Competition for Accounting Talent Remains Fierce
Thanks to the accounting scandals at Enron, Tyco and WorldCom, firms are under greater scrutiny to be clearer with financial statements, audits and tax reports. “The years in the aftermath of Sarbanes-Oxley have spotlighted the critical role the accounting profession plays in our capital market system,” said Denny Reigle, AICPA Director of Academic and Career Development. Mounting regulatory demands are now placing greater resource demands on already strained tax departments. As a result, competition for talent has been…and remains fierce.
Executive search firm, A. E. Feldman, reports that recruiting among accounting firms is more competitive than ever. The firm says that accounting jobs and international tax jobs exist for candidates who have an understanding of international finance and cultures. A number of top firms are also seeking State and Local Tax accountants as well as Tax Managers and Partners. Accountants with expertise in FAS 109 and FIN 48, in particular, are in high demand.
Tax Practices Thriving
A national Public Accounting Report survey of firms shows that, overall, business is good, according to AccountingWeb. The reports states that things are looking up at the Big Four as well as the next tier of firms. For the third year in a row, the PAR Survey revealed double digit composite growth –10.6%- for 2008. Though revenue growth was healthy across the board, the bulk of the increase came from tax practices, up 14.4%.
So what’s driving the rise in tax revenue? Analysts conducting the PAR survey believe much of the upward change is from transaction work, which ballooned last year, reports AccountingWeb. That includes efforts to comply with rulings such as FAS 109 and Fin 48.
FAS 109 (Accounting for Income Taxes) is the governing standard for financial statement accounting for income taxes. It requires separate tax rates for deferred taxes for each jurisdiction where a company is subject to tax. The complexities and resource challenges surrounding FAS 109 have been exacerbated by additional rules governing the Accounting for Uncertainty in Tax Positions released by the FASB, known as FIN 48,
FIN 48 dramatically changes how companies account for uncertain income tax positions. They include a higher standard that tax benefits must meet before they can be recognized in a company’s financial statements. Although FIN 48 is intended to increase the comparability of financial statements, it also significantly increases the calculation and documentation requirements for individually identified income tax exposures.
Applying FAS 109 and FIN 48 amid vague international tax laws can be challenging. Complicating matters, business and tax issues have become more intricate thanks to language barriers, diverse cultures, different currencies and technology as well as complex international tax laws. These growing demands have placed a significant burden on tax departments. As a result, firms are staffing up.
Accounting Firms Hiring
Regulatory demands have led to substantial hiring increases by public accounting firms. In fact, in 2006 alone hiring by firms shot up 83% from the previous three years, according to a new report by the American Institute of Certified Public Accountants. The report also finds that today, the majority of firms, 67%, also anticipate continued growth in hiring.
Additionally, the PAR survey finds that many firms are strengthening their tax resources by adding tax professionals, tax partners, or both.
