A regional accounting firm recently announced that it sold its financial outsourcing solutions practice to another accounting firm. The outsourcing group provides internal auditing and compliance services, primarily to financial institutions.  A stated reason for the sale was that independence regulations restrict many companies from using the same accounting firm to provide both external audit and internal audit services, and the growth of the group was limited in the regional firm by these restrictions given the firm’s growing number of financial institution audit clients. I wonder what else influenced the sale, and if the sale is indicative of a trend of divestment of practice areas by accounting firms? As more and more firms establish affiliates and specialized practice groups, it would make sense that firms would continue to evaluate their profitability and whether it pays to divest. Businesses are constantly evaluating their units, so why shouldn’t accounting firms? Am I talking about apples and oranges, as most firms are looking to recruit and retain staff? Maybe, but I think firms, especially the larger ones, are increasingly applying a corporate business philosophy to how they operate. There are consultants that match up firms for mergers, so why can’t these consultants also act as the brokers for a transfer of a firm’s practice group or affiliate? You also might see more firms being broken up more by practice areas, with the staff from each practice area joining different firms because of the greater value that can be obtained in contrast with the dissolving firm merging with one firm. The accounting firm is an evolving business model. Consolidators, technology, independence requirements, and globalization are just a few of the factors driving the changes that influence firms differently, often by the size and location of the firm, as well as by the competition the firm is up against. Some firms are being very creative and thinking outside the box so why shouldn’t firms, when appropriate, consider and explore all available options?

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access