They will do what they always do.
The B4 firms will split and all the non-CPA partners will go with the consulting side. The CPA partners will get some nice payout for letting the lucrative consulting work go. Audit and tax fees will rise because there will be no more consulting work to offset the low rates. Some of the less profitable clients will leave and the CPA partners will lay off staff accordingly. And then once the non-compete expires the audit/tax part will go right back into consulting.
I don't think a non-compete would be that long because most businesses don't think in terms that long, especially a professional services business like an accounting firm. I think three to five years would be more likely. And it would probably be closer to three than five.
In ten years time you would probably see 100% turnover of the partners. it would essentially be a new business.
See my comment here https://www.reddit.com/r/Accounting/comments/v7vk2t/is_audit_being_left_out_to_dry/ibmxtra/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&context=3 it will just be an impact for a few years until they restart the advisory/consulting practices
Bit late, but say they rebuild their consulting branch after the non-compete, would that make a transfer to advisory easier? Or would they build it up externally?
It might make audit more competitive because those firms will more often conclude that there are no independence issues when the consulting side is already working with a company. Same with consulting.
Audit salaries might decrease (even though they are already low). We won’t have fat consulting fees for the bottom line and therefore audit will become less desirable. This really really really sucks, I’m worried for the future
You know idk about it having any impact besides the obvious transitioning adjustments. CBIZ MHM has audit split under MHM and they are a top 10 firm with equal entry level non consulting tax and audit pay . I could be wrong but I think ppl are overly worried about the effects of this.
They will do what they always do. The B4 firms will split and all the non-CPA partners will go with the consulting side. The CPA partners will get some nice payout for letting the lucrative consulting work go. Audit and tax fees will rise because there will be no more consulting work to offset the low rates. Some of the less profitable clients will leave and the CPA partners will lay off staff accordingly. And then once the non-compete expires the audit/tax part will go right back into consulting.
And we don’t know when non-compete will end correct? It can be 10-20 or more years
I don't think a non-compete would be that long because most businesses don't think in terms that long, especially a professional services business like an accounting firm. I think three to five years would be more likely. And it would probably be closer to three than five. In ten years time you would probably see 100% turnover of the partners. it would essentially be a new business.
The cap Gemini non compete was around five years. CapGemini was still subletting in a few EY offices when advisory was really building up at EY
See my comment here https://www.reddit.com/r/Accounting/comments/v7vk2t/is_audit_being_left_out_to_dry/ibmxtra/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&context=3 it will just be an impact for a few years until they restart the advisory/consulting practices
Bit late, but say they rebuild their consulting branch after the non-compete, would that make a transfer to advisory easier? Or would they build it up externally?
It might make audit more competitive because those firms will more often conclude that there are no independence issues when the consulting side is already working with a company. Same with consulting.
Audit salaries might decrease (even though they are already low). We won’t have fat consulting fees for the bottom line and therefore audit will become less desirable. This really really really sucks, I’m worried for the future
Not for me I believe. I’m on federal practice at big4
You know idk about it having any impact besides the obvious transitioning adjustments. CBIZ MHM has audit split under MHM and they are a top 10 firm with equal entry level non consulting tax and audit pay . I could be wrong but I think ppl are overly worried about the effects of this.