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Wednesday, Oct 4, 2023

Profession Gains Appeal Due to Greater Demand

Profession Gains Appeal Due to Greater Demand By SHELLY GARCIA Senior Reporter The Sarbanes-Oxley Act has spiked the demand for auditors and other accounting types so much that they’re calling it the full employment act in the trade. Accounting firms and public companies alike have increased staffing to keep up with the ballooning workload. And the limited supply of these types of workers is moving salaries upward. Increased demand, coupled with the changing status of accounting and auditing professionals, is also attracting more students to the profession, after a number of years when these kinds of careers took a back seat to technology. “Bottom line it’s been a major boon for the whole internal audit function,” said Tom Sprague, a partner at Sprague & Associates, a Sherman Oaks-based executive search firm that specializes in financial and accounting personnel. “The demand for internal auditors has gone up a ton.” Sprague figures his firm’s orders for internal audit professionals has tripled since public companies and accounting firms began ramping up to implement Section 404 of the Sarbanes-Oxley guidelines, a process that essentially calls for a second audit process at public companies. The Sarbanes-Oxley Act, or SOX as it has come to be known, came into law two years ago and though efforts to comply began about one year ago, the process has really picked up steam over the past six months. On average, accounting firm executives say they have, through new hires and staff reorganizations increased the proportion of staffers devoted to SOX-related tasks by about a third. More internal staffing And since the work cannot be left entirely to outside sources, public companies have had to boost their staffing levels internally as well. “The companies all have had to take on significant resources and in almost all cases have had to hire external resources to help them comply with 404,” said Dan Benson, a partner in the technology, media and telecommunications practice at Deloitte. With so many companies actively tapping into the job market at the same time, salaries are rising accordingly. “A person that used to be making $60,000 that maybe only had two or three jobs to choose from, now can make in the high $70s and have 15 jobs to choose from,” Sprague said. “If you were making $90,000 you’ll make $110,000.” SOX Section 404 requires companies to document procedures and processes for such tasks as accounts payable, inventory management, payroll, etc. Firms already have established procedures in place for these activities, but in many cases, the processes have not been formally documented. While outside staff can help to set up these control systems, a range of internal workers familiar with the processes at the company is also needed to implement them. Because of the increased demand for their services, some workers are choosing to eschew staff positions for temporary ones, where they can often boost their earnings well up into the six-figure range with no risk of down time. “You take an auditor who makes $80- to $100 grand a year, if they can get $70 or $80 an hour, they can put overtime on top of it and they make a killing,” said Lee Woodward, president of Sharf Woodward & Associates Inc., a placement firm that specializes in financial and information technology staffing. SWA executives say an average contract runs from three to six months, and there is no dearth of opportunities. “We are literally taking them the day they stop one contract and putting them physically on the next,” said Mary Siefert, senior recruiter at Sherman Oaks-based SWA. In addition to experienced auditors, accounting firm officials say they are also increasing their college recruiting efforts, in some cases by double digit percentages. “We’re finding we’re up on campus recruiting over 20 percent,” said Mark Nelson, managing partner at Ernst & Young. “If we hired 100 people in the area, we probably would be hiring 120 now.” Because SOX is still so new, college administrators and professors say they have not yet seen any increase in applications for accounting majors, but as teachers incorporate some aspects of Sarbanes-Oxley into their courses, students’ interest in accounting has been piqued. When Cal State University Northridge accounting lecturer Jim Macklin invited KPMG to a class to discuss SOX he said the discussion changed some students’ perceptions of the profession. Greater appeal “They were very favorably impressed with the impact that they can have, and what an interesting career that might make,” Macklin said. “Instead of dealing with tax returns, you’re dealing with very high level strategic things. I think that makes it a lot more appealing to students.” Professors say at the undergraduate level the schoolwork deals with the ethics issues that generated legislation to begin with rather than the details of SOX itself. But in some advanced programs where ethics has long been a large part of the discussion SOX has added a new twist. When the participants in the Pepperdine University Graziadio School of Business & Management’s executive programs discuss SOX formally and informally, the talk tends more to the operational than the philosophical, said Peter Withers, director of the school’s executive MBA program and Presidential Key Executive MBA program. “I’ve had people say we’ve always prided ourselves on having a strong ethical structure, good reporting procedures, transparent accounting, and now we find it’s going to cost us fill in the blank dollars to abide by Sarbanes-Oxley, yet we thought we were doing everything right,” Withers said.

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