Tuesday, February 12, 2008

Tech CFOs Sweat Recruiting More than Credit

It's official. The challenge of recruiting accounting talent is bigger than the challenge of the credit crunch.

San Francisco's BDO Seidman, LLP questioned 100 chief financial officers at technology companies throughout the U.S. to find 38 percent believe the ability to recruit and retain talent is the greatest challenge they face for the coming year. Risk management (23 percent) was second, followed by access to capital (15 percent), financial reporting and corporate governance issues (14 percent) and foreign competition (9 percent).

As a group, CFOs in Silicon Valley were even more worried about talent management. A whopping 55 percent listed it as their greatest challenge for the year.

International accounting issues are also worrying the CFOs. Almost half (49 percent) say new accounting rules that allow foreign companies to use International Financial Reporting Standards (IFRS) without reconciling the figures to U.S. Generally Accepted Accounting Principles (GAAP) put their company at a competitive disadvantage.

Not surprisingly, the CFOs think GAAP's revenue recognition rules are better than IFRS' for technology companies. Nearly 70 percent of the CFOs prefer U.S. GAAP revenue recognition compared to 21 percent for IFRS. Yet, more than a third (38 percent) said they'd switch to IFRS if they could, to better compete with international firms.

The lack of concern over the credit crunch may be due to the fact only 27 percent of the CFOs think they'll be seeking additional capital in 2008. Among the Silicon Valley CFOs, 86 percent didn't expect to need a capital infusion this year.

These findings come from the BDO Seidman 2008 Technology Outlook Survey, which queried CFOs at companies in the software, hardware, telecommunications and Internet sub-industries with revenues ranging from more than $100 million to $15 billion including. The survey was conducted in January of 2008.

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