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A biannual new study shows some perceptions of the economy are improving.

The Center for Audit Quality's Fall 2022 Audit Partner Pulse Survey found almost 60% of audit partners expressed pessimism for the U.S. economy. However, the group's recent fall 2023 survey showed that overall pessimism dropped to 27%.

Julie Bell Lindsay, CEO of the center, explained audit partners are present in all public companies in the country. They are responsible for understanding risks and pressures affecting businesses and their industries.

"Certainly, the economic outlook is stronger than a year ago," Lindsay noted. "But auditors still see the potential for inflation, while it is falling, to significantly impact business operations over the next year."

Lindsay added that almost 70% of auditors see "inflationary effects" hitting businesses for over 12 months. She asserted businesses are being heavily affected by the country's current regulatory environment, with a majority saying the effects have been adverse, citing additional costs associated with compliance with new rules.

Lindsay acknowledged that despite the various challenges plaguing the business community, from cybersecurity to learning how to handle artificial intelligence better, the country finds itself in a "relatively strong position."

"The U.S. continues to have, I would say, the most liquid and strong capital markets in the world," Lindsay contended. "We are not without our challenges, but we seem to be coming out of the pandemic and an inflationary cycle in a fairly strong position."

According to the survey, companies' top three priorities are cost management, financial performance, and overall growth. Lindsay noted that while artificial intelligence was lower on the list of companies' priorities, it was high on their list of challenges because of data quality concerns and data security risks. Lindsay added companies across the country are also experiencing a need for more accounting and auditing professionals.

"It is not just getting talent into the companies," Lindsay stressed. "When you have less talent, that means the existing talent has to take on additional responsibilities, which can hurt retention."

While half of companies are focused on upskilling, the survey found one in three is working to increase compensation and workplace flexibility for current employees.