Little did Josh Malarsky know five years ago when he began pursuing his master's degree in accounting that firms would be hiring in such unprecedented numbers.
But that was before federal legislation tightening auditing and accounting rules and regulations turned the profession on its head. Known as the Sarbanes-Oxley Act, the law and its stiffer controls have caused accounting firms and corporations to ratchet up staffing numbers.
The Big Four firms that audit public companies mostly are searching for seniorlevel talent to plug the holes created by the new requirements. But the degree of the hiring extends to even the smaller firms and new graduates, as Malarsky can attest.
"From what I can see, firms are hiring like crazy to get on top of this Sarbanes-Oxley work," he said. "Almost everyone had an internship in my class between the fourth and fifth year, and I think everyone had a job nailed down by the time school started."
Malarsky, a spring graduate of Indiana University, joined the Real Estate Division of locally based Katz Sapper & Miller LLP earlier this month. He will finish taking the four-part certified public accounting exam in October.
As a smaller firm, Katz Sapper's clientele consists mainly of private companies that do not have to file financial reports with the Securities and Exchange Commission. Scandals at Enron Corp. and MCI WorldCom prompted federal legislators to draft Sarbanes-Oxley.
The law, however, has created a trickledown effect that would make Ronald Reagan proud. Because larger accounting firms that audit public companies are focusing their efforts on those companies, they no longer have as much time to serve private clients. In other cases, their audits have become too expensive for smaller companies to afford.
"They're good-sized companies that you would recognize, and all of a sudden, they're out there looking for auditors," said Steve Gaylord, partner in charge of assurance services who leads Katz Sapper's recruiting effort.
404 is the reason
Under Sarbanes-Oxley, performing internal audit and consulting work for the same company is viewed as a conflict of interest and is no longer permitted. The changes have caused some firms to pick up additional work shed by rivals.
Section 404 of the act caused much of the anguish. It requires corporations to assess the internal accounting controls they have in place to ensure their financial reporting is accurate and reliable-and requires accounting firms to vouch for those controls.
Many public companies had to devote thousands of employee hours and millions of dollars to comply with the controversial new rule by the Dec. 31 deadline. In turn, corporations, as well as accounting firms, are seeking additional help and often competing with one another.
"Did  make extra work? Absolutely," said William Brunner, chief financial officer at locally based First Indiana Bank. "We were a step ahead. However, that does not mean it was a walk in the park."
Parent First Indiana Corp. is a public company. But as a financial institution, it was already heavily regulated, making it better prepared for Sarbanes-Oxley, Brunner said. The bank met its obligations with existing staff.
Local accounting firm Crowe Chizek & Co. LLC counts more than 100 public companies for which it provides audit or consulting services. Because the scope of the audits has increased, the firm needs more people to conduct the work. Crowe, like most accounting firms, hires college graduates from the recruiting trips it makes to campuses. But to meet the additional demands of Sarbanes-Oxley, the firm is seeking professionals with experience, said Kevin McGrath, partner in charge of the financial institutions practice who oversees recruiting efforts.
"We need to have some people who have on-the-job experience already," he said. "The legislation has caught everybody short."
Giannine Paul, branch manager for the Indianapolis Accountemps office, said her California-based staffing agency has tracked a 12-percent increase in auditor salaries during the past year.
"There's a war on talent at large and small firms," she said. "This is going to continue for years to come. There is no slowdown in this."
On a national level, the increase in demand for talent has led salaries to increase as much as 20 percent for experienced managers, according to a report from CareerJournal.com, The Wall Street Journal's Web site targeted toward executives, managers and professionals. And entry-level salaries at some firms are in the upper-$40,000 range.
The gap in starting pay among large and small firms is closing. Gaylord at Katz Sapper said his firm needs to offer a competitive salary if it wants to attract the top graduates.
Unlike Paul, however, McGrath at Crowe Chizek and Michael Becher, managing partner at the local office of New York-based Deloitte & Touche, think the torrid hiring pace will subside.
Becher said employment demand should level off as both accounting firms and corporations get a better grip on the new requirements.
One reason for the dearth in experienced talent is that the accounting profession fell out of favor with students.
In 1991, about 60,000 students graduated with accounting degrees, according to the American Institute of Certified Public Accountants. By 2003, the number had fallen to 50,000.
The AICPA now says accounting is the top major among business students, largely due to the attention the scandals have put on the profession.
Gaylord at Katz Sapper concurred.
"Since Enron," he said, "we've become a lot more interesting to the public."