Business Executives Take a More Tempered View of U.S. Economy, AICPA Survey Finds

Business executives are taking a more cautious view of the U.S. economy and their own company’s growth prospects after two straight quarters of exuberant optimism, according to the second-quarter AICPA Economic Outlook Survey, which polls CEOs, CFOs, controllers and other CPAs in U.S. companies who hold executive and senior management accounting roles.

Seventy-four percent of business executives said they were optimistic about the economy over the next 12 months, down five percentage points from last quarter. Part of the drop-off was due to concerns about trade and political uncertainty, survey respondents said. Optimism about their own company’s outlook slipped a percentage point to 70%. Both sentiments fall in the uppermost range of post-Great Recession assessments.

Survey respondents also trimmed their expectations for profit and revenue growth over the next 12 months. Profit growth estimates slipped from 4.4% last quarter to 4%, while revenue growth projections eased from 5% to 4.8%.

“Despite their more tempered views on growth, business executives still see a strong hiring picture over the next year,” says Arleen Thomas, managing director of Americas Market, Global Offerings & CGMA Exam. “Labor market tightness continues to be a concern, with companies encountering difficulty in recruiting candidates with the right skills.”

The number of employers who said they planned to hire immediately rose three percentage points to 30% in the quarter. Another 13% said they had too few employees but were hesitant to hire, down a point from last quarter. Overall, 48% of business executives said their companies currently have the right number of employees. Still, ‘availability of skilled personnel’ remained the No. 1 challenge for businesses for the fourth quarter in a row.

The CPA Outlook Index—a comprehensive gauge of executive sentiment within the AICPA survey— dropped two points in the second quarter to 79. The index is a composite of nine, equally weighted survey measures set on a scale of 0 to 100, with 50 considered neutral and greater numbers signifying positive sentiment. All the index components were down or flat this quarter, except for employment, which rose a point.

Other key findings of the survey:

  • Inflation concerns, which jumped sharply last quarter, remained unchanged.
  • Technology showed surprising weakness in sector optimism, dropping from 80% last quarter to 69%. Hiring expectations for the industry also fell from 2.5% anticipated growth over the next 12 months to 2.1%. Yet tech spending plans remained strong.
  • The percentage of business executives who expect their company to expand in the coming year dropped from a post-recession high of 72% last quarter to 70%.

After availability of skilled personnel, the No. 2 and No. 3 challenges for businesses were “regulatory requirements and changes” and “employee and benefits costs,” respectively.

WithumSmith+Brown SOC Team Authors and Presents Inaugural AICPA SOC for Cybersecurity Certification

When the AICPA hosted its flagship System and Organization Controls (SOC) for Cybersecurity Certification course this past week, members of Princeton, N.J.-based WithumSmith+Brown’s (FY17 net revenue of $175.4 million) SOC for Cybersecurity Services Group served as lead instructors for the curriculum. This first-of-its-kind program also was authored by the professionals from the advisory, tax and audit firm. In total, seven Withum professionals also are among the first CPAs nationwide to earn the AICPA’s SOC for Cybersecurity digital badge.

A market-driven, flexible and voluntary reporting framework, SOC helps organizations communicate their cybersecurity risk management program initiatives as well as effectiveness of controls.

Withum’s certified SOC for Cybersecurity team members includes Tony Chapman, partner and SOC practice leader; Anurag Sharma, principal; Scott Mahoney, senior manager; Jim Bourke, partner, director of advisory practice; Stephanie Fitzgerald, SOC senior manager; Anupam Goradia, SOC senior manager; and Andrea Fernandez, SOC staff auditor. These certifications have earned Withum the distinction of having more AICPA-authorized SOC specialists, to perform peer reviews on SOC engagements, than any other CPA firm nationwide.

“As a leader in SOC and cybersecurity and information security services, Withum has once again distinguished itself – this time as it relates to the new cybersecurity risk management reporting framework,” says Chapman. “Our firm is among the first and has the highest concentration of fully designated SOC professionals authorized to provide peer reviews.”

AICPA has retained Withum to write, present live and record on-demand viewings of the first SOC for Cybersecurity Certificate training course for SOC professionals. Three of Withum’s professionals, Chapman, Sharma and Mahoney, served as course authors and presenters. Topics addressed in the AICPA-sponsored course offer an overview of the cyberthreat landscape and terminology, various SOC services, components of a cybersecurity risk management program, utilization of criteria to assess an entity’s controls, key steps for performing the cyber risk-management examination and factors to consider while forming the opinion and preparing the practitioner’s report.

SOC for Cybersecurity is a new entity-wide cybersecurity audit that allows organizations to report on their cybersecurity management programs to internal and external stakeholders with credibility. For clients whose cybersecurity risk management programs are mature, an independent third-party firm can perform a comprehensive examination to assess cybersecurity risk management programs.

AICPA Offers Suggestions to Lawmakers about Proposal to Redesign the IRS

The AICPA offered suggestions to lawmakers on the House Ways and Means Subcommittee on Oversight about a discussion draft, the Taxpayer First Act, to redesign the IRS.

