The post-SARBOX accounting industry, Part I
Malcolm McLelland
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What's going on in the accounting industry in the last few years as a result of the Sarbanes-Oxley Act? It's an interesting question, the answers to which I think would surprise a lot of people; primarily accountants. From one perspective, the future has never looked brighter for the accounting/auditing profession. The consensus among accountants seems to be that the profession is now gaining the respect it deserves and there is a lot of work to be done documenting and cleaning up clients' accounting, financial reporting, and internal control systems; not to mention a considerable amount of work to be done in a wide variety of consulting specialities. Is the outlook really that great? To begin, let's consider a time-series graph of GDP-deflated accounting industry revenues:
The graph suggests, contrary to popular belief, that accounting industry revenue growth rates have decreased in the post-Sarbanes-Oxley environment. Why so? Doesn't the demand for accountants greatly exceed their supply lately? What's really going on in the accounting industry?
It's a complex topic, but I believe there are relatively clear answers to such questions (as well as to a number of related questions). More on this soon!
(Note: This posting draws on my joint research with co-authors, Matt Anderson and Greg Gerard, presently titled "Sarbanes-Oxley and the shrinking accounting labor market: Exploring potential causes and their implications".)
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