All quiet on the reform front
The unprecedented reforms that have transformed the accounting sector in Hong Kong and nearby regions, which were sparked by the wave of high profile United States financial scandals including the collapse of Enron and WorldCom, are expected to subside, said senior officials in the industry.
Some in the field also believed that the staggering amount of regulatory changes were both a blessing and a curse.
'We have undergone nothing short of a revolution with accounting standards and regulations in the past five years,' said Eric Li Ka-cheung, former accounting sector representative to the Legislative Council.
'Although this has made our lives more complicated, it has created many jobs. It has created a tremendously wider field for accountants to apply their skills.'
He was referring to measures such as the adoption of the sophisticated International Financial Reporting Standards, the setting up of the Financial Reporting Council (FRC) and a general tightening of risk management functions for listed companies.
He said there were now many more accountants working in the regulatory sector than before. Many accountants had found jobs in listed companies that had to conform with the toughened corporate governance rules.
'Job-wise, I don't think we have seen a better time in accounting,' Mr Li said. 'Salary and prospects have been good, and most firms are short-handed.'
According to a recent survey by the South China Morning Post and research firm admanGo, accounting and auditing firms posted 1,529 job vacancies in the six largest recruitment publications in the first half of this year, a rise of 7.6 per cent, from 1,459 during the same time last year.
Mark Fong, president of the statutory Hong Kong Institute of Certified Public Accountants, said prospects had never been better for accountants, with firms paying premiums of up to 40 per cent annually in salaries to retain experienced employees because of a staff shortage. Salaries for fresh graduates had only risen by single digits.
Big Four firms, where work-wearied accountants are leaving their jobs for less stressful positions in listed companies, are turning to smaller firms to replace their depleted ranks.
This wage inflation from personnel poaching and rising office rents have hurt second-tier accounting firms which do not possess the mass to take on a corresponding increase in work to compensate. To make matters worse, second-tier accounting firms have found it hard to increase fees charged to clients which are usually composed of more cost-conscious local small and medium-sized businesses.
The resulting crunch in profit margins had hurt partners of smaller accounting firms, Mr Fong said.
'I see some smaller firms consolidating either by staff linking to form their own partnerships or by throwing in the towel and joining bigger companies,' he said. An alternative is for smaller accounting firms to act as boutiques, providing specialist services or advising a narrow industry.
He expected that the imbalance between supply and demand should hopefully be at least partially resolved by the rising standards of accountants coming from the mainland.
Mr Fong also expected changes in the regulatory landscape in Hong Kong to subside.
'There have been drastic and fundamental changes. Five years on there will probably be some fine-tuning, but I don't see fundamental changes.'
While it was difficult to predict what would happen, he said there might be some modifications at the recently established FRC, whose role was to investigate audit irregularities and strengthen compliance. He added that the mettle of the council had still to be tested.
Kelly Chan Yuen-sau, deputy president for the Association of Chartered Certified Accountants in Hong Kong, expected the accounting sector to continue its present boom for at least another three years.
Ms Chan said the accounting trade in general had grown more resilient against economic shocks over the past 10 years, as practitioners diversified their practice outside the lucrative financial services sectors into industries such as trading, manufacturing and retail.
She said many accounting professionals in the commercial sector were looking to diversify geographical risk by working with companies with operations outside Hong Kong.
Ms Chan said many accountants were updating their technical skills and becoming aware of the need to enhance their communication skills because they were increasingly being asked to deal with people from different nationalities.
Courses on subjects such as negotiation and how to create win-win situations would become more popular.