CPA business executives worried about coronavirus
CPAs who are also business executives are concerned about the potential global fallout from the coronavirus outbreak, although their outlook on the U.S. economy has risen in recent months, according to a new survey by the American Institute of CPAs.
The first-quarter AICPA Economic Outlook Survey found that 61 percent of respondents indicated optimism about the U.S. economy’s overall outlook over the next 12 months, up from 50 percent in the fourth quarter. But responses in the final week of the survey, after dramatic stock market declines following news of the coronavirus’ spread, were much more pessimistic.
Most CPA business executives said they haven’t yet seen an impact from coronavirus, although 21 percent reported at least a slight impact. Those affected said they had seen some combination of supply chain interruptions (10 percent), factory shutdowns in China or other affected regions (7 percent), and decreased sales to China (5 percent) or other markets (3 percent). The survey polls chief executive officers, chief financial officers, controllers and other CPAs in U.S. companies who hold executive and senior management accounting roles.
Seven percent of the CPA business executives polled said their companies have made a minor downward adjustment to their profit and revenue forecasts due to virus concerns, while 51 percent indicated they have made no change but are monitoring the situation closely. Forty-two percent said they don’t anticipate having to make any coronavirus-related adjustments, but again responses late in the survey cycle showed much less confidence.
Fourteen percent of survey respondents said their businesses have imposed travel restrictions to China or other regions affected by coronavirus. Four percent said they have shifted some of their supply chain sourcing.
“We are seeing a reversal of a downward trend over the last four quarters with the current survey’s key indicators showing considerable strength, especially around expected growth in revenue and profit supported by high employment and low inflation,” said Ash Noah, vice president and managing director of CGMA learning, education and development for the Association of International Certified Professional Accountants, in a statement. “But there clearly was a softening in optimism as the survey progressed and an overhang from concerns about coronavirus. Detailed risk analysis and careful forecasting and scenario planning will be essential going forward.”