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To Most Accounting Students, Small Accounting Firms Don’t Exist

Small accounting firms

Here’s a fun article by Marc Rosenberg about “how totally uninformed young accountants are about CPA firms.” Now, you might think that this is one of those condescending KIDS TODAY posts, but it’s actually pretty self-aware. Rosenberg offers a picture of a profession that has an enormous perception problem, citing some pretty surprising examples. He quizzed some interns about aspects and here’s a look at the results:

There are 30 local CPA firms in metro Chicago with 30 or more personnel. Name 5 besides the six sponsoring firms of this program.

Result:  9 of the 11 interns could not name even one firm.  The other two named one firm each.

Message to local firms:  Almost no one on college campuses knows who you are.  If you want to attract the best and the brightest, you better get active on campuses.

If you’re an intern, this isn’t a big deal. It’s possible, maybe even likely, for those six firms to hire those eleven interns, so they don’t need to know the names of any other firms. On the other hand, this is an atrocious result for any of the other 20+ firms in the Chicago area.

Here are a couple more fun quiz question results:

How many total work hours a year do you think a typical staff person at a CPA firm works?
Intern’s response:  2,600, almost 20% higher than the actual of 2,241.

Rosenberg writes, “The CPA firm industry is stuck with an undeserved reputation as sweat-shops,” and you can blame the Big 4 for that. They are sweatshops and a lot of small accounting firms have partners whose entire careers are built on that kind of culture.

Then there’s this doozy:

How much do you think typical local CPA firm partners in Chicago earn?
Intern response:  $184,000 – that’s not a misprint!  Actual in 2015 was $410,000.

Whoa, now that could be an issue.

Since I’m one to point fingers, I’ll gladly put the blame for these misconceptions on the firms’ leaders. The vast majority of accounting students don’t know what the hell they’re doing. They ended up in this field either because they “like math” or because their parents recommended it. That’s the extent of their knowledge. But I suspect accounting firms are full of partners who believe their exemplary work speaks for itself and should magically attract in the best and brightest talent in all the land.

That wishful thinking has resulted in the situation that exists now: A bunch of small accounting firms who claim there’s a dearth of talent when in fact there’s talent everywhere. To some of these firms, the situation calls for its own throwback episode of Unsolved Mysteries. WHERE IS THE TALENT? WHY DID THE TALENT DISAPPEAR? WILL THE TALENT EVER RETURN? CAN WE STILL CONTACT THE TALENT?

Small accounting firms need to take their cues from the Big 4 on this. The Big 4 have been yapping about how great they are to professors for decades, so naturally the professors are yapping to students and the students are yapping to each other. It’s all Big 4 yapping all the time. Until small firms get used to talking about themselves, no accounting students will either; and the only thing worse than everyone talking about you, is no one talking about you.