through a referral network based on personal relationships and industry contacts.
Meanwhile, the industry’s imbalance between clients and staff may soon end. After a decline during the 1990s, enrollment in accounting programs has increased, according to national and local industry watchers.
Higher salaries and assorted bonuses have increased the allure of the profession for students, said Jerry Price of Goldstein Schechter Price Lucas Horowitz & Co.
And industry professionals expect that after years of glamorizing the legal and the investment professions, even Hollywood will soon turn its attention to CPAs.
“Now it’s becoming a little more sexier to be an auditor and to find fraud in companies,” said the Landes. “We need our own TV show to point out the great importance of the work that the CPA does.”
CPA: Miami, anyone?
Comments are no longer available on this story