Why Do People Say Accounting is Recession Proof? And is it?

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Discussion Overview

The discussion revolves around the question of whether accounting is truly recession-proof, exploring the dynamics of supply and demand for accounting services during economic downturns. Participants examine the legal requirements for accounting and how these may influence the demand for accounting work in various economic conditions.

Discussion Character

  • Debate/contested
  • Conceptual clarification

Main Points Raised

  • Some participants question if accounting is recession-proof, noting that during a recession, businesses may be stagnant and fewer new businesses start up.
  • There are legal requirements for businesses to perform accounting tasks, which some argue creates a consistent demand for accounting services regardless of economic conditions.
  • It is suggested that all businesses require accounting functions, as it is fundamental to business operations, irrespective of their success.
  • However, a participant points out that while legal requirements drive the need for accounting, businesses may still adjust their hiring practices based on the economic situation, indicating that accounting is not entirely immune to recessions.
  • Concerns are raised about the potential impact of economic downturns on hiring for accounting graduates and the possibility of layoffs in accounting firms during past crises, such as the 2008 global economic crisis.

Areas of Agreement / Disagreement

Participants express differing views on the extent to which accounting can be considered recession-proof. While some emphasize the legal requirements that sustain demand, others highlight the economic realities that can affect hiring and employment in the accounting sector.

Contextual Notes

Participants reference historical economic events, such as the 2008 global economic crisis, to illustrate their points, but there is no consensus on the overall resilience of accounting during recessions.

kyphysics
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Very curious.

Is there a supply and demand imbalance?

When there is a recession and businesses are stagnant and new ones aren't starting up, how do accountants still get good work?
 
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I feel like your question is incomplete. Are you asking if accounting is recession-proof?
 
kyphysics said:
Very curious.

Is there a supply and demand imbalance?

When there is a recession and businesses are stagnant and new ones aren't starting up, how do accountants still get good work?

Companies need accounting. Profit/loss makes no difference.
 
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Hey kyphysics.

There are legal requirements for businesses to do accounting related tasks and this is independent (in many ways) of the economics of markets and nation states.

This requirement drives the needs for many accounting functions - and the businesses/organizations that provide them.
 
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All businesses need accounting functions, whether they are successful or not. It is the language of business.
 
chiro said:
Hey kyphysics.

There are legal requirements for businesses to do accounting related tasks and this is independent (in many ways) of the economics of markets and nation states.

This requirement drives the needs for many accounting functions - and the businesses/organizations that provide them.

To kyphysics:

What chiro stated above is essentially correct -- accounting requirements are based on legal requirements for businesses (e.g. tax, reporting of profit/loss, etc.) which would drive the needs of the many accounting functions.

That being said, businesses/organizations that provide such services are not immune to prevailing economic situation, and may increase or decrease hiring (or even lay off) staff depending on the level of demand of said services for a organization, or the profitability of said organization. So accounting is not entirely "recession-proof" in that sense (my suspicion was that during the 2008 global economic crisis, hiring for new graduates in accounting programs would have plummeted or frozen out completely, and there would likely have been layoffs at major accounting firms).
 

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