Glance at a newspaper, tune in to the evening news or log onto a blog or chat room and you’ll see reports and commentary on the economic recovery that seem to veer in every conceivable direction.
The AICPA/UNC Kenan-Flagler Business & Industry Economic Outlook Survey Q2 2010 brings clarity to many of the issues of greatest importance to today’s CPAs. Issues addressed in the survey range from the long-term economic forecast and a timetable for the economy to return to pre-recession levels of business to inflation, business growth and performance and top challenges. Conducted between April 13 and May 2, the survey reflects the thoughts and opinions of 1,768 CPA executives in business and industry for the second quarter of 2010.
“Our latest survey shows a significant shift toward optimism among our CPA members serving in executive positions in business, industry and government,” said Carol Scott, CPA, MBA, AICPA vice president, business, industry and government. “These results should be taken as a very positive indicator. As financial executives charged with running companies and meeting payrolls, CPAs are on the front lines in this economy, and their views on the direction of business conditions are well informed and sophisticated.”
Positive Signs Emerge
Despite the still-shifting sands beneath today’s troubled economy, 40 percent of survey respondents are “optimistic” or “very optimistic” about the U.S. economic outlook for the next 12 months. This finding is a marked improvement, up from 25 percent for the first quarter of 2010 and the record-low of five percent for the first quarter of 2009.
The news is even more positive for survey participants’ prospects for their own organizations over the next 12 months — 45 percent are “optimistic” and six percent are “very optimistic.” This is the first time in more than two years that more than half of CPA executives surveyed were optimistic about the economic outlook for their organizations. Additionally, eight percent expect business to “expand a lot,” more than 48 percent expect business to “expand a little” and 26 percent expect it to “stay the same” for the next 12 months.
Complete Recovery Remains on Hold
The optimism shared by many CPA executives participating in the survey is tempered by caution in many key areas, especially on the issue of when the U.S. economy may return to pre-recession levels. Only 33 percent expect the return before 2012 (two percent expect it in 2010 and 31 percent in 2011) and the majority (63%) are looking to 2012 and beyond, with 38 percent believing pre-recession levels will not be restored until after 2012.
Respondents are holding out higher hopes for their own organizations. Forty-four percent expect their businesses to return to pre-recession levels before 2012 (13% anticipate it in 2010 and 32 percent in 2011) and 46 percent are not expecting it to happen until 2012 or beyond, with 25 percent setting their sights after 2012.
CPA Executives Identify Top Skills and Training
The economic crisis has generated a fallout of proportions not seen by many since the Great Depression. Yet, one reality that has emerged from this fallout is the need for organizations to have a professional development plan that includes acquiring and improving the skills and qualities needed to meet the demands of today’s and tomorrow’s marketplace.
CPA executives participating in the survey identified financial accounting and reporting, “other” experience in their industry and communications skills as the top three skills they look for in their financial staff. Following these skills are financial analysis, information technology and budgeting/forecasting. Skills having less importance to the CPA executives surveyed are external audit experience in their industry, internal control/internal audit, supervisory/management experience and treasury.
Core skills are not the only criteria CPA executives value in their financial-team members. Degrees and certifications carry a weight of their own. The CPA credential is the clear favorite among respondents when asked which degree or certification is the most important to their finance teams. CPAs were desired by 80 percent, followed by MBAs (desired by 36%). CPAs were ranked first by 72 percent of respondents, while MBAs were ranked first by four percent of respondents.
Complete survey results are available here.
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