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Accountants riding the Sarbanes-Oxley wave

By Thomas Watterson, Globe Correspondent, 10/10/04

Globe Staff Photo/David L. Ryan Gregory Natalucci is surrounded by work at Vitale, Caturano & Co. in Boston.

To anyone who ever said ''I want to be an accountant when I grow up,'' your time has come.

Over the past two years, accountants and other employees at Iron Mountain Inc., the Boston-based records-management company, have put in over 40,000 extra hours of work, estimates Jean Bua, the company's corporate controller and chief accounting officer.

Those hours were needed to make sure the company met the requirements of the 2002 Sarbanes-Oxley Act, passed after accounting scandals at several companies, including Enron, WorldCom, and Tyco.

Iron Mountain also has had to hire people to help its clients meet the law's record-keeping requirements.

''We have hired more individuals to serve our customers, because we're getting more demand for staffers who understand records management,'' Bua said.

Beginning Nov. 15, the Sarbanes-Oxley Act will require that annual reports of public companies worth more than $75 million include an ''internal control report.''

The report will state that the company has put auditing controls in place to make sure its financial reporting is accurate and ethical, and that it has tested the effectiveness of those controls.

For companies worth less than $75 million, annual reports issued after July 15, 2005, must include the internal control report.

Already, the law has created thousands of jobs and opened up opportunities for both experienced and newly minted accountants, as well as for information technology specialists, observers say.

Sarbanes-Oxley is ''the single most wide-sweeping piece of legislation affecting the accounting profession in my 30 years in the business,'' said William Hayes, president of the New England district at Robert Half International, a financial staffing firm. ''It's affected all levels, depending on the size and internal structure of the company.''

For example, Hayes said, companies and external auditors need accountants with at least three to five years of experience to handle the relatively challenging work related to Sarbanes-Oxley. In many cases, however, these people have been promoted at their own companies or accounting firms, which has opened up new entry-level positions.

''It's a very good year to be graduating from college,'' said David Clarkson, head of human resources at Vitale, Caturano & Co., a Boston accounting firm.

''We're recruiting in more schools than we have over the last several years,'' he said. ''We've added several schools to our list of recruiting, and we've dedicated quite a bit of time from our partners and managers to work with those schools, teaching classes, giving presentations. I was at two schools yesterday giving presentations.''

George Krull, chairman of the education committee at the American Institute of Certified Public Accountants, said the time is right for anyone considering an accounting career.

''Since these corporate scandals hit, accounting has become of interest to a lot of college students, as well as high school students. We've had a 17 percent increase in accounting majors over the last three years at universities.''

While Sarbanes-Oxley is creating jobs for accountants, ''the biggest shortage that appears to exist right now is in the area of IT auditors,'' said Jay Thibodeau, associate professor of accountancy at Bentley College in Waltham. ''These are the people who are able to complete testing plans for the technology infrastructure that supports the internal control systems.''

IT specialists ''are just impossible to find right now,'' said Hank Galligan, a partner in the assurance practice in the Boston office of BDO Seidman LLP. ''Sarbanes is all about internal controls. There just haven't been enough people that focused on that.''

Some have compared Sarbanes-Oxley compliance efforts to the Year 2000 (Y2K) scramble, which benefited technology companies and their employees for a couple of years. Others point out that these new regulations are not a one-time phenomenon.

''Year 2000 compliance had consulting legs of about a year and a half or two years,'' Thibodeau recalled. ''But then all the work associated with the year 2000 went away. That's not the case here.''

For the first couple of years, it will take more effort - and more hours - to get companies and auditors up to speed on Sarbanes-Oxley and get all the systems working properly, he said.

But ''on an annual basis, these accounting statements will have to be issued, and the external auditors have to go in and test the operational effectiveness of the internal control procedures every year,'' he said. ''This work isn't going to go away.''

To keep people from defecting to other accounting firms and corporations, raises averaging 10 percent or more are being given to people with at least three to seven years of experience.

''If you don't address the financial compensation issues that have come in the last 18 to 24 months, you're vulnerable to losing good people,'' Hayes said.

''We've always given our senior [accountants] bigger raises than the rest of the staff because the seniors have become more valuable,'' said Richard Caturano, president and managing partner at Vitale, Caturano.

''There's been a shortage of seniors ever since I can remember. It's just more pronounced this year, so a lot of firms are scrambling to keep up.''

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