New York CPAs Assess State Economy Metro CPAs Cite Stock Market/Corporate Scandals

New York CPAs Assess State Economy
Metro CPAs Cite Stock Market/Corporate Scandals

FOR IMMEDIATE RELEASE

In the Metro-New York region, which includes the five boroughs and Rockland, Nassau, Suffolk, and Westchester, 81.5% of CPAs rate present business conditions in their local geographic area of New York State as fair or poor. Within the next two to five years, 88.8% of Metro CPAs say local business conditions will improve; 11.2% expect improvement within one year. Looking at the current economy in Metro-New York, higher real estate taxes on their clients’ businesses have caused them to postpone expansion (41.0%) while increased sales taxes has had no effect (58.1%).

Statewide, 67.6% CPA respondents rated present business conditions fair and rate present business conditions in their local geographic area better than they rate conditions statewide. CPAs also feel the moderate increase in interest rates has had a null effect on the New York economy.

“These results are meaningful because CPAs have a broad business view of the economy,” said Jeffrey Hoops, CPA, NYSSCPA President. “Survey results are based on specific experiences of CPAs who as independent auditors, tax advisors and consultants need to understand their clients’ business from both a financial and operational perspective. CPAs are also able to access the business impact of the recent corporate governance scandals and resulting reform efforts of Sarbanes-Oxley.”

In reviewing fifteen key industries, Metro New York CPAs said banking/finance, high technology, accounting and health care are expected to show the most improvement in profits in 2004. CPAs predict that the banking and finance and technology industries will show the most improvement, the manufacturing industry will stay the same and the publishing industry will worsen. Complete industry results for Metro New York can be found by clicking here.

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

Turning to the US economy, almost half (47.7%) of statewide CPAs are not satisfied with the economic policies of President Bush. Metro New York CPAs are the least satisfied (51.9%).

Looking at the CPA profession, 41.9% of Society members statewide feel public focus on corporate scandals will have a negative impact on general business practices and the New York State economy and 43.5% of Metro NY CPAs agree. CPAs say the SEC is doing enough to regulate accounting practices (30.3 statewide, 30.6% Metro New York area). CPAs across the state agree the Public Company Accounting Oversight Board will have a highly positive effect or moderately positive effect on audit quality (63.1% statewide, 63.9% Metro New York).

CPAs also expect the regulations of the Sarbanes-Oxley Act to have a mostly positive impact on audit clients’ business practices (41.2% statewide and 44.1% Metro New York). Sarbanes-Oxley’s impact on the credibility of financial statements is split between earnings quality will improve (47.3% statewide, 49.5% Metro New York) and earnings quality will stay the same (48.1% statewide, 45.8% Metro New York). The effect of Sarbanes-Oxley on corporate integrity is 52.8% of statewide CPAs feel it will improve, 54.4% in Metro New York.

The most crucial step in preventing future corporate scandals, CPAs say, is increasing internal corporate policy and enforcement (38.5% statewide, 39.2% Metro New York) and stronger boards of directors (38.5% statewide, 22.4% Metro New York).

Respondents have seen the following difference in audit clients (15.7% more upper management and 24.0% more concern with internal control). In Metro New York, 25.5% are more concerned about internal control.

Recent changes surrounding the accounting profession has made CPAs more careful in client relations (41.0% statewide, 40.0% Metro New York). CPAs reporting no change in handling client relations were 38.7% statewide and 39.0% Metro New York.

Over sixty percent (60.4%) of those participating have been CPAs for more than 20 years.

The CPA Poll has a statistical confidence level of +/-4.4% 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 on the Society’s website, www.nysscpa.org.

Representing 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 not-for-profit 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 practice, industry, government and education 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.