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Knock
on Wood NEW YORK—They don’t want to jinx it, but over half (51.6 percent) of the CPAs polled in the New York State Society of CPAs’ annual Economic Report expect local business conditions to improve gradually over the next five years. But that’s not to say that things are looking copacetic at present. Most members polled (67.6 percent) find business conditions in New York state to be “fair,” while another 21 percent judge conditions as “poor.” A considerable minority (11 percent) of the members polled say conditions are “good” this year. Members attributed their general pessimism over current conditions to an uncertain market and other factors, and said ineffectual fiscal policy has done little to help. About 24 percent blamed a volatile stock market, 23 percent pointed to rising healthcare costs and 21 percent said it was corporate scandals that had the most negative impact on conditions. CPAs, meanwhile, overwhelmingly agree (73 percent) that the moderate increase in interest rates has had a null effect on the New York economy. Fourteen percent (14.2) felt the moderate increase improved economic conditions, while 13 percent (12.8) said the tax increase deteriorated economic conditions. Room for Improvement In addition to these factors weighing on the economy, almost half (47.7 percent) of the CPAs polled are not satisfied with President George W. Bush’s economic policies. When dissecting the state geographically, metro New Yorkers are the least satisfied (51.9 percent), while only 30.1 percent of Western New Yorkers report dissatisfaction. As they reflected on the past year, the CPAs polled also made projections for next year. Across the state, about 71 percent of CPAs agree that the Public Company Accounting Oversight Board will have a highly positive or a moderately positive effect on audit quality. In addition, most CPAs (41.2 percent) expect the regulations of the Sarbanes-Oxley Act to have a moderately positive impact on audit clients’ business practices. NYSSCPA members agree that the most crucial step in preventing future corporate scandal is increasing internal corporate policy and enforcement (38.5 percent) and having stronger boards of directors (24.9 percent). More than half (52.8 percent) of the CPAs polled believe corporate integrity will improve as a result of the Sarbanes-Oxley Act. With these and other factors to consider in the economy’s future, respondents thought that, behind banking/finance and high technology, accounting, with 44.6 percent of the votes, was the profession expected to show the most improvement in profits in 2004. “These results are meaningful because CPAs have a broad business view of the economy,” said NYSSCPA President Jeffrey Hoops. “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 an operational perspective. CPAs are also able to access the business impact of the recent corporate governance scandals and resulting reform efforts of Sarbanes-Oxley.” Based on the 493 responses, the NYSSCPA Economic Report, prepared by Stanford H. Odesky and Associates, has a statistical error level of plus or minus 4.4 percent at the 95 percent confidence level. Survey documents were mailed to a representative number of NYSSCPA members, and the responses were weighted to reflect overall membership numbers in each of the four regions: Metro New York (77.7 percent), Western New York (13.2 percent), Central (7.6 percent) and Southern Tier (1.5 percent). For a complete summary of the results, go to www.nysscpa.org and click “Enter Press Room” at the left-hand side of the page. |
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