Last September Robert Half conducted a nationwide salary and benefits survey into the UK finance and accounting industry and at the time we were surprised to see salary expectations were as high as 9%.
To understand the effect that Enron, and the events of September 11, have had on the market and the mood of this professional community Robert Half and Accountancy Age have undertaken another salary and benefits survey.
Surely those expectations could not be met in the current climate? The results are staggering since in many cases they have not just been met but exceeded. But one in ten accountants have enjoyed a salary rise of 10%. Others have not been too far behind.
Why? There is no doubt the accounting profession, built on a foundation of public trust, is now under the public spotlight and legislation governing the financial reporting and regulatory process will continue to change as this situation unfolds.
But companies are unlikely to cut back on accounting and internal audit staff in an environment in which accuracy and thoroughness are critical. More likely we may see increased personnel levels in accounting and finance departments as top executives do not want the exposure to risk, particularly relating to understaffing following Enron.
Added to this, it has become critical the profession can accurately predict and manage the business as current market conditions threaten recession. In a downturn it is critical you have good control over your business and the survey results indicate that organisations are prepared to pay for this.
Another important point, accentuated by Enron, is the value of independence. There has never been a greater need than today for qualified, independent accountants and accounting staff with no conflicts of interest.
It is our view the landscape will also change. External auditors will no longer perform internal audit work or certain other non-audit consulting services (such as IT) for the same client. Businesses will be required to use their own staff.
And we at Robert Half believe the practice of audit firms ‘loaning’ staff to client companies for accounting-related projects will also be reduced or eliminated altogether.
As long as companies use ‘loan staff’ from audit firms for routine accounting functions, it puts the audit firm in the position of signing off on the work of its own people, creating the possibility of conflict or the perception of conflict. Therefore clients may turn more to professional services firms for accounting professionals to work on a project basis thereby avoiding any conflict of interest.
A number of companies are already limiting the work to their external auditors and are using professional services firms for consulting or internal audit work.
- Steve Carter is managing director of Robert Half, UK & Ireland
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