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It’s been a choppy year for accountants everywhere in 2009. The accounting profession has been affected just like the rest of the financial services industry. Hiring is expected to be light for the next six months or so.

As part of writing this article, we at Careers-in-Accounting interviewed four people in June 2009: (1) a tax accountant in a mid-sized firm, (2) an audit partner in a mid-sized firm, (3) a practice head in an industry group focused on audit in a Big 4 firm and a (4) a manager-level employee in a Big 4 firm. These persons were all in the United States and were spread around the country geographically.

Here is the message on where the profession is right now:

1. Bread and butter auditing work is doing reasonably well. Each of the Big 4 is billing more than $5 billion globally in this area. Pretty huge although auditing is not that profitable.
2. There is pressure on the auditing area due to excess capacity. This is particularly true in the Big 4. There used to be a shortage of good accounting graduates. No longer. If you are a partner in Atlanta, say, and you’ve got 40 staff and junior accountants in the office, you will under price jobs at the margin, in order to put your underutilized staff to work. We are seeing pricing pressure for the first time. This is aggravated by pressure on corporate clients who increasingly bid out their work given the poor economic environment.
3. Certain industry areas in accounting like energy and the life sciences are doing quite well. Accounting firms that have the expertise to perform audit, tax and risk management work in areas like energy services or medical devices are prospering because these parts of the economy are growing nicely – despite the economic downturn.
4. In contrast, a lot of the specialty functions in accounting such as risk management, M&A, tax or valuation are doing poorly. This is where there has been tremendous growth in the last decade.
   • One accountant we talked to said that there most lucrative work is transactional. That is, they go in and look at the books of an M&A target on behalf of the acquirer and pass judgment on the quality of the accounting. This type of work is down by 80% for this firm in 2009 versus 2007. A lot of financial pain in the profession as a result.
   • Another accountant we talked to is involved in risk management and valuation work inside a Big 4 firm. He indicated that the volume of work is down considerably and he is now in a bit of a “death match” competition against his peers in the group – trying to get access to jobs from auditing partners. Everyone is vying for the same work. Three years ago there was more work to go around than people to perform it.
5. The shock waves of Arthur Andersen have never gone away. That is, a legal problem associated with the Enron audit took a large firm down. Legal liability is a giant problem for accounting firms. Today, BDO Seidman which had a decent shot at joining the “Big 4” some day is likely going the wrong direction. They have lost a case for failing to detect fraud in a client firm with a damage award of $521.7 million. See the story.
6. The liability issue may forever change the profession and a number of firms are talking increasingly about creating federations of local firms that can cross-refer business but are legally and economically separate. The reason is that if a massive lawsuit hits the Houston office, say, the firm itself could still survive an adverse judgement. There is talk that one day the Big 4 may no longer exist, although this certainly seems like a remote possibility.
7. Because of the risk of liability, accounting firms have become extremely risk averse. We heard complaints from everyone that we interviewed about the burden of compliance due to a desire to avoid suit. Firms will not provide fairness opinions and will rarely go out on the slightest limb in order to avoid suit.
8. Top dogs are still making good money. As we report in the salary section, the partners at the top of the profession can easily bring home several million a year. This is continuing – even in the current recession. Top partners need to be personable, have deep client relationships and a commanding knowledge of their particular domain.
9. Employment prospects are expected to brighten up. Underlying fundamentals for the industry are strong given ongoing need for accounting services. One interviewee quipped that Sarbanes-Oxley is the “Accountants Full Employment Act”. He noted that the moment that any transactional business came back that his firm would be busy and start to hire again.
10. Employment prospects look brighter at the smaller firms. Because of the liability issues and constraints facing the Big 4 firms, we heard that smaller regional firms are good places to be right now. A number of them are hiring.

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