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Consolidation Ahead for Accounting Firms

Consolidation Ahead for Accounting Firms

by Rick Turoczy on August 28, 2006

The news isn’t all bad. Audit-related work and revenues tied to Sarbanes-Oxley legislation are expected to continue to escalate, especially among U.S. clients, and client investment in China is also expected to grow strongly, providing two bright spots in an otherwise less than rosy outlook for the future. Growth for 2006 is expected to be only 1.6 percent or $106.0 billion, however, growth is projected to increase to 4.7 percent or $111.0 in 2007, giving firms a reason for confidence.

“As the market economy slows down, professional service firms will slow incrementally as well,” Lawhon adds. “This speaks to new business for CPA [certified public accounting] firms, but what we do not believe will slow down is the shift of larger private clients away from the national firms and on to the larger regional and local firms. Due to the scarcity of resources, larger regional and local firms may have clients who migrate to smaller local firms and so on and so on.”

Consolidation Ahead for Accounting Firms

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