“We are committed to supporting Congress in its efforts to ensure a service-oriented, modernized tax administration and appreciate the opportunity to provide comments,” says Annette Nellen, chair of the AICPA tax executive committee.

“The AICPA firmly thinks that creating a practitioner services division and the regulation of tax return preparers will make a substantial difference in taxpayer awareness, confidence and compliance, thereby instilling trust in the tax administration system as a modern functioning IRS of the 21st century,” Nellen says.

Nellen commended provisions in the discussion draft “that seek a fair and efficient interaction with the IRS.” As examples, she cited the provisions that would codify the IRS independent office of appeals and that would provide clarity of equitable relief from joint liability.

Nellen urged the subcommittee, “to seek active engagement of taxpayers and their practitioners in the development of the IRS strategies and comprehensive plans.”

AICPA and CPA Practice Advisor to Present ‘Most Powerful Women in Accounting’ Awards

The AICPA and CPA Practice Advisor will co-present the Most Powerful Women in Accounting awards, given annually to 25 women leaders who are helping to define and advance the profession.

The joint administration of the award is part of the AICPA’s ongoing efforts to promote inclusiveness and create more opportunities for women to attain leadership positions in both public and management accounting.

“We’re excited to work with CPA Practice Advisor to recognize some of the best and brightest in the profession,” says Jacquelyn Tracy, chair of the AICPA women’s initiatives executive committee (WIEC). “Year in and year out, this is a highly impressive group of women that we hope to give even more visibility as role models and pathfinders.”

The WIEC sponsors research, mentorship and networking opportunities, and oversees the annual women’s global leadership summit.

“Now in its seventh year, the ‘Most Powerful Women in Accounting’ awards recognize women who are not just making a difference in the accounting profession, but who are the difference in the profession – our accounting profession would not be where it is without the impact these influential women have made,” says Gail Perry editor-in-chief of CPA Practice Advisor.

Nominations for the 2018 Most Powerful Women in Accounting awards are being accepted until April 27. Winners will be recognized at AICPA ENGAGE, to be held June 9-14 in Las Vegas. To be eligible, nominees should demonstrate they:

  • Are a driving force in creating a culture of innovation or excellence within their firm, or helped, as a vendor, to develop technologies that empower firms to be more productive and profitable.
  • Have reached a level of management and ownership within their company, with demonstrable impact on its success.
  • Actively mentor those following in their footsteps.

To nominate a candidate, please visit the awards page.

DHG Partner Gantnier to Serve as AICPA Quarterly Webcast Moderator

Liz Gantnier

Liz Gantnier

Liz Gantnier, an assurance partner at Charlotte, N.C.-based Dixon Hughes Goodman (FY17 net revenue of $404 million) has been selected to serve as moderator of the AICPA SEC quarterly update webcast series, which will showcase the profession’s leading experts and their views on hot topics within the industry.

The series will feature a two-hour webcast each quarter with topics relating to current events in the industry and SEC, PCAOB and FASB developments. In her role as moderator, Gantnier will lead the conversation by directing noteworthy questions to three expert panelists.

Gantnier has more than 30 years of experience in the accounting industry and has served on numerous committees and governing boards.

AICPA Names Dohrer as Chief Auditor

Robert Dohrer

Robert Dohrer

The AICPA has named Robert Dohrer as chief auditor. Dohrer is currently the global leader of quality and risk at RSM International. Dohrer will succeed Charles Landes, the AICPA’s vice president of professional standards – public accounting, who plans to retire early next year.

“In looking to find a successor with Chuck’s unique skill set – an in-depth knowledge of the global profession and auditing and a successful track record – the AICPA sought an individual who understands the audit process for firms of all sizes,” says Susan Coffey, Association of International Certified Professional Accountants’ executive vice president for public practice.

Now based in London, Dohrer has overall responsibility for RSM’s audit and other attest services policies, procedures and guidance, as well as general risk containment policies for the network. Prior to joining RSM International in 2012, Dohrer served as RSM US’s national director of assurance services and international assurance services practice leader and served a broad range of clients. He has 29 years of experience in public accounting, all with RSM International and RSM US.

“As chief auditor, Bob will serve as the AICPA’s expert on U.S. and international auditing, attestation, quality control, review, compilation and preparation standards, as well as internal control and enterprise risk management,” says Coffey. “He will lead the public accounting professional standards team to deliver high-quality standards, and will lead and provide strategic direction to the Auditing Standards Board and accounting and review services committee, in partnership with their chairs.”

Christen, Chairman of Baker Tilly International, to Join CPA.com Board

Tim Christen

Tim Christen

Tim Christen, former chairman of the AICPA, has been named to the board of directors of CPA.com.

Christen is currently chairman of Baker Tilly International and formerly CEO of Chicago-based Baker Tilly Virchow Krause LLP (FY17 net revenue of $546.6 million). As chair of the AICPA, he championed innovation and rapid technology adoption. He also played a key role in securing membership approval for the formation of the Association of International Certified Professional Accountants, the 650,000-member global accounting organization that serves as the unified voice of the AICPA and the Chartered Institute of Management Accountants (CIMA).

