The article “Winning Over Mrs. Fisher” (JofA, July99, page 26) was very disturbing. I believe that, if the AICPA supports this consolidation trend, it is proof of the Institute’s continuing bias toward the larger firms. To support this opinion, I offer the following observations:
- Because many small firms do just a few audits, the cost of having a peer review performed is more than most can bear. It forces them to give up the auditing business even though the small firms can do as good a job as the big ones and, possibly, at a lower cost to clients.
- For the small firms that do government audits, the cost of required CPE can eat up most of the profits earned and make the jobs unprofitable.
Other concerns I have are with the consolidators buying CPA firms:
- Like large discount stores, they go into local markets and drive the small firms out of business.
- If publicly traded companies buy CPA firms, doesn’t that make everyone in the world eligible to own one? The number of people wanting to become CPAs will decrease, and the reason for this—I believe—is that an accountant generally earns the CPA designation to become a firm partner or stockholder. Why bother if one can just buy stock in one of the publicly traded firms and have the ability to sell at any time on the open market?
- How many of the consolidated firms will be willing to pay the higher wages that CPAs require when it may be easier to hire fewer CPAs and more paraprofessionals?
- How can the quality of work be maintained once the pressure kicks in to increase the bottom line?
- How can a CPA remain independent when pressure is applied to refer clients to other sections of the firm for products such as investments and financial planning or to have their pools cleaned and dogs walked?
Consolidations may be the wave of the future in our profession, but in my opinion they’re a sellout.
Kyla R. O’Dell, CPA