FEARS ARE growing that a shortage of auditors and accountants in Australia could lead to compliance issues, and ultimately have implications for the broader economy.
As corporates continue to navigate the increasingly complex compliance landscape — taking in projects including the US Sarbanes-Oxley Act, CLERP9, International Financial Reporting Standards (IFRS) and Basel II — demand for qualified accountants and auditors to work on implementation is rocketing.
“This is not a new thing,” said David Jones, managing director of Robert Half International, which recently held a roundtable of senior executives on the issue. “Every time we go into a recession, the Big Four and Big Five don’t take on enough graduate trainees, so when we come out of a recession, there’s a high demand for labour and there’s not enough qualified accountants to fill the roles.”
Exacerbating the problem, are the policies of the accounting bodies in Australia. “If you want to study CPA [Certified Public Accountant] or CA [Chartered Accountant]here in Australia, you first have to do a finance or accounting related degree,” Jones said.
“In the UK you don’t. There is a school of thought that the institutes are being far too restrictive about who they accept to study. I know CFOs of companies based in Australia that did not study accountancy related degrees. If they’d lived in Australia they’d never have become accountants and here they are as CFOs of some of Australia’s bigger companies. That is a massive area where the institutes can improve things.”
According to senior executives, there are fears that what currently looks like a trend may turn into a reality if the issues are not addressed. “I believe staffing issues have been present in Australia for a long time and am unsure as to whether it is a trend or a fundamental shift in the employment market,” said Peter Roberts, CFO at Colonial First State Property.
IFRS is placing additional strain on corporates, added Simon Bird, CFO at Graincorp. “The introduction of IFRS has put a real strain on the availability of technically experienced accountants, plus the professional organizations take most of the skilled people before we can get to them,” Bird said.
Failure to address the issue, said Jones, could be detrimental to Australia’s long-term economic stability and its drive to establish itself as a viable location for Asia-Pacific business headquarters.
“Ultimately, if it becomes a longer term problem, companies might think twice about coming here as they cannot guarantee local expertise. Consequently they might choose another regional center,” Jones said.
While Sarbanes-Oxley compliance drove demand for professionals last year, IFRS and Basel II are the key issues this year. “The Basel II area is growing a lot this year,” said Kevin Jarvis, divisional manager at Robert Half.“Many projects were started last year, but we are hearing now about significant growth in those areas as they get to grips with what they need to do to achieve compliance in the required time. IFRS is where we are seeing most demand. Last year Sarbanes-Oxley was the big one, but IFRS is growing this year. The banks were very focused on IFRS last year but we’ve seen a lot of communications firms pushing the red button this year.”
SOX creates hybrid auditor role
WHILE MANY firms in the US, and those headquartered outside have completed implementation and internal controls work connected with Sarbanes-Oxley, ongoing compliance and testing has emerged as a key issue. The first signs of a potentially future local trend are being seen in the US as the Sarbanes-Oxley emphasis shifts from compliance to ongoing assurance.
“In North America, the ongoing effort to comply with Sarbanes-Oxley is leading to a hybrid accountant/auditor/IT specialist coming in to deal with that ongoing compliance,” Jones said. “In some ways it is similar to an IT auditor, because all of the compliance work is tied up with ERP systems. Now in North America there is high demand for these people. There has been a switch from demand for compliance readiness to ensuring ongoing compliance. We haven’t seen that in Europe or here, but it is a trend in North America.”
Stuart Fagg is the Editor ofRisk Management magazine, Lawyers Weekly’s sister publication.
Like this story? Read more: