By Marietta E. Gentles

Business conditions in New York state have made CPAs significantly less optimistic about a sudden economic recovery. Many believe it will take up to five years to see improvements, according to the New York State Society of CPAs’ Year-End Economic Poll.

Based on the findings, metro New York City and statewide CPAs appear to concur with the Federal Reserve’s January description of U.S. economic growth as “sluggish.” In the metro-New York region, 90.48 percent of CPAs rate local present business conditions as either fair or poor. Fifty percent of these respondents say conditions will improve gradually over five years, while a more hopeful 42.86 percent anticipate a two-year recovery period. Other regions are even less certain the economy will quickly rebound. For example, 82.76 percent of Southern Tier CPA respondents say the economy will take up to five years to recover.

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

As CPAs work with various clients, they have a firsthand look into how the economy effects certain industries. More than 200 randomly selected CPAs responded to the poll, conducted by New York University’s Stern School of Business.

The poll also measured economic conditions in 14 key industries. According to the findings, 38.10 percent of metro-New York CPAs expect improvement in the healthcare and high technology industries. However, 59.52 percent of the metro-New York group do not expect a profit increase in the real estate industry.

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

As far as the overall economy, respondents from both metro New York and statewide regions believe international issues play a major role. Foreign policy regarding Iraq will not make conditions better, according to 42.66 of all respondents. In fact, approximately 43 percent said they are unsatisfied with President George Bush’s economic policies and believe that the consequences of current foreign policy will make matters worse. Approximately 31 percent of metro-New York CPAs believe that terrorism has had the single largest negative impact on the economy.

The poll also examined the effects last year’s corporate scandals have had on the economy. Half of all the respondents indicated that the unveiling of recent corporate fraud will moderately impact business practices and the 2003 New York state economy. Approximately 45 percent of the respondents said the Securities and Exchange Commission’s new rules and enforcement measures are the most crucial steps in combating financial deception, while 47.62 percent said internal corporate policy and enforcement is the key.

Approximately 34 percent of the respondent CPAs said auditing services have increased since the scandals surrounding the accounting profession. Fifty percent indicated that general consulting services will no longer be provided in light of current industry conditions. And in upstate New York, 49.18 percent of respondents believe that pressure to meet expected earnings has led to corporations reporting fraudulent figures.

The economic poll has a statistical confidence level of +/-5.12 percent at the 95 percent confidence level. The results included responses from CPAs in the following geographic areas: Metro New York (Rockland, Nassau, Suffolk, Manhattan/ Bronx, Brooklyn, Staten Island, Queens and Westchester NYSSCPA chapters), Western New York (Buffalo, Syracuse, Rochester and Utica NYSSCPA chapters), Upstate New York (Adirondack, Mid-Hudson and Northeast NYSSCPA chapters) and the Southern Tier (NYSSCPA Southern Tier Chapter). For a complete summary of the poll results, go to www.nysscpa.org and click “Enter Press Room” at the left-hand side of the page.