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In the News: CPAs Say Presidential Election Will Have an Impact on Business Planning

Shutterstock_304155794It’s election season in the U.S. – perhaps you’ve heard?

As we inch closer to the picking our next president, the AICPA recently conducted a survey of CPAs who serve as CEOs, CFOs, controllers and other leadership positions in companies to learn their thoughts on the potential impact of the election on their businesses.

According to the survey, nearly two in three (64 percent) of business leaders said that the election will impact business planning forecasting or budgeting for the next fiscal year. Survey respondents also said that the election ranked fourth in overall impact, behind changes in economic conditions, outlook for their specific industries, and interest rates and borrowing cost.

A CFO.com article quoted Arleen Thomas, AICPA's senior vice president for management accounting and global markets, as saying: "Company executives are clearly monitoring the potential business impact of the presidential election. But, overall economic conditions and challenges for their particular industries are weighing more heavily in their calculations right now, and that's likely why we're seeing little election-cycle impact on such key categories as hiring or capital spending."

Also noted by CFO.com, 81 percent of respondents said the election is not a consideration in staffing and that they plan to continue hiring at their current pace. That is compared to 13 percent who will defer hiring until after the election, five percent who will reduce hiring prior to the election, and one percent who will increase hiring before Election Day. 

Reporting on the survey, The Business Record noted that the perceived impact of the election on businesses was greater than the potential for volatility in equity markets and was tied in with potential ramifications of the strong dollar.

An article from the Washington bureau of The Business Journals noted that more than half of those surveyed said the election will not be a factor in their capital spending plans. Only 10 percent said they would wait on the election results before deciding whether to spend more money on growing their businesses.

Other findings of the survey:

* Eight percent of companies will reduce capital expenditures prior to the election.

* Only two percent of companies will increase capital spending before the election.

The election impact questions were included in the first quarter AICPA Economic Outlook Survey, which released its general results in March. The survey was conducted Feb. 6–24, 2016, and included 540 qualified responses from CPAs who hold leadership positions within their companies. The overall margin of error is less than three percentage points. A copy of the full report can be found on aicpa.org.

-James Schiavone, Senior Manager – Public Relations, American Institute of CPAs

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