IPA Asks: What Is The Definition Of A Public Accounting Firm?

What makes a public accounting firm unique from other businesses? For more than 20 years, IPA’s definition of a public accounting firm for ranking purposes has been: A public accounting firm must be able to show/report/confirm (on IPA’s survey form) a percentage of attest fees (A&A) in order to be considered for ranking on the Top 100, Best of the Best, etc.

Successful firm models of all kinds have emerged which challenges that definition. IPA asked our readers for assistance with this debate and below, we highlight the responses. Of the respondents, 37% were partners/owners at IPA Top 100 firms; 51.9% were partners/owners at non-IPA Top 100 firms; 3.7% were association executives; and 7.4% were consultants to the profession.

Q. If a firm reports NO fees/revenue generated from A&A, would you consider it to be a ‘public accounting firm’?    

Yes: 17%     No: 83%

Q. If a firm that reports NO A&A fees/revenue, should they be included in the rankings of IPA Top 100 accounting firms, the Top 200 accounting firms, and other accolades such as an IPA Best of the Best firms?  

Yes: 8%     No: 92%

Q. If you do NOT consider a firm with NO A&A fees a “public accounting firm,” at what percentage of A&A fees would you consider them a “public accounting firm?”

At least 5% of revenues: 20%; At least 10% of revenues: 24%; At least 15% of revenues: 8%; At least 20% of revenues: 32%; More than 25% revenues: 16%

Q. Many firms are branching into successful business models that look nothing like the traditional public accounting firm of the past. Should their fees/revenue from non-accounting-oriented services be included in the firm’s total fees/revenue for ranking purposes in the IPA Top 100, etc.? 

Yes: 47%     No: 37%     It Depends: 16%