Accountants Reaping the Benefit of Corporate Reform
With fewer and fewer accountants graduating each year, the firms are desperate to attract experienced accountants to handle Sarbanes-Oxley Act work, the Wall Street Journal reported.
Citing figures from the American Institute of Certified Public Accountants, the Journal reported that more than a decade ago, accounting began losing popularity with undergraduate students. In 1991, about 60,000 students graduated with degrees in accounting. By 1999, that figure had fallen to 45,000. There was an 11 percent upswing from 2002 to 2003 when those earning accounting degrees jumped to 49,665.
Many of the smaller firms are benefiting from the law's requirement that audit and consulting services be done by separate accounting firms, causing many of the nation's largest firms to shed clients in one area or the other-usually in the less lucrative audit side. Medium- and smaller-sized firms are happy to pick up the scraps.
"We would hire every person we could who is experienced enough to tackle work on Sarbanes-Oxley 404," Thomas Murphy, national director of human resources at BDO Seidman LLP, an assurance, tax, financial-advisory and consulting-services firm based in New York, told the Journal. BDO's staff has grown by 5 percent in the past two years.
Section 404 requires companies to set up sound internal controls and to verify the effectiveness of the controls through an external audit.
The need is so great that firms are not above stealing talent from other companies.
"People keep one-upping each other, going to experienced people with bigger salaries and other perks," Lorraine Hack, executive director of the financial officer practice at Russell Reynolds Inc., a New York executive-recruiting firm, told the Journal. "Companies are bending over backwards not just to hire new people but to try and keep the ones they have, offering them flextime schedules and other benefits."
"We beg, we borrow, we steal, we grovel, we scour the world" to find accountants with five-plus years of experience in public accounting, Mark Friedman, New York-based managing director and head of U.S. experienced recruitment at PricewaterhouseCoopers, told the Journal. The firm is hiring at 30 percent above last year's levels.
Salary is also on the rise, as much as 10 percent or more, with a junior partner with 10 to 12 years of experience earning $500,000 in base pay, according to a recruiter. Seasoned team leaders can earn as much a 20 percent more than last year.
"We have hundreds of open positions," Monique Brannon, national director at Chicago-based Grant Thornton LLP, one of the large accounting firms that has benefited from a flurry of new business from former clients of the Big Four, told the Journal.