Year: 2021

In today’s edition of “How Much Are You Worth?” let’s take a look at public accounting salary projections for 2022 from recruitment firm Hays US.

We chose four tax and four audit roles from Hays’s 2022 Salary Guide to highlight in this post. Hays provides accounting salary ranges, with the first figure indicating minimum pay and the second figure indicating maximum pay. In this particular salary guide, the salary ranges for tax and audit roles are given for eight states/regions:

CaliforniaColoradoWashington, DC; Maryland; and VirginiaFloridaGeorgiaIllinoisNew YorkTexas

Unfortunately many of the salary ranges for public accounting jobs in the 2022 guide are exactly the same as in Hays’s 2021 Salary Guide (see: California, Illinois, and Texas). However, some roles in some states are expected to see a bump in pay next year. For those roles, we provided a comparison of 2021’s projected salary range and 2022’s projected salary range (2021 -> 2022). The smallest pay increase was 3.4% (audit manager in Colorado), while the largest was 44.7% (tax director in New York).

Here is Hays’s public accounting salary projections for 2022:

California

Tax director: $120,000-$200,000Tax manager: $80,000-$150,000Tax senior: $80,000-$120,000Tax accountant: $75,000-$95,000Audit director: $150,000-$200,000Audit manager: $110,000-$150,000Audit senior: $60,000-$100,000Audit associate: $40,000-$60,000

Colorado

Tax director: $140,000-$200,000Tax manager: $100,000-$120,000Tax senior: $70,000-$90,000Tax accountant: $75,000-$95,000Audit director: $150,000-$200,000 $150,000-$220,000Audit manager: $110,000-$145,000 $120,000-$150,000Audit senior: $80,000-$100,000 –$90,000-$100,000Audit associate: $40,000-$60,000 $55,000-$70,000

DC, Maryland, and Virginia

Tax director: $160,000-$210,000 $160,000-$250,000Tax manager: $80,000-$150,000 $100,000-$150,000Tax senior: $50,000-$75,000 $70,000-$100,000Tax accountant: $65,000-$90,000 $75,000-$90,000Audit director: $150,000-$200,000 $150,000-$250,000Audit manager: $100,000-$130,000 $100,000-$175,000Audit senior: $60,000-$90,000 $70,000-$100,000Audit associate: $40,000-$60,000 $55,000-$70,000

Florida

Tax director: $140,000-$220,000 $150,000-$240,000Tax manager: $90,000-$130,000 $100,000-$130,000Tax senior: $70,000-$90,000Tax accountant: $50,000-$75,000Audit director: $150,000-$200,000Audit manager: $80,000-$115,000 $100,000-$130,000Audit senior: $65,000-$85,000 $65,000-$90,000Audit associate: $50,000-$70,000

Georgia

Tax director: $140,000-$240,000 $140,000-$275,000Tax manager: $90,000-$155,000Tax senior: $70,000-$90,000 $70,000-$100,000Tax accountant: $55,000-$75,000 $60,000-$75,000Audit director: $150,000-$200,000Audit manager: $90,000-$150,000Audit senior: $65,000-$90,000 $65,000-$95,000Audit associate: $50,000-$75,000

Illinois

Tax director: $160,000-$210,000Tax manager: $80,000-$150,000Tax senior: $50,000-$75,000Tax accountant: $65,000-$90,000Audit director: $150,000-$200,000+Audit manager: $100,000-$130,000Audit senior: $60,000-$90,000Audit associate: $40,000-$60,000

New York

Tax director: $130,000-$190,000 $140,000-$275,000Tax manager: $80,000-$150,000 $90,000-$160,000Tax senior: $80,000-$110,000Tax accountant: $65,000-$90,000Audit director: $150,000-$250,000Audit manager: $90,000-$150,000 $100,000-$175,000Audit senior: $60,000-$100,000 $70,000-$100,000Audit associate: $40,000-$60,000 $55,000-$75,000

Texas

Tax director: $180,000-$210,000Tax manager: $135,000-$165,000Tax senior: $75,000-$90,000Tax accountant: $60,000-$80,000Audit director: $150,000-$200,000Audit manager: $115,000-$135,000Audit senior: $75,000-$95,000Audit associate: $55,000-$65,000

If you missed Part 1 (Robert Half) and/or Part 2 (Alliance Resource Group) in our series of public accounting salary prognostications for next year, click on the links above or click on the article titles below.

