The just-released 2006 Rosenberg Associates MAP Survey found the accounting profession to be in the midst of its best year since 2000.The CPA industry posted revenue growth of 9.7 percent for 2005, up from 7 percent in 2004, according to the eighth annual survey of firms. The growth is the best since 2000, when firms saw an 11.8 percent increase.
The survey’s founder and creator, Marc Rosenberg, said that the only thing standing in the way of even further growth for the accounting profession is the shortage of staffers to complete the workload.
“Smaller firms throughout the country tell us they could have obtained more business but that they didn’t go after it because they wouldn’t have anyone to get the work done,” Rosenberg said, in a statement.
The survey breaks its 281 survey participants into three revenue categories, each with varying revenue growth rates:
- Firms with more than $10 million in net fees grew 15.8 percent (per partner income was up 21.5 percent from a year ago, to $456,000);
- Firms with net fees between $2 million and $10 million grew 8.3 percent over last (per partner income was up 9.4 percent, to $277,000); and,
- Firms with net fees below $2 million grew 4.4 percent (per partner income was up 6.7 percent, to $191,000).
Correspondingly, only 3 percent of the largest firms had fee increases less than 4 percent, but more than a quarter of midsized firms and nearly half of small firms had fee increases below 4 percent. That trend is also borne out in staffing levels -- the largest firms increased their headcount between 5 and 10 percent in 2005. However, midsized firms struggled to maintain staffing levels between 2004 and 2005, and small firms actually suffered a decline in employees.Among the survey’s other findings:
- Outsourcing of tax returns appears to not be catching on with firms; only 8 percent reported plans to outsource a significant amount of returns next year, a percentage that held steady from a year ago;
- The trickle-down effect of work related to the Sarbanes-Oxley Act continues, though it’s the larger firms primarily reporting a favorable impact on revenues;
- The average valuation of goodwill for internal buy-out purposes remained unchanged at 80 percent;
- About half of the partners at firms are over the age of 50; and,
- While formulas are still the dominant choice for partner compensation, there appears to be a movement among larger firms to the compensation committee approach.
The complete survey can be purchased for $300. More information is available at www.rosenbergassoc.com, or by calling (847) 251-7100.
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