Kids know what’s hot.
Surging demand for accountants is spurring enrollment gains for university accounting programs.
Accounting firms have seen business boom thanks largely to the Sarbanes-Oxley Act of 2002. The demands of complying with the act’s key provision,Section 404,are stretching the Big Four to their limits and spilling over into work for midsize firms, which also are facing a hiring crunch.
Accounting firms simply say they can’t hire enough people right now. And that’s carried over to accounting programs at universities.
“We’re seeing an upward enrollment trend,” said Glenn Pfiffer, professor of accounting at Chapman University in Orange. “Students are getting info that the job market is very good for accounting students.”
Chapman offers a bachelor’s degree in accounting, in addition to a bachelor’s in business administration.
In the past, students were more interested in technology, Pfiffer said
“That was a hot area that’s waned a bit,” Pfiffer said. “Accounting has replaced tech in the eyes of a lot of students.”
There are jobs available for accounting students even if they don’t go into professional accounting, according to Pfiffer.
“Law enforcement agencies such as the FBI hire accounting majors, and some of our accounting students go on to law school,” Pfiffer said.
Chapman’s freshman class has 40 students with an accounting major, up from 25 a couple years ago, he said.
The Big Four accounting firms,Deloitte & Touche LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers LLP,say they’re doing a lot of hiring, especially because of Sarbanes-Oxley.
“We’re aggressively recruiting new people into the firm at all levels, primarily for audit-related work,” said Sally Anderson, managing partner of the Irvine office of Ernst & Young.
All four firms have big operations in Orange County.
Behind the crunch is Sarbanes-Oxley’s Section 404, which requires annual reports to detail and evaluate a company’s financial reporting controls and procedures. Bigger companies have to show they’re in compliance with Section 404 for this year’s annual results.
While Sarbanes-Oxley-related work will taper off starting next year, accounting firm officials say they still expect plenty of work ahead, meaning more jobs for accounting graduates in the next several years.
This year public companies with market values of $75 million or more must comply with Section 404. Public companies worth less than that have to comply by the end of 2005, with a lot of that compliance work likely going to smaller accounting firms as the Big Four continue to have their hands full with big public companies.
Large public companies going through Section 404 compliance this year will have to fix problems and evaluate their systems next year and beyond, said Steve Rapattoni, head of Santa Monica-based Stonefield Josephson Inc.’s Irvine office.
That could help spur more hiring at smaller accounting firms.
“Remediation and continued evaluation of controls will be ongoing, and that may limit the Big Four in coming back into an arena where they’ve decided to disengage from a number of their clientele,” Rapattoni said.
The University of California, Irvine, is seeing more interest in accounting at the undergraduate and graduate levels. The university’s Graduate School of Management for the first time this fall began offering an undergraduate accounting minor.
“Our accounting minor is limited to 80 students but we had 300 apply,” said Denise Patrick, UCI’s associate director of undergraduate student affairs. “It was so competitive the students we admitted had an average GPA of 3.5. Some plan to go with the Big Four into auditing, while others are looking to go into accounting divisions with corporations.”
The accounting minor gives students the nine courses they need to sit for the exams to earn a certified public accountant distinction. UCI’s Graduate School of Management also offers accounting electives for its graduate students, as well as required core courses in financial accounting.
“Enrollment in the accounting electives is double what it was five years ago, as is the interest level shown in the required courses,” UCI assistant professor Barbara Lougee said.
Accounting scandals at Enron Corp. and others also spurred interest in accounting in the past few years.
“Students are asking a lot more questions in class,they’re excited now about learning about financial accounting whereas five years ago, they were not,” Lougee said. “They want to know how and why companies manipulate numbers.”
California State University, Fullerton’s College of Business and Economics also has seen an accounting enrollment bump in the past few years.
The school has 900 undergraduates with accounting majors, with 100 students going after master’s in accounting or master’s in business administration. Three years ago, the school had 700 students in account and 61 in its MBA program.
“Older students are telling younger students how strong the job market is,” said Betty Chavis, Cal State Fullerton’s accounting department chair. “And we have accounting firms in the OC area becoming more involved in recruiting students.”
Cal State Fullerton plans to build a new building to house its business school. The growing program now is housed in the university’s Langsdorf Hall, also home to its admissions and records operations.
