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Publicly owned accounting firm consolidators: executive benefit expectations

Mark Edward Pickering (Swinburne University, Melbourne, Australia)

Journal of Accounting & Organizational Change

ISSN: 1832-5912

Article publication date: 16 March 2012

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Abstract

Purpose

The purpose of this paper is to explore the company‐related benefits expected by executives of public accounting companies consolidating accounting practices and the implications of these expectations for company performance.

Design/methodology/approach

This paper uses a case study approach involving the review of publicly available information and interviews with executives and senior professionals of two Australian, publicly‐owned accounting companies. Analysis of the financial performance of the two companies was performed using data from annual reports.

Findings

Executives predominantly expected to achieve revenue growth and efficiency benefits through consolidation and change in ownership form. In one of the cases these benefit expectations emerged over the course of the acquisition program. The paper highlights the difficulty in estimating and realising the magnitude, timing and associated costs of consolidation benefits and the consequences of failure to achieve expected benefits; also it suggests advantages in a more conservative consolidation approach.

Research limitations/implications

Care is required generalising findings to other professions and other geographic jurisdictions.

Practical implications

This paper has implications for entrepreneurs and executives consolidating professional service firms, partners considering selling their firms and investors in publicly‐owned professional service firms.

Originality/value

This is the first study to consider the benefits expected by executives of the recently emerged, publicly‐owned accounting companies and the associated costs of implementation. The paper highlights opportunities for researchers provided by the availability of data for publicly‐owned accounting and other professional service firms.

Keywords

Citation

Pickering, M.E. (2012), "Publicly owned accounting firm consolidators: executive benefit expectations", Journal of Accounting & Organizational Change, Vol. 8 No. 1, pp. 85-119. https://doi.org/10.1108/18325911211205757

Publisher

:

Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited

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