Brief Excerpt from Industry Overview Chapter:
Companies in this industry provide services such as auditing, bookkeeping, payroll processing, and tax return preparation. Leading companies include ADP, H&R Block, and Paychex (all based in the US). Major companies that have international operations include the "Big Four" accounting firms: Ernst & Young and PricewaterhouseCoopers (both based in the UK); as well as Deloitte Tohmatsu Group (Japan); and KPMG (the Netherlands).
Demand for accounting services depends on new business formations, the increasing complexity of corporate business, and personal income. The profitability of individual firms depends on the right mix of services and effective marketing. Large firms have advantages in providing wider ranges of services to large corporate clients and having the resources to serve customers with many locations. Small firms can compete effectively by specializing and providing superior service. The US industry is fragmented: the 50 largest US companies account for just less than 50% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Offices of certified accountants account for 68% of US industry revenue; followed by payroll services that account for 14%; and tax preparation services accounting for about 5%. Other services include management consulting, financial statement review, and services related to computerized accounting systems services accounts for 13%. Some accountants have branched into accounting-related information technology consulting, business consulting, and personal financial planning. Small business owners often rely heavily on their accounting firms for advice.
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