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Finally, the Other Audit Firms Pull Ahead

Grant Thornton scored a larger dollar increase (if I read the story correctly, it is not clear) than other firms for a recent period. They note these are not clients rejected by the Big Four but clients that switched from the Big Four. Note the client that helped get them there was a Chinese firm. 

Not  surprisingly the new CEO of GT is a Brit who has lived on three continents. 

So what, glad you asked. When I was an undergraduate shortly after Edison switched from direct to alternating current, there were the Big 8 Audit Firms. time winnowed those to six, and then whoops Arthur Andersen was gone and well am I missing one, we now have four large firms with over 50,000 firms. SARBOX meant those firms could not do audit and consulting so you guessed it, audit fees have more than doubled since SARBOX passed, well gee cost accounting wins again. 

The big firms work like this

If you are a Fortune 500.1000 firm you want our name on your audit
Guess what that costs a lot of money as our overhead is gosh awful and 
Our partners want to make as much money as your CEO
We pay the staff about $55K and work them so hard 90% quit in five years and we bill them out for over $200K

Okay that boys and girls is the business model for the large firms…

And so the day is beginning to arrive for the so called second tier firms, somewhere you might actually consider working. Take a look at the list on the link, sounds to me like there day is arriving. 

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4 responses to “Finally, the Other Audit Firms Pull Ahead”

  1. Tina C Avatar
    Tina C

    I think it would be fair to say that the second tier firms (and so on down the line) still expect long hours and don’t pay any better.
    I strongly urge students to be sure they know what they are getting into with Public Accounting – not everybody is cut out for it! and there is no shame in choosing a different path if it is more appealing to you. Anybody considering accounting as a career needs to research the various paths and choose one that matches their goals, expectations and personalities. Find out what it takes to “climb the ladder” in the areas you are interested in. Are you willing to work 60+ hour weeks? Are you willing to not have a life around deadlines? How will your kids (family) handle the schedule? (My elementary age kids know what April 15th and October 15th mean… and they know “deadline” means momma won’t be home much).

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  2. Dennis Elam Avatar
    Dennis Elam

    This is so well done I am going to put it up as its own post on the blog, thanks Tina.

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  3. Tina C Avatar
    Tina C

    Sometimes it makes me wonder if I shouldn’t pursue a graduate degree and go into teaching…. Are the hours any better?

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  4. Dennis Elam Avatar
    Dennis Elam

    Yes the hours are better but
    the deadlines are weekly
    the clients are more demanding
    and like tax, the authorities keep changing the rules. incredibly we are not using the same intermediate accounting book I used in the 1970s, how silly is that, the new ones have all these pictures and footnotes and something about this FASB PCAOB commmittee thing…

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