There’s a new raw-material shortage plaguing global business — only this one is in the finance department.
While the Sarbanes-Oxley Act has sent U.S. companies and accounting firms scurrying for financial talent, the problem is not limited to these shores. “There’s a shortage of accountants throughout the industrialized world,” says Rick Robertson, a professor of accounting at the University of Western Ontario.
While there are no exact numbers, the widespread push for stronger financial controls and improved governance has increased demand for accountants from Canada to India, where there are just 130,000 accountants currently chartered (versus more than a million in the United States). In addition, nearly 100 nations, including those in the European Union, are striving to implement International Financial Reporting Standards (IFRS), further driving demand.
The situation is particularly acute in China. By some estimates, a booming economy will leave the country more than 100,000 accountants short. Due to a long history of state-run business, accountants with experience preparing Western-style financial reports are few and far between. “There’s a need for a particular level of reporting, legal, and regulatory expertise in a capitalist society that you don’t have in a centrally managed economy,” says Chris Higson, a professor of accounting at London Business School. “Those higher-level accounting skills are still largely absent in China.” The Chinese government also announced this year that the country would be adopting IFRS, sharpening the need.
There is no quick fix. Students in Ireland and the UK continue to flock to the subject area, in part due to the high — and rising — salary levels and the opportunities for global work, says Peter Clarke, head of the accounting department at University College Dublin’s Michael Smurfit School of Business. “We have more people taking accounting now than we have had in years,” concurs Robertson. But training takes time; the benefit for business from today’s bumper crop of students is likely five or six years away.
Different regions are approaching the supply problem in different ways. India’s Institute of Chartered Accountants has reduced the required number of years of training to four from more than five. CPA Australia and the Australian government have launched a program to lure retired accountants back into the workforce. Meanwhile, China has enlisted England’s Institute of Chartered Accountants to train 50 Chinese students a year.
Countries and regions seeking accountants
Source: News reports