Accounting career (continued)

Accounting career overview (from Accounting Careers by WetFeet)


For an industry that plodded along fairly unchanged since the turn of the century, the world of accounting has experienced some tectonic shifts in past decade. As the memories of Enron, WorldCom and Arthur Andersen begin to fade and the industry, especially the portion occupied by Big Four, rebuilds investor trust, accounting doesn’t appear to be returning to its staid, old-bean counter roots. Well, at least nor entirely-auditing is auditing and tax season will surely outlive us all. But the face of accounting has changed. Its role in business, particularly big business, is much more complex. The industry is being forced to redefine itself and not just to satisfy the new federal regulations.
One upshot of accounting scandals from the early part of this century is a new realization of the critical role accounting practitioners play in business decision. New security regulations now reach directly into boardrooms, dictating certain requirements about how companies operate- a place no one thought securities law could go. While this gives most executives the jitters, it reveals an incredible opportunity for the accounting profession to carve out a new identity. Accounting has now become a basis for corporate behavior, decision-making, and ethics, and the skills demanded of accountants are much broader as a result.
From 1989 to 2002, a series of consolidations and closures transformed what had been the Big Eight into the Big Six (Ernst & Whinney merged with Arthur Young to form Ernst & Young and Deloitte, Haskins & Sells merged with Touche Ross to form Deloitte & Touche), then the Big Five (Price WaterHouse merged with Coopers & Lybrand) and finally the Big Four (Arthur Andersen, following the Enron and WorldCom accounting debacles, lost all of its clients, saw many of its state licenses revoked and started winding down its operations). Toward the end of this period, all of the accounting firms except for Deloitte & Touche also spun out or sold their consulting practices, which in some cases had grown as large as their accounting practices and more lucrative, but also represented a potential conflict of interest.
Beginning in 2001, ethics became a central industry focus as Enron, WorldCom and Arthur Andersen collapsed. Tougher government laws under 2002’s Sarbanes-Oxley Act (“Sarbox”) were imposed to stop misleading and faulty financial reporting and gave birth to a new regulatory entity, the Public Company Accounting Oversight Board (PCAOB).
The years following Sarbox have been tumultuous to say the least. Opening the books of the nation’s largest corporations has revealed layers of disorder, haziness, and fraud. Executives have loudly bemoaned the expense in both services and time of the new regulation, while accounting firms have struggled to interpret the new laws and keep up with the increased demand for their services. In May 2007, the SEC relaxed certain requirements to allow more efficiency and reduced costs in reaching compliance, but any significant changes to the new laws seems unlikely.
Despite this tumult, it’s the great time to be pursuing an accounting career. Firms are not only ramping up staff to deal with increased business resulting from economic reforms and shortages due to job cuts earlier in the decade, but also in response to predictions of an impending talent crunch in coming years. The Economic Policy Foundation estimates that the U.S economy will suffer a shortfall of 6 million workers by 2013, and 35 million workers by 2035. Deloitte & Touche estimates that between 2011 and 2014, only about 5.4 million college graduates will enter the workforce, and based on surveys measuring the interest of high-school aged kids in accounting careers, the number of people entering the accounting profession could decline by as much as 43 percent within five to ten years.
Competition for top candidates is fierce and will only become fiercer, meaning firms will have to do more to recruit and woo their candidates of choice. That puts you, the fresh new talent, in an enviable poison.
But don’t think you’ll be handed a plum position just like that. As the business world becomes more global and diverse, accounting must adapt to keep up. Age-old professional practices are converging with newer methods, such as principal-based accounting and International Financial Reporting Standards (IFRS). Accounting professionals today need a wider range of skills than ever before to survive in an industry that grows more technical and international every year. Interpersonal and analytical skills- the kind typically required in demanding fields like consulting- are becoming increasingly important in accounting as well. Recent graduates armed with the most current knowledge should have an edge in the job market.
Licensing is also a must if you want to move higher in the ranks. Along with the traditional CPA (Certified Public Accountant) license, more accountants are obtaining additional licenses such as CMAs (Certified Management Accountants) and CIAs (Certified Internal Auditors). An increased focus on hiring accountants with real-world business experience in addition to formal accounting education also exists, so be prepared to talk about the impact your experience will have on your job performance. And new and experienced accountants alike are being required to expand their knowledge base to include accounting regulations updates associated with Sarbox.
When you enter the industry, don’t expect to be handed big decisions and cut-edge projects right off the bat. The accounting profession will always contain a certain dose of tedium. There’s simply no way around that in the practice of auditing and many other standard accounting procedures. But put your nose to the grindstone early and keep an eye out for opportunity, and you should begin climbing the ladder in no time.