“Tim brings an important strategic perspective to our board,” says Erik Asgeirsson, president and CEO of CPA.com. “As an experienced and respected firm leader, his insight and guidance will inform how we work with firms to transform core practices areas.  It’s an exciting time for both the company and the profession and we’re fortunate to have someone with Tim’s background join the board at this critical juncture.”

“We’re entering a critical time regarding the evolution of the audit and how that impacts the profession,” says Barry Melancon, president and CEO of the AICPA. “Having someone with Tim’s large firm and auditing background on the CPA.com board will help us greatly in setting our strategic roadmap.”

AICPA Announces New Professional Certificates in Forensic Accounting

The AICPA launched two intermediate-level certificate programs to help satisfy a growing need for financial professionals with forensic accounting expertise. The new AICPA programs explore core and specialized forensic techniques.

These curricula are timely, as economic and regulatory trends – along with corporations’ increasing focus on the threat of financial crime – are expected to benefit the forensic accounting profession in the coming years according to a study by IBISWorld, a market research firm. The report indicates employment in forensic accounting grew at an annualized rate of 18% from 2012 to 2017, and projects continued growth in the sector in coming years.

“Our certificates provide new options to CPAs seeking a comprehensive pathway to the Certified in Financial Forensics (CFF) credential, as well as to other financial professionals who wish to show competency in financial forensics but are not eligible to get the CFF credential,” says Barbara Andrews, AICPA Director of Forensic Services. “Anyone wanting to expand his or her knowledge of financial forensics can benefit by enrolling in our new certificate programs.”

The Core Forensic Accounting Certificate covers subjects essential to the planning, performance and reporting of all forensic accounting engagements, including:

  • Forensic engagement and management
  • Evidence identification and gathering
  • The discovery process
  • Effective interviewing techniques
  • Deposition and testimony
  • Preparing sustainable reports

The Specialized Forensic Accounting Certificate dives into more complex forensic themes, such as:

  • Bankruptcy
  • Technology
  • Data recovery
  • Damages
  • Lost earnings and fringe benefits
  • Patents, copyrights and trademarks
  • Mergers and acquisitions
  • Detecting and investigating fraud
  • Divorce and other family law issues

Additional information regarding the growing forensic accounting profession is available on the AICPA Forensic and Valuation Services website.

Optimism About U.S. Economy Hits Post-Recession High, AICPA Survey Finds

Business executives’ optimism about the U.S. economy continues to soar but is tempered somewhat by growing inflation concerns, according to the first-quarter AICPA Economic Outlook Survey.

Seventy-nine percent of business executives said they were upbeat about prospects for the economy, eclipsing last quarter’s post-Great Recession high of 74%. As a point of reference, optimism levels were as low as 28% in early 2016. Survey respondents’ view of their own companies’ outlook over the next 12 months also set a post-recession record, with 71% expressing optimism.

“Business executives are drawing a lot of confidence from current economic indicators, and cite federal tax reform and deregulation as two factors in their improved outlook over the next year,” says Arleen Thomas, managing director of Americas market, global offerings and CGMA exam, management accounting for the Association of International Certified Professional Accountants. “At the same time, we’re seeing an uptick in concerns often associated with a hot economy, from talent pool issues to rising inflation fears.”

On the job front, half of business executives say their companies have the right number of employees. Hiring plans continue to improve, however, with 27% of companies saying they plan to fill positions immediately (up two percentage points from last quarter) and another 14% (up one percentage point) indicating they have too few employees but are hesitant to hire. Finding the right candidates remains an issue, however: ‘availability of skilled personnel’ remains the No. 1 challenge for businesses for the third quarter in a row.

AICPA Appoints Chair of Certified in Financial Forensics Credential Committee

Jeffrey Buchakjian

Jeffrey Buchakjian

AICPA appointed Jeffrey Buchakjian chair of the certified in financial forensics (CFF) credential committee. Buchakjian is a partner and forensic accounting specialist in the financial advisory services group of New York-based EisnerAmper (FY17 net revenue of $352.6 million).

The CFF credential committee plays a role in promoting the growth of financial forensics services by raising the level of awareness of the CPA and CFF credential, as well as the CPA’s role in financial forensics. In addition, the committee works to develop and maintain qualification requirements for credential applicants, develops initiatives to recruit and retain credential holders, and serves as technical advisors to the AICPA regarding educational offerings for potential credential holders.

Buchakjian specializes in providing litigation consulting and forensic accounting services to attorneys, public and private corporations, and governmental agencies. He provides consulting and investigation services on matters involving financial fraud, commercial litigation and disputes, insurance claims and asset tracing. Buchakjian is frequently asked to conduct seminars, and continuing professional and legal education programs in the areas of forensic accounting and fraud.

“The CFF is a highly recognized and well-respected credential in the field of forensic accounting,” says Buchakjian. “I look forward to working with my fellow committee members across the country to continue to develop thought leadership and increase awareness of our growing profession.”