�Pay is definitely catching up at small and mid-sized public accountants,� says John Spinoza, head of the public accounting practice at recruiter Michael Page International. He adds: �Smaller firms competing for staff will sometimes even pay more than the Big Four.�

It�s a trend identified in the latest salary survey from rival recruiter Robert Half International. Based on analysis of thousands of job placements across its US offices, Robert Half is forecasting senior accountants at mid-sized firms will see base salaries leap nearly 9% in 2006. By comparison, it predicts colleagues at larger firms are set for a rise of just 4%.

Fred Getz, an executive director at Robert Half, says firms outside the top tier are raising pay to attract talent and retain existing employees. �Many of the smaller and midsized firms are also enhancing the benefits they provide and emphasising work/life balance programs,� he says.

Second-tier accounting firms have picked up numerous Big Four audit clients since Sarbanes-Oxley Act was passed in 2002. The Act prevents accounting firms from working on some consulting contracts for public auditing clients and has led to large firms dropping client contracts due to conflicts of interest.

Grant Thornton has been among the beneficiaries. In fiscal 2005 the second-tier firm reported a 29% increase in US revenues and hired 700 additional staff. Neil Lebovits, CPA, president and COO of Ajilon Finance, says, �Accountants� salaries are expected to go up 10% to 15% next year, more for attraction than retention. Companies and accounting firms are reporting double-digit growth in most major markets.�

Nevertheless, pay at small and mid-sized public accountants continues to lag the Big Four on average. In absolute terms, Robert Half says a senior accountant at a large firm can expect a salary between $85,000 to $130,000 in 2006. The range at mid-tier firms is considerably lower: $50,000 to $70,000 is the norm.

Roles in Demand

The most sought-after specialties nationwide, it says, are internal audit, general accounting, financial analysis, controller, tax accounting, accounts payable and receivable, and bookkeeping.

For the second consecutive year, corporate auditors can expect to see the strongest salary growth. IT auditors can expect the largest percentage increase in base compensation of any position in 2006, with average starting salaries forecast to rise 11.2% (to between $67,000 and $94,250 annually). Entry-level auditors at small companies (up to $25 million in sales) will see average starting salaries increase 9% (to $35,500 to $43,250 per year).

Public accounting firms are feeling the squeeze as well, raising salaries across the board as they compete with companies in the private sector for top accounting staff. Average starting salaries for entry-level accounting professionals at small firms are projected to climb 6.5% (to between $35,500 and $42,500).

Senior managers/directors at large firms (over $250 million in sales) should see a 4.2% increase in average starting salaries (to $85,500 to $130,000 annually). Senior accountants at mid-size firms ($25 million to $250 million in sales) will see base compensation rise from $50,000 to $70,000 (an increase of 8.8% over 2005).

Other Trends

Professional certifications can increase a candidate�s marketability, the guide says. The certified public accountant (CPA) designation is particularly valuable. Other respected designations include certified management accountant (CMA); certified internal auditor (CIA); certified payroll professional (CPP); certified credit executive (CCE); and certified information systems auditor (CISA).

Other projections by Robert Half for the coming year:

• Tax managers at midsize companies will see average starting salaries of $57,750 to $74,000 (up 4.6%).


• Bookkeepers can anticipate a 6.8% rise in base compensation.


• Entry-level accountants at midsize companies will see starting salaries go up by 4.1% (to $32,000 to $38,250)


• Mutual fund accountants should see a 4.7% gain in base compensation (to $38,000 to $51,250 annually).


• Accounts receivable/payable managers at small companies will see starting salaries rise 5.2% (to $33,750 to $41,500 annually).