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CPAs and Consultants. Risks Faced in Accountants Professional Liability. Martin W. Terpstra, CPA, CFE Partner, Forensic and Litigation Services. The Accounting Profession. The Big 4 The National Firms The Consolidators Alternative Practice Structure The Super-Regionals - PowerPoint PPT Presentation

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  • CPAs and Consultants

  • Risks Faced in Accountants Professional Liability

    Martin W. Terpstra, CPA, CFEPartner, Forensic and Litigation Services

  • The Accounting Profession

    The Big 4The National FirmsThe Consolidators Alternative Practice StructureThe Super-RegionalsThe Large Local FirmsThe Tax Prep FirmsSmall Firms and Sole Practitioners

  • The Big 41 Deloitte; $8.8 billion2 PricewaterhouseCoopers; $6.9 billion3 Ernst & Young; $6.9 billion4 KPMG; $4.8 billionThese firms audit most of the Fortune billionThese firms are international in scopeThey are now audit driven

  • The National Firms6 Grant Thornton; $940 million7 BDO Seidman; $558 millionAdding many public clients, growing fastTaking many risky engagements turned away by the Big 4Considered a merger possibility

  • The Consolidators5 RSM McGladrey; $1.3 billion national8 CBiz/MHM; $467 million scattered offices13 UHY; $242 million: NE, DET, STL, HOUAlternative practice structuresRSM purchased AmEx TBS in October 2005 RSM is owned by H&R BlockCBiZ is publically tradedFew public clients, little appetite for riskLooking to buy firms to fill in the mapUHY had two deals fall apart recently

  • The Super Regionals9 Crowe; $423 million: IL, IN, KY, MI, OH, TN10 BKD; $287 million: MO, KS, NB, AR, IN, KY11 Moss Adams; $271 million, West Coast12 Plante Moran; $243million: MI, IL, OH, TN14 Clifton; $198 million: Midwest, 15 states15 Virchow Krause; $182 million: WI, IL, MI, MN16 JH Cohn; $175 million: NJ, NY17 Dixon Hughes; $155 million, South18 Larson Allen; $140 million: MN, MO, PA, FL, AZ19 Reznick; $137 million: MD, VA, GA, IL, CA

  • The Large LocalsNew York 18 large local firmsChicago Blackman Kallick is the only large local leftMidwest a number of large state-wide firmsNortheast a number of large firms based in the metro areasMiami five large firmsSoutheast a number of large state-wide firmsSouthwest & West a number of large local firms

  • The Tax Prep FirmsH&R Block $2.3 billion, parent corporation of RSM McGladreyJackson Hewitt $650 millionLiberty Tax Services $66 million, founded by John Hewitt

  • Services OfferedAttest 86%Business Valuations 82%Litigation Services 78%Forensics and Fraud 77%Estates and Trusts 74%Mergers and Acquisitions 68%High Net Worth 62%Cost Segregation 54%

  • Clients ServedReal Estate 86%Manufacturing 78%Construction 69% A&AGProfessional Services 69%Nonprofit Organizations 65% A&AG Pension Plans 64% A&AGWholesalers and Distributors 64%Technology 56%Healthcare 50% A&AGGovernment 40% A&AG/GASB

    Source: Accounting Today Top Client Categories

  • CPAs and Consultants