The latest Business and Industry Economic Outlook survey from the American Institute of Certified Public Accountants (AICPA) indicates that certified public accountants (CPAs) in the C-suites of corporate America are increasingly pessimistic. While 54 percent of respondents’ opinions on the economy range from neutral to very pessimistic, up 13 percentage points since the last survey was conducted in December 2005, 68 percent remain confident about the prospects for their own companies.
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“The lack of enthusiasm for the state of the economy among these CPA executives seems to mirror that of consumers in general,” said John Morrow, AICPA Vice President for members in business and industry. “According to a Conference Board survey, consumer confidence in the economy sank to a nine-month low in August.”
As in the December survey, respondents identified costs associated with employee, energy, material and supplies as the issues they are most concerned about. Perhaps this is why only 39 percent of those surveyed are planning to increase their workforces, down from December’s 45 percent. Among the largest companies, those with more than $1 billion in annual revenues, 21 percent of those surveyed anticipate workforce reductions in the second half of 2006, compared with 17 percent in December. Further, fewer companies, particularly those having more than $100 million in annual revenues, expect increased growth from the U.S. sector.
CPAs also continue to be concerned about the impact changes in short-term interest rates will have on inflation, with 75 percent of the entire sample saying they were more worried about the impact on inflation than on the impact on economic growth.
A total of 2,571 CPAs participated in the survey, which was conducted in June. Most respondents, 1,324, serve as chief financial officers (CFOs); 456 are controllers; and 234 are chief executive officers (CEOs). The remaining 557 include chief operating officers (COOs), chief information officers (CIOs), chief accounting officers (CAOs) and managers. Among the respondents, 48 percent of respondents work for companies with annual revenues between $10 million and $100 million and 11 percent work for companies with revenues exceeding $1 billion. The majority, 60 percent, work for privately held companies.