Business is Good at Accounting Firms, Demand for Talent Persists
Deloitte’s forensic accounting and tax units have enjoyed a big boost in business. The Big Four accounting firm reports that annual revenue at its member firms rose 18.6% in fiscal 2008, spurred by growth in Asia and demand for its financial advisory services, according to Reuters. Amid the slowing economy, the firm’s business transformation services unit (which helps companies restructure their businesses) saw strong demand. Financial advisory services, including forensic accounting and financial due diligence, however, saw the biggest jump. Revenues in this division rose 26.6% to $2.4 billion. Consulting services revenues were up 22.2% percent at $6.3 billion. Revenue at the firm’s tax and legal division also rose 20.4% to $6 billion. Its largest division, Audit, also showed revenue growth of 14.8% at $12.7 billion.
Deloitte added 15,000 people to its work force in 2008, bringing its total to 165,000, states Reuters. Looking ahead, the report notes the firm announced plans last year to grow its work force to 200,000 by the end of 2011.
Deloitte is not the only firm on the hunt for talent. 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, Partners and experts in tax planning for high net worth individuals. A.E. Feldman adds that senior accountants, with roughly four to eight years of experience, are hot commodities. A.E. Feldman’s President, Mitch Feldman, explains, “These candidates are hard to come by because retention at this level is high.”
Business is Good at Accounting Firms
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%.
One reason for the growth: firms are under greater scrutiny (thanks to the accounting scandals at Enron, Tyco and WorldCom) 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.
Changing Landscape
Corporate tax and financial executives continue to be confronted by the increasing complexities of changing tax laws and regulations. The pressures of complying with new tax regulations are forcing most companies to focus on their effective tax rate and their sustainable tax rate. Tax departments must devise plans and practices to keep the effective tax rate as low as possible and boost 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 to ensure they find opportunity and create value in a variety of complex overseas tax environments.
A.E. Feldman’s accounting division is constantly researching industry trends and developments. To learn more about these issues or inquire about the wealth of existing and future opportunities in accounting, the lines of communication are open. Contact A.E. Feldman’s President, Mitch Feldman and the firm’s cutting edge accounting recruiting team here.
