The revenue growth rates reported by a majority of Top 100 accounting firms are the highest reported since 2000, according to the Public Accounting Report (PAR), published by tax and accounting law information, software and services provider CCH. Revenue per partner also rose to $2.5 million, an increase of 12.7 percent over 2005, while revenues per professional rose 4.9 percent, to $306, 083, PAR reports.
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The CCH PAR 2006 Top 100 found an average growth rate of 16.5 percent, up from 9.1 percent from 2005. Continuing the trend of previous years, firms outside the Big Four posted the strongest overall results, with revenue growing an average of 21.9 percent. The Big Four firms reported revenue rates of 14.7 percent.
“Judging from the financial results posted by the Top 100, life is very good for these public accounting firms,” said Jonathan Hamilton, Public Accounting Report editor. “With companies facing greater regulation and relying more on their accounting firms for a broader array of services, the Top 100 definitely appear to be responding to these demands and reaping the benefits.”
This year’s PAR saw some reshuffling among the top 10 firms, which are:
- Deloitte & Touche USA LLP (New York, N.Y.)
- Ernst & Young (New York, N.Y.)
- PricewaterhouseCoopers (New York, N.Y.)
- KPMG (New York, N.Y.)
- RSM McGladrey (Minneapolis, Minn.)
- Grant Thornton (Chicago, Ill.)
- BDO Seidman (Chicago, Ill.)
- Crowe Group (Indianapolis, Ind.)
- CBIZ/Mayer Hoffman McCann (Cleveland, Ohio and Leawood, Kan.)
- BKD (Springfield, Missouri)
RSM McGladrey reported a growth rate of 59.5 percent, the highest among the PAR Top 100 and moved into the No. 5 spot as a result of its October 2005 acquisition of American Express Tax and Business Services. The Crowe Group moved up a spot to No. 8, after reporting double-digit growth for five straight years.
Beers & Cutler of Vienna, Va., which posted a growth rate exceeding 30 percent, achieved the biggest jump in rankings, moving to No. 44 this year, from No. 62 in 2005. Other firms posting growth rates of more than 30 percent include: WithumSmith+Brown (Princeton, N.J.), Anchin, Block & Anchin (New York), Weiser (New York), and Stout Causey & Horning (Hunt Valley, Md.) all in the Northwest region; as well as Armanio McKenna (San Ramon, Calif.) in the West region. The largest change in revenue growth, 24.1 percent, was reported by Doeren Mayhew (Troy, Mich.) . Weaver and Tidwell of Fort Worth, Texas, reported revenue growth of 16.8 percent.
PAR also found that firms in the Northwest and West regions experienced average growth rates of 18.6 percent, the highest among all the regions. The overall average Top 100 growth rate in 2006 was 16.5 percent. Firms in the Southeast region posted a 14.1 percent revenue growth rate, with firms in the North Central region posting a 13.6 growth rate and the South Central region averaged an 11 percent growth in revenue.
CCH’s Public Accounting Report, published since 1978, is an independent, biweekly newsletter for accounting professionals. PAR’s annual Top 100 survey, which has been conducted since 1992, analyzes data from firms’ most recently completed fiscal year and ranks them by U.S. net revenue. Net revenue is used rather than gross revenue, as gross revenue can be misleading because firms write off varying amounts of their fees.
To order copies, contact CCH at 800-248-3248.