Managing the Fast-Paced World of Accounting

NJBIZ, Feb 19, 2007 by McConville, Jim

As the recently appointed managing partner of PricewaterhouseCoopers' (PwC) Florham Park office, Kenneth K. Sharkey oversees about 1,000 employees. A 21-year veteran of PwC, Sharkey has undertaken a broad range of accounting projects and been a dose observer of major changes in the accounting industry. One of the biggest challenges that accounting now has to grapple with is the Sarbanes-Oxley Act the federal law that has reshaped the guidelines for conducting audits of publicly held companies. Sharkey discussed the impact of Sarbanes-Oxley and other changes in accounting with NJBIZ Staff Writer Jim McConville.

NJBIZ: What will be your main role as managing partner?

Sharkey: I view it largely as managing the office and the operations of the New Jersey-Florham Park practice, but largely for all of New Jersey. There are around 1,000 people in the office, so it's really a focal point for them. About 650 are in insurance, which is the accounting and auditing piece of the practice. About 100 are in the advisory practice and about 200 in the tax practice.

NJBIZ: What type of accounting services do you provide for your clients?

Sharkey: It runs the gamut with the three groups that we have here. It includes providing basic accounting and auditing guidance to public companies via audits, as well as technical accounting advice on specific transactions. With tax issues, it's helping our clients through a complex tax transaction, IRS audits and reviews and tax planning strategies. Our advisory service is largely for data management, human resource issues, systems implementation and assistance or restructuring.

NJBIZ: With accounting now offering a whole menu of financial services, has the business grown, client-wise, for firms such as PricewaterhouseCoopers?

Sharkey: Sarbanes-Oxley has increased everybody's business. Not only have the Big Four accounting firms grown, but so have so-called second-tier firms, or boutique shops. Clearly, the accounting auditing side has grown because we now have to report under Sarbanes-Oxley And we have to report up to the PCAOB [Public Company Accounting Oversight Board] as well.

NJBIZ: Has Sarbanes-Oxley and the recent spate of high-profile corporate corruption cases put more pressure on companies and accountants?

Sharkey: It has definitely put accountancy more in the spotlight. Along with that, we have to rebuild some of the credibility. I think that we have been doing that over the past few years. At the end of the day, it all comes down to trust. Being able to trust the independence of the public accounting firm that you are using; [being able to] trust the integrity and ethics of the people that are on the team; and, obviously, we have to trust our clients.

NJBIZ: Has technology made accounting, finance and auditing easier or more complicated?

Sharkey: Previously a lot of things were done by paper. Now our entire audit mediodology is computer based-all of our accounting staff uses computers throughout the whole process. From an efficiency standard, it's allowed people to communicate a lot better, especially when you are on an international project. And now with wireless technology you can be anywhere and be able to pull up information and data to help the client out.

NJBIZ: You've been with PricewaterhouseCoopers for 21 years. How did you start out and what accounting areas have you worked in?

Sharkey: I started in 1985 in Philadelphia and worked there for seven years. Then I worked in the national office in New York for three years. I then spent a few years in Prague, Czech Republic, where I did work on InfoCom. There were a lot of inbound foreign investments, especially in wire and wireless to replace the old communist-era equipment. It was really fascinating because it was all state-of-the art technology. I finally came back here to New Jersey where I have been for the last seven years.

NJBIZ: How have these varied assignments affected your public accounting experience?

Sharkey: I've done technology companies, info-com companies, entertainment and media companies, steel companies and othertypes of manufacturing. I really have run the gamut and I've kind of settled into technology-what we call TICE-Technology Information-Communication and Entertainment media. The job I had before the position as office managing partner was running our TICE, or technology info-com practice, for the NewY ork-metro market.

NJBIZ: You've stayed with one company throughout your career. Is that unusual these days?

Sharkey: Obviously, there's a lot of turnover in this profession. There are a lot of work hours, but there are lots of rewards. Some people tend to stay with one company. But we do routinely have 15 percent turnover each year. The industry as a whole has that, but that's probably been a historical turnover rate for the past 20 years. There isn't any one model for the accounting industry. Right now accounting is in a pretty steady state. Most of the partners that I work with have all been here 20 to 30 years.