Viewpoints

Benefits Of A CPA Firm's Affiliation With An Association

Steve Sacks

Originally Published In:
March 2008
Author: Steve Sacks, CPA

Over the past few years, as the Executive Director of Moore Stephens North America, an association of 57 member CPA firms based in the US, Canada and Mexico, I have witnessed a dramatic evolution in the relationship between clients and their CPA firm.

I am pleased to report that clients whose CPA firms are members in an accounting association — like Moore Stephens North America — are finding that their CPA is delivering more and better ways to help with complex compliance matters and regulatory issues, as well as implementing innovative ways to make their clients grow, protect their assets, and ultimately, become successful.

Unlike years ago, CPAs cannot simply audit financial statements and prepare annual tax returns; clients are looking for financial, operational, strategic and management guidance that goes beyond traditional accounting services.

Consequently, the practitioner has to decide whether to stay in his or her comfort zone and continue to provide the same services — or reposition the firm to offer additional services. This repositioning may involve developing a new niche service or purchasing a boutique firm to obtain the needed expertise, merging with a comparable or larger firm, or even participation in Associations where firms can access members for their industry or practice area experience and expertise, quickly and at reasonable fees.

Regardless of whether you are a public or privately held entity or a not-for-profit, the business of doing business is becoming increasingly more challenging and complicated. Between new auditing standards and of course the convergence of international accounting standards, rules promulgated by various regulatory bodies, a convoluted tax code, cross-border competition and an uncertain economic outlook, there has never been a greater need for your CPA firm to deliver more information, more experience, and more expertise.

Financial and regulatory complexities coupled with rising client expectations have stimulated Big 4 CPA firms to become bigger and more expensive. Regional firms are responding by pursuing mergers and acquisitions on their way to becoming dominant mega-regional firms. Even smaller firms are being forced to think more entrepreneurially.

Many non-Big 4 CPA firms are meeting client needs by affiliating with an accounting firm association composed of other CPA firms that share similarities in size and operating philosophy; and those that reflect a breadth and depth of industry and practice area expertise. Affiliation expands the ability to offer clients deeper and broader expertise, and provides for greater geographic coverage especially for those clients who have either multiple domestic locations or international operations.

For example, the firms in MSNA  have long been able to pool their complementary skill sets —— those that have either industry or technical practice niche expertise, or both. I should mention that when the net revenues of the MSNA firms (all 150 offices) are combined, it equates to almost $900 million. This makes MSNA the 6th largest association in the U.S.

Professional associations enable a collection of like-minded, intelligent CPAs who possess the necessary insight of business and trends to provide client organizations with a variety of ideas, positions and opinions. This ability enables MSNA member firms to offer services and expertise commensurate with the Big 4 and other large national firms without fee pressures and without a one-size-fits-all mindset. CFOs would be hard pressed to consider other, better ways to obtain collective expertise than through CPA firms that have affiliated with other firms whose belief in providing quality client service is similar to their own.

Associations also provide a flow of information sharing through conferences, webcasts, newsletters, discussion boards and special interest groups. The opportunity to translate knowledge gained into quality client service and advice is critical to helping institutions and businesses navigate the rough sea of changes resulting from many external factors.

I have also witnessed a transition in the role of the CPA from the over-stereotyped bookkeeper/tax specialist to that of the CPA as a trusted advisor. To quote Tom Bonadio, Managing Partner of The Bonadio Group, “In order to better serve clients and help both individuals and companies thrive in this fast-paced and ever-changing financial world, CPAs must evolve from merely purveyors of compliance services to trusted advisors to their clients.”

As Tom points out, “The key word here is trust, as there must be a bond between client, CPA and the resources and capabilities of their firm that delivers the right combination of risk tolerance, comfort, and security.”

Associations are playing an important role in establishing and maintaining the trusted advisor relationship by being a conduit to services, experiences and expertise that go beyond any single firm’s capabilities.

Lower fees than a Big 4 firm, greater access to experience and expertise, and expanded geographic coverage are just a few of the reasons you should work with a CPA firm that is in an Association. I am convinced that regardless of entity type or size, your CPA firm’s membership in an association can be of great benefit to your clients from compliance expertise to value-added business advice.

Disclaimer: The Bonadio Group provides the information in Viewpoints for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in Viewpoints are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.