Smaller public companies have always had a difficult time filling their internal accounting function with qualified personnel, which can sometimes lead to the disclosure of material weaknesses in internal controls. Once a material weakness is identified, remedying it can take significant effort, including potentially hiring additional personnel and more training for existing staff. It could also lead to a more detailed annual audit process that could not only result in additional audit costs, but also late filings with the SEC. And now it looks as though there will be even fewer accountants available to fill these important roles.

According to the Wall Street Journal Article cited below, fewer people are entering the accounting field, resulting in more accounting positions being open for longer periods of time, even for larger companies. This lack of qualified personnel could result in higher wages for accountants overall, but could also have a significant adverse ripple effect for smaller companies, making it even more difficult and costly for them to hire and retain qualified personnel or to remediate internal control weaknesses.

Public companies, but especially smaller public companies, should plan on having extended search times to fill in-house accounting positions and consider whether training staff or hiring consultants might be sufficient to maintain or remediate internal controls.