Presented by:Winnie Cheung, Chief Executive Venue:Hong Kong Institute of CPAs Date:23 July 2009
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Transcript of Presented by:Winnie Cheung, Chief Executive Venue:Hong Kong Institute of CPAs Date:23 July 2009
Presented by : Winnie Cheung, Chief Executive
Venue : Hong Kong Institute of CPAs
Date : 23 July 2009
Financial Crisis Survey 2009
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
2
Research Methodology & Objectives
The Institute invited members to participate in an online survey, hosted by Cimigo - 2,606 online surveys were completed in April
The main objectives of the research were as follows:
Understand perceptions of the profession amongst Accountants
Understand the impact of the current economic downturn, and how this financial crisis has affected views of the profession
Ultimately, the research findings will help the Institute to increase their understanding towards their members’ perceptions and will provide valuable
insights
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3
Respondent Profiles
2,606 online interviews were completed in total– 27% of survey respondents are Professional Accountants in Practice (PAIP)– 73% of survey respondents are Professional Accountants in Business (PAIB)
Majority of respondents were seniors in their company– PAIP: 57% Partner/Director/Sole Practitioner, 25% Manager– PAIB: 28% CFO/COO, 21% Team Leader, 20% Divisional Manager
Respondents have a long history in Accounting – average time as CPA is 16 years
Survey respondents skewed toward Male (59%), especially PAIP (67% vs 57% for PAIB)
High average monthly income: HK$54,860 (PAIP, HK$57,667 & PAIB HK$53,853)
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
4
Survey Subjects:
• Career Choices
• Career Prospects, Rewards & Remunerations
• Surviving the Financial Crisis
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
5
Ref: A1, A2
831
33
55Definitely will
Probably will
Unsure
Probably will not
Definitely will not
Motivation to Continue with a Career in Accounting• Vast majority of HKICPA members are committed to the industry: 88% are likely to continue with a career in
Accounting. Job security, esteem and prospects for advancement are the top 3 motivators for staying in the profession
Top 2 boxes 88
Bottom 2 boxes 4
Mean 4.37Base: All CPAs 2,606
Likeliness to continuecareer in accounting
%
N=2,291
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
6Ref: A1, A2
Motivation to Continue with a Career in Accounting• Vast majority of HKICPA members are committed to the industry: 88% are likely to continue with a career in Accounting. Job
security, esteem and prospects for advancement are the top 3 motivators for staying in the profession
Agreement of motivation areas
22 39 31 8
4 26 54 17
4 22 52 23
3 18 56 23
2 18 55 25
2 16 57 25
3 16 55 26
3 15 54 29
Disagree Somewhat agree Agree Strongly agree
Base: Those CPAs who definitely/ probably will continue a long term accounting career 2,291
%
Overseas working opportunities
Esteem and standing of the profession
Job satisfaction of a professional career in
accounting
Job security
Career prospects/ advancement
Remuneration package
Variety and interest in the work
Career/ training opportunities
3.08
3.05
3.05
3.03
3.00
2.93
2.84
2.25
Mean
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
7Ref: A3, A4
Impact of financial crisis on career choices • The financial crisis has impacted the career choices of over half of the HKICPA members who took part in the
survey, with 52% saying it has deterred their next career move. Concerns about job security is the major impact of the crisis
Base: All CPAs 2,606
Financial crisisdeterring next career move?
