Contact:
Lois Whitehead
Public Relations Manager
212-719-8405
lwhitehead@nysscpa.org

NEW YORK, NY, January 8, 2003 – A year-end CPA Poll by the New York State Society of Certified

Public Accountants (NYSSCPA), tabulated and analyzed by the New York University Stern School of Business, says that 92.96% CPA respondents rated present business conditions fair to poor in New York State. CPAs (52.3%) believe it will take up to five years to recover; 40.48% are more optimistic expecting a recovery in two years.

Looking at the Metro-New York region, which includes the Rockland, Nassau, Suffolk, Manhattan/Bronx, Brooklyn, Staten Island, Queens and Westchester areas, 90.48% of CPAs rate present business conditions in their local geographic area of New York State as fair or poor. Within the next two years, 42.86% these CPAs say local business conditions will improve while 50% say conditions will improve gradually over five years.

“These results are significant,” said JoAnn Golden, CPA, NYSSCPA President. “Results are based on specific experiences of CPAs who act as the primary consultants to their clients on financial, operational and management matters.”

In reviewing fourteen key industries, Metro New York CPAs predict that the health care (38.10%) and high technology (38.10%) industries will show the most improvement, the manufacturing industry (57.14%) will stay the same and the real estate industry (59.52%) will worsen. Actual industry results show:

• Accounting: 23.81% expect improvement; 40.48% expect results will stay the same and 33.33% feel results will worsen
• Agriculture: 11.90% expect improvement; 61.90% expect results will stay the same and 21.43% feel results will worsen
• Banking/Finance: 30.95% expect improvement; 35.71% expect results will stay the same and 30.95% feel results will worsen
• Commercial Transportation: 16.67% expect improvement; 40.48% expect results will stay the same and 38.10% feel results will worsen
• Health Care: 38.10% expect improvement; 30.95% expect results will stay the same and 28.57%feel results will worsen
• High Technology: 38.10% expect improvement; 45.24% expect results will stay the same and 14.29% feel results will worsen
• Insurance: 33.33% expect improvement; 40.48% expect results will stay the same and 23.81% feel results will worsen
• Manufacturing: 21.43% expect improvement; 57.14% expect results will stay the same and 19.05% feel results will worsen
• Oil/Gas/Coal: 23.81% expect improvement; 50.00% expect results will stay the same and 23.81% feel results will worsen
• Real Estate: 11.90% expect improvement, 23.81% expect results will stay the same and 59.52% feel results will worsen
• Retail: 19.05% expect improvement; 59.52% expect results will stay the same and 19.05% feel results will worsen
• Services: 26.19% expect improvement, 57.14% expect results will stay the same and 14.29% feel results will worsen
• Travel/Leisure/Tourism: 11.90% expect improvement, 47.62% expect results will stay the same and 38.10% feel results will worsen
• Wholesale: 11.90% expect improvement, 73.81% expect results will stay the same and 11.90% feel results will worsen

“It is not surprising that healthcare and technology are slated to improve. We see what businesses are spending in these areas,” says Frank Marino, CPA, secretary of the Manhattan-Bronx Chapter. “As for real estate, that is directly related to the economy.”

Turning to the US economy, 42.66% of CPAs said current foreign policy regarding Iraq will deteriorate conditions. The war on terrorism, 30.95% of CPAs say, has had the single largest negative impact and 35.71% believe the government has not done nearly enough.

Almost 43% of CPAs responding are not at all satisfied with the economic policies of President Bush and the same percentage predict the outcome of the US economy as a result of the current foreign policy regarding Iraq will deteriorate conditions.

The CPA Poll also queried respondents on economic conditions in light of the corporate scandals of the past year. More than 45% believe that SEC legislation/enforcement is the most crucial step in preventing future corporate scandals; 47.62% say internal corporate policy/enforcement.

CPAs (50.0%) feel increased public focus on corporate scandals will have a moderate impact on general business practices and the New York State economy in 2003.

Addressing the regulation of the accounting profession by the Securities and Exchange Commission (SEC), 50.00% feel the SEC has done enough or has done enough but can do more. CPAs (42.86%) further believe the SEC does not have enough resources.

CPAs say auditing services (34.2%) have seen the greatest demand since Enron, the failed energy company that started the string of corporate scandals. General consulting services (50.0%) will cease to be provided in light of current industry conditions, CPAs say.

“Businesses are becoming even more diligent in making sure that their financial information is accurate and informative to those who depend on their financial statements,” said Marino.

Addressing the Sarbanes-Oxley Act of 2002, the Federal regulation passed in response to corporate scandals, CPAs expect to have a moderately positive effect (47.62%) and expect earnings quality and corporate integrity will improve (28.57%). CPAs say that pressure to meet earnings estimates (52.38%) has been the key factor that has led to the misrepresentation of stated earnings and internal corporate policy/enforcement (47.62%) the most crucial step in preventing future corporate scandals.

Forty-two percent (42.86%) of those participating have been CPAs for more than 20 years.

The CPA Poll has a statistical confidence level of +/-5.12% at the 95% confidence level and is based on a random sample survey of the Society’s membership. Complete details of the NYSSCPA Poll, including results in the Western New York, Upstate New York and Southern Tier Regions, are available at www.nysscpa.org.

About the NYSSCPA
Representing nearly 30,000 CPAs, the New York State Society of Certified Public Accountants (NYSSCPA) is the oldest and largest state accounting organization in the nation. Incorporated in 1897, the Society is a nonprofit organization that seeks to establish and maintain high standards of integrity, honor, and character among certified public accountants. Its members are CPAs working in public or private practice in a state that serves as the home of Wall Street and major financial institutions. The New York State Society of CPAs is located at 530 Fifth Avenue, New York, NY 10036. To learn more about the Society call 800-633-6320 or visit the Society’s website at www.nysscpa.org.