Accounting & Tax

CPAs Pessimistic about Economy

An AICPA poll shows 54 percent of accountants think the economy is in a bad way, though views on their own companies are considerably more cheerful.
Stephen TaubSeptember 5, 2006

More than half of certified public accountants polled by the American Institute of Certified Public Accountants, many of them CFOs or controllers, are pessimistic about the state of the U.S. economy. The opinions of 54 percent of accountants polled ranged from neutral to very pessimistic. That’s up from 41 percent expressing similar sentiments in December 2005, the last time the AICPA conducted this kind of survey.

“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, in a statement.

He points to a recent Conference Board survey that found consumer confidence in the economy sank to a nine-month low in August.

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However, the AICPA survey was not all doom and gloom.

More than two-thirds (68 percent) of the respondents remain confident about the prospects for their own companies, according to the study. In fact, 58 percent project moderate to substantial growth by the end of 2006, and plans for spending, especially for information technology and new product development, continue to be strong.

Even so, the growth will more than likely not stem from U.S. markets. According to the AICPA, fewer companies — primarily those with more than $100 million in annual revenues — expect increased growth from U.S. sources.

What’s more, fewer companies are planning to increase their payrolls and more are projecting workforce reductions.

For example, 39 percent of those surveyed said their companies will expand their workforces over the next six months, down from 45 percent who said the same thing in December.

At the largest companies — those with more than $1 billion in annual revenues — 21 percent anticipate workforce reductions in the second half of 2006, compared with 17 percent in December.

A total of 2,571 CPAs participated in the survey. More than half (1,324) serve as chief financial officers, 456 are controllers and 234 are chief executive officers. The remaining 557 include chief operating officers, chief information officers, chief accounting officers and managers.

Nearly half (48 percent) of the survey participants work for companies with annual revenues of $10 million to $100 million. Eleven percent work for companies with revenues exceeding $1 billion. Some 60 percent of those polled work for privately held companies.