Reasons for deterring next career move
2
1
1
8
49
52
64
76
Base: Those CPAs who claimed financial crisis deterring next career move 1,347
%
Concern about job security
Financial burden
Others
Recruitment market is quiet
Yes52%
No48%
Going to retirement/ too old to change
Personal/ health/ family reasons
Other family members have lost job recently
Less attractive remuneration offered by
new employer
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
8Ref: A6, A7
Impact of Financial Crisis on PAIP Specialization
Base: All PAIP accountants 699
Expect to change toanother job specialization
Job specialization intend to change
2
22
3
34
5
5
5
8
8
917
21
Base: Those PAIPs who expect to change another job specialization as a consequence of the financial crisis 132
%
Business consulting
Corporate finance (Financing, M&A)
Internal risk control
Forensic accounting/ expert witness
Insolvency and corporate recovery
Company law compliance
IPO
Auditing and assurance
Operations and general administration
IT risk assurance and advisory
Corporate governance
Financial accounting and analysis/ reporting
Yes19%
No81%
Sales and marketing (new business development)
General management/ senior executive role
Others (each less than 2%)
• The majority of PAIP did not expect to change job specialization as a result of the financial crisis. For the 19% who did expect to change job specialization, Financial Accounting and Analysis/Reporting and Business Consulting were the Top 2 alternatives
• Expectation to change was highest amongst members with less experience in the field:
• <5 years 40% expect to change
• 5-10 20% expect to change
• > 10 years 16% expect to change
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9
Ref: A8, A9Base: All PAIB accountants1,907
Yes80%
No20%
Financial crisis affectingthe business sector
Yes9%
No91%
Expect to work inaccountancy firm/ practice
Impact of Financial Crisis on PAIB Business Sector - 1• Impacts of the financial crisis are more keenly felt at the business sector level – 80% of PAIB agree that the
crisis is affecting their sector
• However, the majority of PAIB do not think that their job role is so threatened by the crisis that they would have to consider a switch to PAIP status – it is more likely that they might have to consider switching to another industry
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
10Ref: A10, A11
Base: All PAIB accountants 1,907
Expect to changeto another industry
Industry intend to change
2
2
2
3
4
9
10
16
25
26
Base: Those PAIBs who expect to change to another industry as a consequence of the financial crisis 475
%
Other business services
Government administration
Finance and investment
Import/ export trade/ retail trade
Manufacturing
Real estate
Education
Banking (retail and commercial)
None
Yes25%
No75%
Business management and consultancy service
Others (each less than 2%)
Impact of Financial Crisis on PAIB Business Sector - 2• One quarter of PAIB expect to change industry as a result of the current financial crisis – other business
services, government administration and business management/consultancy the most likely destinations
• Expectation of change is highest amongst PAIB’s with the least amount of experience
• <3 years 48% expect to change
• 3-5 years 25% expect to change
• 5-10 30% expect to change
• > 10 years 24% expect to change
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11Ref: A12, A13
Attitudes to Working Overseas
Intend to reside and workoverseas in the next 5 years
Location intend to work overseas
1
*
1
1
3
3
4
5
7
10
65
Base: Those CPAs who have intention to reside and work overseas in next 5 years 589* less than 0.5%
%
China
Australia
Europe
Canada
Macau
U.S
Middle East
South America
Africa
Not specified
Asia (e.g. Japan, Korea, Singapore, India, Sri Lanka)
26
35
16
17
6
Definitely will
Probably will
Unsure
Probably will not
Definitely will not
Top 2 boxes 23
Bottom 2 boxes 51
Mean 2.62Base: All CPAs 2,606
%
N=589
• A quarter of the members who completed the survey have intentions to work overseas in the next 5 years, although the majority of this is a “probable” rather than “definite intent”. China is the most likely destination
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12
I'm not familiar with standards/ procedures in China
Ref: A14, A15
Working in China – Drivers & Barriers
Reasons for having intention to work in China
2
7
20
21
31
32
84
Base: Those CPAs who have intention to reside and work in China in next 5 years 382
%Better pay than in Hong Kong
Have family in Mainland China
Currently working in China
Others (each less than 2%)
More career opportunities than in Hong Kong
Like the opportunity to travel, experience new things
More responsibility at same stage of career
No choice in the matter - likely to be employer expectation
Reasons for not having intention to work in China
2
3
5
10
10
12
21
26
35
40
Base: Those CPAs who have intention to reside and work overseas but not in China in next 5 years 207
%
Lower pay than in Hong Kong
Family/ personal reasons
Country/ political/ law issue
Others (each less than 2%)
Health reasons - environment is not healthy
Concerned about quality of the accommodation
Fewer career opportunities than in Hong Kong
Don't speak Cantonese/ Mandarin
Already stationed in China in the past years
Gain more experience to work outside HK and China
• The main attraction of China is career opportunity – mentioned by 8 out of those who would consider relocating there in the next 5 years – new experiences, career progression & remuneration also factored
• Unfamiliarity with China Accounting Standards & procedures the main barrier, slightly ahead of concerns over pollution
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
13
Survey Subjects:
• Career Choices
• Career Prospects, Rewards & Remunerations
• Surviving the Financial Crisis
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
14
Ref: B1
Measuring Positive or Negative Career Expectations
17 33 40 9
8 29 55 8
4 28 60 8
4 19 62 15
3 19 66 12
2 15 71 12
214 71 13
214 69 14
214 63 21
18 65 26
Very negative Somewhat negative Somewhat positive Very positive
Base: All CPAs (exclude “Don’t know”)
%
Professional recognition
Long term job security
Social status relative to other careers
Financial reward (pay, benefits, leave etc)
Opportunity to travel
3.15
3.02
2.96
2.95
2.94
2.86
2.89
2.72
2.62
2.41
Mean
91 91
81 85
81 84
85 84
82 84
77 78
76 78
70 67
64 62
47 50
Total
PAIP PAIB% %
Very/ Somewhatpositive
91
84
84
84
83
78
77
68
63
49
Top 2%
2,578
2,530
2,527
2,569
2,523
2,559
2,518
2,503
2,431
2,571
Base
9
16
16
16
17
22
23
32
37
51
Bottom 2%
Overall prospects for a satisfying career
Mid term employment prospects (next two to five years in the profession)
Short term employment prospects (keeping your current job/ not being made
redundant)Fast track and opportunity for
advancement
Work/ life balance(reasonable working hours)
(695)
(689)
(684)
(691)
(681)
(691)
(679)
(671)
(661)
(693)
(1,883)
(1,841)
(1,843)
(1,878)
(1,842)
(1,868)
(1,839)
(1,832)
(1,770)
(1,878)
• Survey reveals that both PAIP and PAIB are mainly positive toward their career expectations. Accounting is viewed as a secure career with good long term prospects which also enjoys high social standing.
