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February 3, 2023

Accounting News Roundup: Higher Salaries and Client-Mandated Diversity | 04.05.17

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Salaries

As accountants, you probably think that you’re going to earn more over the course of your career just based on your highly-sought-after skills. And it’s true, your skills allow you to demand more compensation, especially as you gain experience, but interestingly enough, where you work likely makes a big difference too.

Here’s a Bloomberg View column by Peter Orszag that discusses a study that “figure[d] out the wage premium associated with working at different companies” and the employer you choose has an even bigger difference than you think:

High-paying companies, they found, not only pay low- and medium-skilled workers more than others do, but are also significantly more likely to keep such workers moving up the wage distribution.

A low-skilled worker at the top end of the earnings distribution who is employed by a low-paying company earns an average of $67,000, compared with $73,000 at a top-paying firm. For high-skilled workers in the top part of the earnings distribution, the premium associated with working at a top-paying firm is even larger: The average wage is $81,000 at the bottom end and $143,000 at the top.

All companies like to say, “Our pay is competitive,” which might be true. It’s just that they pay competitively in the shallow end.

Diversity

Here’s an interesting article about how Facebook is requiring its outside law firms to be more diverse:

Facebook is requiring that women and ethnic minorities account for at least 33 percent of law firm teams working on its matters.

Numbers alone, however, are not enough, under a policy that went in effect on Saturday. Law firms must also show that they “actively identify and create clear and measurable leadership opportunities for women and minorities” when they represent the company in litigation and other legal matters.

The article also mentions that HP now requires “outside law firms to have at least one diverse so-called relationship partner” or  “[one] woman and one racially/ethnically diverse attorney each performing at least 10 percent of the billable hours worked on HP matters.”

I’ve not heard of companies requiring accounting firms to meet diversity thresholds, but perhaps law firms are whiter and duder? It’s hard to imagine something whiter and duder than accounting firms, particularly partners, but maybe the accounting profession’s lack of diversity pales in comparison to their legal brethren.

Some people might scoff at this idea, but the New York Times article quotes Facebook’s general counsel as saying, “Firms typically do what their clients want,” and he’s not wrong about that.

How’s tax reform coming along?

Well, it appears that it’s in the “all things are on the table until we say they’re not” stage:

The White House on Tuesday disavowed two controversial options for their planned overhaul of the tax code, after two Trump administration officials earlier in the day said the president’s team was exploring a value-added tax to raise government revenue.

One of those administration officials also earlier Tuesday said the White House was considering the creation of a carbon tax, but a Trump administration spokesperson later said that idea was also  no longer under consideration.

It has to be frustrating to work in an environment that constantly undermines what you’re trying to do. Or maybe it’s great! I’m sure some gluttons for punishment would enjoy it.

Previously, on Going Concern…

I wrote about Grant Thornton’s unlimited PTO and also a horrible boss at Fox News.

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