by Ken Rankin
While the accounting profession’s image may have been tarnished by the financial finagling at Enron, WorldCom and other corporations, those same scandals are creating long-term job security for CPAs throughout corporate America, federal analysts at the Bureau of Labor Statistics concluded.
In its latest 2004-05 Occupational Outlook Handbook, the BLS concluded that the profession’s overall employment prospects in the coming years will be “favorable” because “increased scrutiny of company finances will drive growth of accountants and auditors” over the next few years.
“As a result of the recent accounting scandals, federal legislation was enacted to increase penalties, and make company executives personally responsible for falsely reporting financial information,” the BLS explained. “These changes should lead to increased scrutiny of company finances and accounting procedures, and should create opportunities for accountants and auditors, particularly certified public accountants, to more thoroughly audit financial records.”
In addition to requiring more outside auditors, the new and more stringent financial reporting ground rules will also increase demand for internal auditors and government accountants to serve as watchdogs, the report predicted.
“Increased awareness of financial crimes, such as embezzlement, bribery and securities fraud, will also increase the demand for forensic accountants to detect illegal financial activity by individuals, companies and organized crime rings,” the BLS said. “Computer technology has made these crimes easier to commit,” but that same technology “has also made tracking down financial criminals easier, thus increasing the ease and likelihood that forensic accountants will discover their crimes.”
Significantly, however, researchers at the bureau predicted that the recent accounting scandals may result in slower growth in the demand for financial management and consulting services by accountants.
“Since federal legislation now prohibits accountants from providing nontraditional services to clients whose books they audit, opportunities for accountants to do non-audit work could be limited,” BLS analysts said. “However, accountants will still be able to advise on other financial matters for clients that are not publicly traded companies, and for non-audit clients, but growth in these areas will be slower than in the past.”
The report also predicted that the increasing popularity of commercial tax preparation firms and computer software will cause accountants to shift away from tax practice. “As computer programs continue to simplify some accounting-related tasks, clerical staff will increasingly handle many routine calculations,” the report noted.
In its latest snapshot of the status of the profession, the BLS noted that accountants and auditors hold about 1.1 million jobs in the U.S. One in five now work for “accounting, tax preparation, bookkeeping and payroll services firms,” and only one in 10 are self-employed.
Based on the latest available data, the BLS pegged the median annual wage and salary earnings of accountants and auditors at $47,000 in 2002. “The top 10 percent of accountants and auditors earned more than $82,730, and the bottom 10 percent earned less than $30,320.”
The report also cited more recent 2003 salary estimates based on a survey by Robert Half International that indicates that accountants and auditors with up to one year of experience earned between $29,500 and $40,500 last year, while those with from one to three years of experience earned between $34,000 and $49,500.
“Senior accountants and auditors earned between $41,000 and $61,500; managers earned between $47,500 and $78,750; and directors of accounting and auditing earned between $66,750 and $197,500 a year,” the BLS said. “The variation in salaries reflects differences in size of firm, location, level of education, and professional credentials.”
In the federal government, the starting annual salary for junior accountants and auditors was $23,442 in 2003, though candidates with a “superior academic record” might start at $29,037, the BLS noted. Experienced accountants employed by the federal government in non-supervisory, supervisory and managerial positions averaged $69,370 a year in 2003; while government auditors averaged $73,247, according to the report.