• The most negative aspect of the profession is the effect on work-life balance
Significantly higher than the other at 95% confidence level within subgroup
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15Ref: B6, B7, B8, B9
Most Recent Monthly Salary Review
Best description for mostrecent monthly salary review
7
2
10
2
433
37
24
44
+20% or greater increase
+16% to 20% increase
+11% to 15% increase
+6% to 10% increase
+1% to 5% increase
No change at all
-1% to 5% decrease
-6% to 10% decrease
-11% to 15% decrease
-15% or greater decrease
Had no salary review for more than a year
Mean 2.17Base: All CPAs 2,606
%
N=1,147
N=311
Yes23%
No77%
Salary increase due to promotion
Base: Those CPAs who have salary increase in most recent monthly review 1,147
Yes71%
No29%
Salary decrease due to the resultof company/ firm-wide cutbacks
Base: Those CPAs who have salary decrease in most recent monthly review 311
• The majority last had a salary review before 1st October 2008 – 66% in total, 69% PAIP and 65% PAIB
• 37% had no change in salary at last review and 7% have not had a review in the last year• Of the remainder, 44% received an increase and 12% had a decrease (mainly linked to company-wide
cutbacks
No Change
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16
• Majority view amongst both PAIP and PAIB is that there will no change to salary at the next review
• PAIP less expectant of a salary rise, compared with PAIP
Ref: B10
Expectation for Next Salary Review
713
2
23 13
53 4
54
54
53
54
2215
25
8672 22
11 2 11
+20% or greater increase
+16% to 20% increase
+11% to 15% increase
+6% to 10% increase
+1% to 5% increase
No change at all
-1% to 5% decrease
-6% to 10% decrease
-11% to 15% decrease
-15% or greater decrease
Total
% % %
PAIP PAIB
Base: All CPAs 2,606 699 1,907
Mean (%) +0.87 -0.39 +1.34
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17Ref: B2, B3, B4
Bonus for 2008
Base: All CPAs 2,606
Receive bonus in 2008
Yes48%
No43%
Not sure9%
Best description for bonus in 2008
10
30
1416
29
Mean (months) 1.38
%
Equivalent to less than half-month of basic monthly salary
Equivalent to more than two-month of basic monthly salary
Equivalent to 1.5 month to two-month of basic monthly salary
Equivalent to less than 1.5-month of basic monthly salary
Equivalent to half-month to one-month of basic monthly salary
More32%
Less44%
The same24%
Bonus comparison between 2007 and 2008
Base: Those CPAs who received bonus in 2008 1,247
Base: Those CPAs who received bonus in 2008 1,247
• 48% of the members surveyed had received their 2008 bonus – 43% did not, while 9% had been notified at the time the survey was completed. The average bonus worked out to 1.4 monthly salary
• Bonus was similar or lower than 2007 for two thirds of the members
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18Ref: C2
Most Liked Aspects of Profession
4
5
6
6
7
8
12
14
23
Base: All CPAs 2,606 699 1,907
%
Nature of the job
Total PAIP PAIB
29 20
11 15
14 11
9 7
4 8
8 6
7 6
3 5
3 5
%%
Job security
Job satisfaction/recognition
Remuneration package
Career prospects
Training opportunities
Challenging job
5-day week
Working environment
• Accountants surveyed like the very nature of their itself the best, and they are happy with the career they have chosen on the whole
• Other areas that please them are job security, remuneration, status as well as opportunities for training and career advancement
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
19Ref: C2
Least Liked Aspects of Profession
2
3
4
5
5
6
14
19
19
Base: All CPAs 2,606 699 1,907
%
Workload
Total PAIP PAIB
16 21
23 17
16 14
10 4
9 4
3 6
2 5
5 2
3 2
%%
Deadlines/time pressure
Long hours
Job challenges
Accounting Standards
Job nature
Working environment
Poor remuneration
No balanced life
• Workload is the least liked aspect of the profession, causing the most stress. This is especially true for PAIP• Contributing to the dislikes/stress are tight deadlines, long hours and the general challenges of the job• PAIP have a wider range of dislikes than PAIB
