Accounting professionals are feeling better than they have in months about the U.S. economy, but their outlook is still far more cautious than when the pandemic began.

The fourth quarter Business & Industry Economic Outlook Survey showed 37% of the respondents expressed optimism about the economy, a 13 point increase from the Q3 survey.

Conducted every quarter by the Association of International Certified Professional Accountants, the survey found the 740 CFOs, CEOs and controllers were also more optimistic about the global economy. The global outlook improved from 17% in Q3 to 27% in the current quarter.

Though still wary about the continuing impact of the COVID pandemic, almost half (49%) were optimistic about the prospects for their own organization; 47% said they have plans to expand their business.

Looking ahead to next year, as a group the respondents saw revenue and profits improving. Where the 2Q and 3Q surveys showed the CPAs expecting declines in both areas of as much as 5.5%, now they expect revenue to improve by 1.2% and profit by a modest 0.2%.

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Headcount is expected to increase by 0.8%, also an improvement from the previous two quarters. 17% of the respondents said they have too few workers and plan to hire. In the Q1 survey, 26% said that. Another 17% said they also were understaffed, but were reluctant to hire right now. 51% said they were right-sized.

Overall, the CPA Outlook Index, a composite of nine survey components, rose for the second quarter, coming in at 62. That’s a 24 point improvement since Q2, yet still below the optimism of the first quarter of the year when the index was at a high 76.

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COVID Is Accelerating the CFO Evolution

Chief Financial Officers have been playing an ever greater role in business management and strategy since the title was first used in the 1960s.

The evolution of CFO from keeper of the records and reporter of numbers to strategist has been underway for years, accelerated by the Great Recession and now the COVID-19 pandemic.

A report on this evolution says the pandemic has expanded the role of CFOs as businesses struggle to maintain their equilibrium in the face of unprecedented changes. While CFOs believe their role is growing in significance, CEOs are even more certain.

The survey that forms a key part of the report by the Institute of Management Accountants and the Association of Chartered Certified Accountants found 72% of financial managers at all levels saying the CFO role will “increase or increase significantly” over the next few years. 82% of CEOs see that happening.

The pandemic, the survey respondents said, has had an impact on that evolution and on how it has altered their view of the role. Curiously, CFOs themselves see the effect as more modest compared to CEOs. Where just over a quarter of CFOs perceived the impact of COVID as changing their views of the CFO role completely or significantly, over 50% of CEOs said that.

Indeed, the survey participants said that for CEOs, leadership, strategic insight and ethics and trust are the most valued characteristics of CFOs. While the CFO respondents agreed these with the CEOs, they didn’t score them as high.They also saw characteristics such as customer centricity and global experience as much more valuable than did the CEOs.

In discussing the report with AccountingToday, IMA Vice President of Research and Policy Raef Lawson said that the survey and multiple roundtables with business leaders bears out the predictions made a decade ago about the changing role of financial leaders.

“We had predicted that the role of the CFO would be transitioning from financial reporting and stewardship to more of the strategic business partnership role, more engaged through external stakeholders. That’s all taken place. The interesting thing is that the pandemic seems to have just accelerated this change.”CFO of the Future chart.jpg

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