Related articles:

How Are Public Accounting Salaries Stacking Up For 2022? (Part 1, Robert Half)

How Are Public Accounting Salaries Stacking Up For 2022? (Part 2, Alliance Resource Group)

The post How Are Public Accounting Salaries Stacking Up For 2022? (Part 3, Hays US) appeared first on Going Concern.

Did you miss our previous article…
https://www.digital-accountants.com/?p=331

For years we’ve been hearing how blockchain and AI will transform accounting, and this recent article from MIT Sloan School of Management (aka MIT Sloan) about the five forces remaking accounting gives them both the obligatory nod. But we’re not here to talk about blockchain. We’re here to talk about ESG.

After a brief introductory paragraph about the “change bearing down on the accounting discipline,” they go directly into climate change and what that means for the bottom line:

“For the longest time, the purpose of a company was to provide returns for its equity investors and debt investors,” said Nemit Shroff, accounting professor at MIT Sloan. “ESG is saying that the purpose of a company is broader than just its investors — it’s society at large. That means that the measurement has to in some sense reflect that, and that’s a huge fundamental change.”

The one constant amid much change: Knowing exactly what to measure will be essential to making progress.

“Rewards [for companies] are going to be greater in instances where you can measure the company’s performance,” Shroff said.

Before we go any further, let’s zip over to Investopedia first to get a definition of ESG so we’re all clear what we’re talking about:

Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates.

We good? OK.

If you recall, Deloitte announced in August it was rolling out a climate learning program for its 330,000 people to “inform, challenge and inspire Deloitte people to learn about the impacts of climate change and empower them to confidently navigate their contribution to addressing climate change by making responsible choices at home and at work, and in advising our clients.” They claim this is the first program of its kind for a major worldwide organization. And KPMG has already planted its own flag, investing $1.5 billion into a three-year ESG initiative. So we know it’s a hot topic, the research from Sloan just confirms that.

Continuing with the article:

More than ever, investors care about a company’s ESG performance and companies are under pressure to show the positive impact they’re making. A report from Moody’s Investor Services showed global flow to environmental, social, and corporate governance concerns increased to $80.5 billion in the third quarter of 2020, up 14% from the previous quarter. And when BlackRock chief Larry Fink urged companies to eliminate greenhouse gas emissions by 2050, investors paid attention.

“Businesses are increasingly recognizing that maximizing shareholder value involves more than profits,” said Chloe Xie, assistant professor of accounting at MIT Sloan. But because ESG measurement and reporting aren’t currently standardized on a balance sheet the way that earnings are, this remains “a new frontier for accounting.”

Many companies measure their environmental impact by focusing on their carbon emissions and the specific actions they’re taking to reduce them, such as planting trees that will absorb carbon from the environment, Shroff said.

“Carbon emissions is a natural thing for people to think of, and I think partly it’s because we tend to focus on what we can measure, and we can measure carbon emissions,” Shroff said.

Collapse enthusiasts are no doubt intimately familiar with the looming threat of climate change but this is genuinely new territory for a profession “whose core responsibility is to help businesses maintain accurate and timely records of their finances” as Sloan said.

A December 2020 Harvard Business Review article punctuated the article’s title about the future of ESG with an incredulous question mark at the ridiculous idea that the future of ESG lies in the hands of the accounting profession and yet here we are. The IFRS Foundation is considering global sustainability standards and the SEC has declared an enhanced focus in climate-related disclosures.

It seems that unlike the robots that they’ve been saying for 10 years are coming for your jobs, this “revolution” may actually be upon us.

The post ESG Is the Next ‘Hot Thing’ In Accounting, Say MIT Researchers appeared first on Going Concern.

If it was any other year, champions of audit quality would be throwing Deloitte a ticker-tape parade for only having two glaring errors out of 53 audits inspected in the firm’s newly released 2020 PCAOB inspection report.

But it was PwC auditors who were the ones pulling ticker-tape out of their hair while Deloitte was standing on the sidelines looking like McKayla Maroney during the 2012 Summer Olympics in London. It does seem a bit fishy that PwC, after making significant mistakes in 18 of its 60 audits of public companies reviewed by the PCAOB in its 2019 inspection report, dropped to only one deficient audit out of 52 inspected in its 2020 report—which is a record-low 1.9% error rate. And if it wasn’t for PwC, Deloitte would be the one with the all-time low deficiency rate of 3.8%.