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20
Survey Subjects:
• Career Choices
• Career Prospects, Rewards & Remunerations
• Surviving the Financial Crisis
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
21Ref: D1
Estimated Recovery Time for the HK Economy
Mean (Years) 2.21 2.18 2.23
Base: All CPAs 2,606 699 1,907
Total% % %
PAIP PAIB
3 3 3
4 6
343322
1079
363837
41 40 42
5
Less than 1 year
One to less than two years
Two to less than three years
Three to less than four years
Four to less than five years
Five years or moreDon't know
Significantly higher than the other at 95% confidence level within subgroup
• General consensus between Accountants in Practice and in Business is that it will take roughly two years before the Hong Kong economy has recovered from the current financial crisis
• PAIB more cautious that PAIP in their estimation
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22
Ref: D2
Expected Effect of the Financial Crisis on Operations
1 3 41 47 8
1 3 38 46 12
111 29 44 14
*3 34 50 13
*5 26 52 17
*3 21 52 24
*313 52 32
Definitely for the w orse Somew hat for the w orse No change Somew hat for the better Definitely for the better
Base: All CPAs 2,606 699 1,907* less than 0.5%
%
Overall corporate governance
Capital structure
Board structure and function
4.12
3.95
3.80
3.71
3.59
3.65
3.59
Mean
80 85
74 76
68 69
65 62
58 59
58 58
56 55
Total PAIP PAIB% %
Definitely/Somewhat
for the better
84
76
69
62
59
58
55
Top 2%
3
3
5
3
13
4
4
Bottom 2%
Internal controls and risk management
Reporting of related party transactions and relationships
Remuneration policy and directors and senior management's
remuneration packages
Nomination of committee's composition, role and functions
Significantly higher than the other at 95% confidence level within subgroup
• There is an expectation that the financial crisis will have a positive effect on operations, most of all in terms of Internal Controls/Risk Management and Overall Corporate Controls – expectations that both of these will definitely change for the better
• PAIB have stronger expectation that internal controls will improve for the better, suggesting a greater need for such change in their establishments
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
23Ref: D3
Thoughts on Dealing with the Financial Crisis
2
2
4
4
7
23
33
35
51
Base: All CPAs 2,606 699 1,907
%
Cost reductions/Cost controls
Total PAIP PAIB
48 52
35 35
33 33
21 23
6 8
3 4
3 4
2 2
2 1
%%
Focus on customer service/competitiveness
Encourage & motivate staff
Review & reorganize company structure
Review debt structure/increase cash holdings
Look for investment opportunities
Stay calm/don’t panic
Strong leadership/fast action
Mergers & Acquisitions
• The Number 1 suggestion for dealing effectively with the financial crisis is to look for cost-savings & cost efficiencies – closing unprofitable areas, salary reductions and job cuts all seen as effective quick wins
• Secondary suggestions were to focus internally: be more competitive, encourage staff to be part of the business and take an opportunity to reorganize the company to work more effectively
© Hong Kong Institute of Certified Public Accountants Ltd. All rights reserved.
24Ref: D6
Expected/Work Life Change Resulting from the Crisis
1
1
3
7
8
17
26
53
60
Base: All CPAs 2,606 699 1,907* less than 0.5%
%
Greater financial pressure
Changes of remuneration package
Workload and work pressure lessening
Reducing working hours and more free time
Transfer to work in other offices in China
Workload and work pressure increasing
No change
Increasing working hours
Chance to be layoff
Total PAIP PAIB
57 61
56 52
31 23
27 13
7 8
7 7
2 4
1 1
* 1
%%
Others (each less than 1%)
Significantly higher than the other at 95% confidence level within subgroup
• The greatest expected effect of the financial crisis for the Accountancy profession is greater financial pressure on companies and changes to employees remuneration packages
• PAIP much more likely than PAIB to expect a reduction in working hours and work pressure