September 23, 2021

Is the Big 5 Returning to California?

Hahahahaha. No, of course not. HOWEVER, Moss Adams is getting close to usurping one of the Big 4 in number of CalCPA members and that may give some people the impression that a regional firm is making waves in California. 

A reader sent us the following:

According to CalCPA and some number crunching, as of 1/1/13, Moss Adams LLP should have more (registered) professionals than KPMG in the State of California. In the July 2012 top 50 California CPA firm rankings by CalCPA, KPMG and Moss Adams LLP had 388 and 348 registered professionals, respectively. But, as of 1/1/13, Moss Adams LLP merged with Mohler Nixon & Willams, which had 53 registered professionals according to CalCPA. That gives Moss Adams LLP a total of 401 (or close to) CA registered professionals as of 1/1/13.
In their next ranking, we may see KPMG be listed at #5.
Well, not quite. If you look at the July 2012 edition of CalCPA news, those numbers don't quite shake out as our reader says. Here's a clip of KPMG and MA:
So (s)he was off by two members but managed to get to 401 somehow (which is correct with MNW's 53 CalCPA members). NBD. Moss would still move past KPMG.
But really, this isn't anything of note. For starters, KPMG probably has a large number of advisory professionals that are not CalCPA members. Between their seven California offices, it's conceivable that the House of Klynveld may have more non-CPA client serving employees than Moss' entire California payroll.
Secondly, this was from July, so it won't include any of the first-year associates that started in the fall or any experienced hires for the last six months of 2012. It's likely that KPMG had great numbers in both these groups, thus more CPAs and more CalCPA members.
We asked the CalCPA for the numbers as of 12/31/12, however, we have not heard back. Neither Moss Adams or KPMG responded to our requests for their CalCPA membership numbers.
To see a regional firm compete with the Big 4 firm is not that odd of an occurrence. Here in Denver, Ehrhardt Keefe Steiner & Hottman is a similar example. They are locally-owned firm with a big presence in the Rocky Mountain region; they employ a few hundred people and have no problem regulaarly picking off a clients from the Big 4. 
But they still don't have the resources or clout that a Big 4 enjoys (right or wrong). EKS&H won't be picking up the next exploding VC-backed company in Boulder any more than MA will grabbing the next one in Silicon Valley. If they do, it's only a matter of time before that company's investment bankers convince them that they need to upgrade to a Big 4 audit to satisfy deep-pocketed investors.
It's a nice sign to see a firm MA doing so well, but it doesn't matter if they jump KPMG in CalCPA membership. It doesn't change the name on the sign. Or their status as a Big or Global or whatever.

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