As updates to accounting standards keep coming faster and faster, accounting firms find themselves expanding their services as well as their ranks to meet the needs of clients and to remain competitive.
John Kirschner, partner at BlumShapiro”™s Shelton office, and John Schuyler, chairman of the Connecticut Board of Accountancy and partner at Marcum L.L.P., provided the Business Journal a snapshot of the regional accounting industry.
BlumShapiro, a regional accounting, tax and business-consulting firm based in West Hartford, is one company that offers diverse services. It guides private companies in fulfilling tasks ranging from auditing financial statements to deciding on a new structure during leadership transitions.
The company, which targets manufacturing, distribution and retail businesses as well as municipalities and nonprofits in the upper Fairfield County area, noticed the economy impacted private companies”™ hiring practices, Kirschner said. Right now, private companies are thinking more carefully about who they want to do business with and what companies they believe are worth the investment.
“Companies in New England are looking for new markets, and some of the markets they”™re finding are overseas,” Kirschner said. “In Fairfield County, new businesses are looking for accounting firms, and existing ones are looking for more from the assurance services and now more CPAs who do consulting to help them strategize for the future. Over the years, companies have looked more and more toward their public accounting firms for that consulting piece.”
To bolster their ranks to meet the needs of customers, accounting firms are seeking qualified senior accountants.
But there has been a shortage in Connecticut, according to Schuyler.
“We”™ve been reasonably successful in our hiring,” Schuyler said. “We”™ve gotten some good people coming in, but I would say accounting is a tight market. Everybody I talked to has trouble recruiting senior accountants. There”™s a lot of demand for quality people in the CPA profession, but not enough applicants in this region.”
Private companies are getting some accounting help from friendlier rules.
All businesses must abide by the generally accepted accounting principles established by the nonprofit Financial Accounting Standards Board, but privately held companies can have difficulty supplying the resources to meet the same standards as public companies.
In 2012, the Financial Accounting Foundation, which oversees the FASB and is based in Norwalk, established a Private Company Council that focuses on creating standards to better suit and serve private companies. Although the board is still in its infancy, Kirschner said this was the first attempt to establish accounting standards that are tailored to privately
held businesses.
“Some of the things the Private Company Council looks at is accounting for goodwill,” Kirschner said. “Although a business may have a fair value of assets of a certain dollar amount, the overall value of the business may be higher because of the intangibles that relate to how the business has been run, including things it has established, such as its brand, that allows the business to be sold at a higher price than what its fair value of assets are.”
The old guidelines didn”™t allow private companies to amortize the value of those intangible assets, or goodwill. In January, the FASB endorsed a recommendation by the Private Company Council to allow goodwill amortization. One example in which amortizing goodwill could be beneficial is during an acquisition, Kirschner said.
