upbeat on their own companies. not so confident about the overall economy.<\/i><\/p>\n
by rick telberg<\/b>
\nthe finance executive <\/i><\/p>\n
finance and accounting professionals appear generally bullish about their own organizations’ business prospects through the remainder of 2006, but are not so confident about the short-term picture for their clients or the overall economy, according to our latest soundings.<\/p>\n
reflecting public opinion of the nation as a whole, many accountants and financial managers are dubious of washington’s leadership. one financial company executive questions whether the white house and congress can deal effectively with the ballooning budget deficit. economic confidence, he fears, could be thwarted by a weak response to another natural or man-made disaster. “how many (hurricane) katrinas can we handle?” he asks.while the vast majority of contacted cpas predict, at worst, no change for the overall economy or for their clients, robert freeman, an executive with erie indemnity co. in erie, pa., is among the handful expecting the economy and clients’ situations to worsen. “generally costs are rising faster than employee compensation,” he notes. he says his company’s situation will remain unchanged because insurance product renewal rates are typically insulated from general economic swings.<\/p>\n
an executive with a financial services firm that provides bankruptcy trustee services notes that when the economy worsens his business typically improves. he predicts things will get somewhat worse for the economy and his clients, while they improve somewhat at his company.<\/p>\n
meanwhile, a staffer at a large nonprofit organization expects conditions to improve for the overall economy, while they remain the same at his organization and worsen for his clients. he notes. “our revenue comes from government grants and the federal budget for discretionary spending is being reduced.”<\/p>\n
john c. cooley, head of a small accounting practice in hurst, tex., says that while his firm is benefiting from a general surge in demand for cpa services, infrastructure rebuilding around the country is just now reaching the point of fueling wider spread economic growth. keith b. campbell, president of a forensic accounting firm in gulfport, miss., notes that americans’ poor savings habits compounded by easy access to consumer credit and last year’s tightened bankruptcy law could soon cause problems for “hyper consumers” and the overall economy. both professionals expect much improvement at their firms this year while conditions improve only somewhat for clients and the overall economy.<\/p>\n
in a recent bay street group survey, 16 percent of cpas from all sectors of the profession predicted “much improvement” for their businesses this year compared to 2005, while only two percent predicted such growth for the overall economy and six percent see it for their clients\/customers. on the flip side, 10 percent of cpas foresee a worsening situation for their companies, but 17 percent predicted worsening in the overall economy, and 12 percent predicted it for their customers.<\/p>\n
an internal audit manager with a technology group who serves the retail industry expects much improvement for his company while outsourcing of u.s. jobs, and believes that the spending power lost by those jobs going overseas will ultimately cause a u.s. economic downturn that could hit his retail sector clients particularly hard. <\/p>\n
barry goldwater, a principal with an insurance company in newton, mass., sees no improvement for the overall economy this year. while his company will be limited to some improvement because of issues, such as increasing government regulation among other things, it has allowed for the entry of competition from players “who weren’t in our business three years ago.”<\/p>\n
the off-year, non-presidential election, “will mask the negative economy and make things look okay,” says michael moebs, head of an economic research and investment banking firm in lake bluff, ill. he predicts much improvement for his company, but no improvement for the economy or for his clients.<\/p>\n
but the discrepancy between professionals’ optimism for themselves and their own companies, on one hand, and their tempered outlooks for their company’s own customers and the overall economy, on the other hand, begs the question: can both be right?<\/p>\n
[first published by the aicpa]<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"