Part One | Part Two | Part Three

Employment Trends in the Accounting Profession

A persistent employment trend in the accounting profession is the relative shift of CPAs and other accounting professionals away from public practice. As of August 2003, regular members of the American Institute of CPAs who were actively employed in public accounting represented less than 40% of all active regular members [see http://www.aicpa.org/members/memstats.htm]. This percentage figure has been declining over time, and the trend has been mirrored in state society membership figures as well.

The remaining active, regular AICPA members work in Industry, Consulting, Education, Government, Law, and various areas other than public accounting. In particular, "Members in Industry" represent over 44% of all active, regular AICPA members, clearly outnumbering their colleagues in public accounting. Other statistics point to accounting graduates spending less time in public accounting, moving quickly -- and sometimes immediately -- from college into business and industry.

What's the Attraction?

One of the driving forces behind the trend is that qualified accounting professionals can often advance further in their careers -- and faster -- if they "switch horses" mid-career. CPAs regularly find that becoming a corporate CFO is far more attainable -- and desirable -- than becoming a partner in a public firm. And somewhat ironically, accountants with public experience typically enter the CFO track far sooner than their classmates who shunned public practice.
 
But there are additional, personal reasons why public accountants switch. Public accounting is a time-intensive career choice, and many professionals today just aren't as willing to sacrifice so much of their time for their careers. Travel demands, "busy season", and other aspects of public accounting work eventually represent too much sacrifice for the accountant who is trying to have a life outside of his/her career.

Solid Career Options

CPAs and other accounting professionals who are interested in careers in business and industry have many options. Beyond the obvious move of taking a financial accounting job with a particular company, there are three functional areas that you should consider:

• Financial Analysis;
• Internal Auditing; and
• Information Technology.

Demand for professionals with public accounting experience is currently strong in these areas. Let's look at each in turn.

Financial Analysis focuses on delivering the information needed to support managerial decisions that are intended to improve the profitability of the enterprise. It's about determining -- and communicating -- what is going on, why it matters, and what your company should do about it. Accounting professionals who embrace this kind of career are those who aspire to be business partners instead of just scorekeepers. And those who succeed in this field do so because they add value, an ability that's always in demand.

Careers in Internal Auditing have taken on new significance with the emergence of new regulations and professional practice standards. For example, the Sarbanes-Oxley Act has imposed burdensome new requirements on publicly-traded companies. Those companies -- along with many privately-held companies under the specter of similar state-level legislation -- are scrambling to comply on matters of accountability and governance.

Information Technology is the third area worth looking into. You might be thinking "I'm not a computer person" -- but accounting professionals who have strong IT skills are in demand in several ways. Many companies need someone who can explain to their IT people what their Accounting people need. And so, you might find yourself working as a liaison between a company's Accounting and IT departments. Also, companies undergoing accounting system conversions or Enterprise Resource Planning (ERP) System implementations need people who understand accounting issues as well as technological ones. And a recent survey conducted by Robert Half Finance & Accounting pointed out that the skill area CFOs consider most in demand among corporate accounting and finance professionals today is -- IT.

What's Different?

CPAs and other professionals in public accounting can expect the "rules" for career success to be different in business and industry. When working directly for a single private enterprise, your performance will often be evaluated by people who have professional backgrounds quite different from your own. Most importantly, you will be evaluated on knowledge, skills, and abilities (KSAs) that you may not have exercised in public accounting work.

To understand the difference in KSAs, you must first recognize that private enterprises are not in business to do excellent accounting. Of course, they must do competent accounting and comply with all laws and regulations, but in the world of business and industry, accountants receive relatively few rewards simply for accounting well.

To have a successful career in business and industry, you must focus on developing and exhibiting the KSAs of a "Business Partner." Here are four characteristics of Business Partners and the KSAs that go along with them.

1. Business Partners look forward as well as backward. Like Janus, the Roman god having one face looking towards the future and another face looking at the past, successful financial professionals in business and industry must overcome the traditional mindset of accountants to focus solely on history. This means you need to anticipate what will, could, or should happen, as well as figuring out what did happen. Forward-looking KSAs include forecasting, planning, and budgeting.
   
   
2. Business Partners look outward as well as inward. Again, successful financial professionals in business and industry are those who overcome the traditional mindset of accountants to focus solely on what happens internally within an enterprise. Your job isn't simply to "mind the store" -- it is more likely to involve proactively seeking and identifying opportunities and threats that your enterprise faces from customers, competitors, suppliers, regulatory agencies, and other external parties. Outward-looking KSAs include supply-chain analysis, competitive analysis, and marketing analysis.
   
   
3. Business Partners don't just compile -- they communicate. As an analyst or financial manager, your job will be to tell decisionmakers in your company what's going on, why it matters, and what they can do about it. Business Partners rely on KSAs related to communicating their analysis and interpretation of financial and non-financial information to decisionmakers who are not financial experts.
   
   
4. Business Partners understand that their enterprises exist to generate profit, not to avoid loss. As such, you will be expected to help your enterprise take well-considered business risks having sufficient profit potential to justify the risks. And you'll never have enough time to be absolutely certain about anything; in today's fast-paced, competitive business environment, "close enough" information "now" is prized over more-precise information later. Many accountants are very uncomfortable with this notion; those who thrive in business and industry are those who possess KSAs in areas like statistics, risk management, and financial modeling.

Manager or Individual Contributor?

In considering a transition to business and industry, CPAs and other accounting professionals might wonder how the supervisory and management experience they gained while in public practice will be valued by corporate employers. Smaller companies are more likely to hire you in at a supervisory level, whereas in larger companies, you may be expected to resume the role of an individual contributor. However, in larger companies, your management experience will typically enhance your promotability, enabling you to rise farther and faster than colleagues in analyst-type positions who lack your leadership experience.

Conclusion -- And a Look Ahead

Regardless of the area you end up working in, your public accounting background is an excellent springboard to positions in business and industry, especially if you take a broad view of the many opportunities you have. And regardless of your motivations for considering a career outside of public accounting, this series will guide you in making a successful transition to business and industry. Upcoming articles will focus on answering the following questions:

• What resources are available to transitioning accountants through the professional associations that have traditionally served them, such as the AICPA and state CPA societies?
• What resources are available through other professional associations -- such as the Institute of Management Accountants (IMA) -- to foster successful transitions?
• What additional certifications -- such as CMA, CFM, CIA, etc. -- are available to complement the CPA designation and enhance your career prospects?
• What Continuing Professional Education programs are most helpful for accounting and finance professionals in business and industry and who provides them?
• What advanced degrees might you consider pursuing to further enhance your career prospects?

BRUCE POUNDER is President of Leveraged Logic, a professional service firm that provides education and consulting services to accounting and finance professionals. He has 20 years of experience developing innovative IT-based financial management solutions for clients including The Coca-Cola Company, Reliant Energy, and Fidelity National Financial.

In 2003, Leveraged Logic introduced the PREPanywhere Review Course System, the only series of live online review courses available for the Certified Management Accountant (CMA) and Certified Financial Manager (CFM) examinations. As a NASBA-registered sponsor of continuing professional education, Leveraged Logic also offers live online "CPEanywhere" sessions to help CPAs, CMAs, CFMs, and other certified financial professionals maintain their certifications.

Bruce holds the CMA and CFM designations, a Bachelor's degree from Syracuse University, and an MBA from Rice University. He is a member of the Institute of Management Accountants (IMA), serving as President of the Western North Carolina Chapter. Bruce currently resides in Asheville, North Carolina, where he can be reached by phone at (828) 254-4812 or by e-mail at bpounder@LeveragedLogic.com.