Survey Says

CPAs positive on economy, but wary of tariffs

Virginia CPAs still see a positive future for the U.S. and Virginia economies. But a year after President Donald Trump’s tax reform bill became law, opinions are split on the effects of his policies, according to the VSCPA’s 2019 Virginia Economic Expectations Survey.

Seventy-five percent of the 249 CPA respondents to the survey (a partnership with Virginia Business magazine) agreed that the U.S. economy is moving in a positive direction. Questions about the Virginia economy provoked a similar degree of optimism, with 60 percent of respondents taking an overall positive view of the Virginia economy and another 24 percent describing their outlook as “balanced.” When the same question was posed regarding respondents’ specific industries, 65 percent said they were somewhat optimistic or very optimistic and another 18 percent said they had a balanced outlook. (The 25 percent of respondents who answered “not applicable” to that particular question were not included in the numerator nor the denominator of that calculation.)

A plurality of respondents (36 percent) cited health care costs as the most pressing issue facing Virginia. Infrastructure (21 percent) and education (11 percent) were the only other issues that got more than 10 percent of the vote. Health care costs (84 percent) and the tax climate (57 percent) were the runaway winners as the issues that most need to be addressed in the 2019 General Assembly session. Those two items were also the top two vote-getters in the 2018 survey, with health care costs down 2 percent and the tax climate — perhaps because of the uncertainty surrounding tax reform implementation — up 9 percent.

Unsurprisingly, respondents reported a positive impact on their businesses from tax reform. (Agree or disagree with the bill, there’s a reason why David Kupstas referred to it as the “Accountants and Actuaries Full Employment Act” in these pages in May.) Fifty-eight percent of respondents said tax reform had been good for their business, with another 34 percent saying it had not had an impact. However, just 55 percent said they had gotten the needed clarification on the law.

Respondents were less bullish on Trump’s trade policy. Fifty-six percent said U.S. trade policy would have a negative effect on the economy, although just 23 percent said their clients would feel that negative impact.

One anonymous respondent voiced his or her concerns about the impact of U.S. trade policy as such: “As long as we go toward the goal of balanced trade, I'm happy. We are still at a deficit right now, and tariffs will have a short-term negative impact on us, but will open up the floor for international negotiations for fair trade to happen.” Another rated Trump’s decisions as an overall positive for the economy, but said that tariffs would destroy more wealth than they would create.

Technology was a theme in the 2019 survey, with questions on cybersecurity, automation and artificial intelligence (AI). Eighty-two percent of respondents rated cybersecurity as a significant concern for the accounting profession, with just one respondent saying it was not a concern at all. One in five respondents (21 percent) said their organization had been the victim of a cyberattack in the past year.

Respondents were less concerned with automation and AI. A plurality of respondents (49 percent) said those technologies would be “somewhat disruptive” to the accounting industry, with just 13 percent rating them as “very disruptive.”

Based on the results of the survey, firms and companies are tentatively looking to expand. Forty-one percent of respondents directly said their company would expand, 44 percent said their organizations would increase compensation based on economic conditions and 41 percent said their organizations would increase hiring. However, “staying the same” was the top answer for each of the 12 categories included in the survey.

Further analysis of the results can be found in the November issue of Virginia Business, including regionspecific interviews with five VSCPA members: Scott Moulden, CPA, shareholder at Yount, Hyde & Barbour in Winchester; Lori Overholt, CPA, president & CEO at VSA Resorts in Virginia Beach; John Reynolds, CPA, senior accountant with block.one in Blacksburg; Gary Wallace, CPA, partner at Keiter in Glen Allen; and Andrew Youhas, CPA, managing partner at Youhas & Associates in Arlington. n