There has been speculation that because of the pandemic and the recent unrest at the PCAOB, the audit cops are going soft on audit firms during the inspection process, resulting in the historically good 2020 report cards for PwC and Deloitte. But if you look at Deloitte’s deficiency rates in its past five inspection reports, the quality of the firm’s audits has been trending in the right direction:

2015: 24%2016: 24%2017: 20%2018: 11.5%2019: 10.3%

So it’s not totally inconceivable that Deloitte’s auditing improved as much as it did from 2019 to 2020. The PCAOB found deficiencies in both the financial statement and internal control over financial reporting audits during the most recent inspection cycle, as the graphic below shows:

According to the PCAOB, the most frequently identified deficiencies were:

One of the deficient audits was for a Deloitte client in the consumer staples sector; the other was for a client in the industrials sector.

So if PwC and Deloitte got gold stars from the PCAOB, what did KPMG, EY, BDO USA, and Grant Thornton get? We’ll let you know in the coming days. In the meantime, Deloitte’s 2020 inspection report is below in its entirety:

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Related articles:

It’s True: PwC Had a Nearly Flawless 2020 PCAOB Inspection Report

Deloitte Is Doing a Much Better Job Lately of Not Screwing Up Audits

The post Deloitte Came Oh So Close to Having a Historically Low Audit Deficiency Rate appeared first on Going Concern.

Did you miss our previous article…
https://www.digital-accountants.com/?p=280

Interest in the CPA credential has been down significantly since at least 2016, and we have discussed this issue to death so I don’t need to link you to the evidence (but here’s some anyway). The problem here is that talking about it isn’t solving it, thus we will continue talking about it and hope it all works out somehow.

Fewer people taking the CPA exam on its own isn’t a huge problem (well, the AICPA might say it is but they’re slightly biased), especially when you consider the trend toward accounting firms hiring more non-accounting graduates than they used to. We fully expect that trend to continue and it’s not the worst thing in the world since the future is upon us and said future consists of piles and piles of data in need of analyzing. But the raw CPA exam numbers aren’t the only problem. There are multiple issues hitting the profession at once from multiple fronts, like the fact that the AICPA estimates 75% of CPAs will retire in the next 15 years and that there is a serious shortage of accounting professors. Interest in accounting programs is still there, but this September 2019 CPA Journal article suggests that while accounting program enrollment data looks good on its face, there may be trouble ahead — a “current disenchantment” they called it. All of these taken together could mean a critical shortage of CPAs in the near future.

So we’ve established what pressures exist and why they should be concerning, but the profession continues to wonder out loud why people aren’t drawn to the CPA credential like they used to be. The following short video just put out by the Illinois CPA Society has some ideas:

CEO Video Series: Putting Destination CPA Back on Accounting Students’ Radar from Illinois CPA Society on Vimeo.

I know you all are very busy so in case two minutes and 26 seconds is more time than you have to spare, here are the reasons ICPAS President and CEO Todd Shapiro gives for why people might choose not to pursue the CPA credential these days based on feedback they’ve received researching this problem:

They feel they can take off in their anticipated or chosen careers without it.They believe that any value the CPA credential holds is outweighed by its lack of relevance to their personal endeavors and the time commitment necessary to obtain it.They don’t see the personal or financial return on investment.Their employers or prospective employers aren’t supporting or requiring it.They see other experiences as being more valuable.

A few of these fall under the “no time” category which is something we’ve addressed before; however, as anyone who has ever camped out in line overnight on new iPhone release day will tell you, most people can make time to do something when they’re sufficiently motivated to do so. And in the case of the CPA, it seems like more and more accounting graduates are deciding that the personal investment required for licensure is too great a trade to make in exchange for the potential benefits.

This is not an argument about “is the CPA worth it” because we know it is. And we should not extrapolate any information about its value from the fact that fewer accounting graduates are taking it these days. But the profession needs to do some serious reflection on the why of this issue and what it can do to address it. What will it take to convince tomorrow’s accounting graduates that their personal and financial investment is worth it? In other words, how can the profession fully convey the credential’s value? You’d think that would be an easy question for a bunch of accountants to answer but alas, here we are.

Further reading:
A CPA Pipeline Report: Decoding the Decline [Illinois CPA Society]

Photo by Lukas Hartmann from Pexels

The post The CPA Credential and the Profession Are in a Race For Relevance, Says ICPAS CEO Todd Shapiro appeared first on Going Concern.

Did you miss our previous article…
https://www.digital-accountants.com/?p=248