Every CFO knows the Big Four firms. Less familiar are the scores of accountancies that rank below the top four in revenues — but well above the sales of much smaller regional firms.
Like the Big Four, this band of second-tier accountancies, known in the industry as Group B firms, provide auditing and tax work to publicly traded companies in the United States. Unlike the Big Four, however, the Group B accounting firms typically don’t possess a true global reach. Instead, many of the firms rely on partnerships with local accountants to service multinational clients.
Of the hundreds of firms classified as Group B accountancies, six stand out — both in revenues and the number of publicly traded clients. With the help of Arthur Bowman, editor of Bowman’s Accounting Report, CFO.com has compiled snapshot profiles of these firms. We call them the Second Six.
International Affiliation: BDO International
Total Sales Audited: $27.9 billion
Total Clients Audited: 280
Average Sales per Client: $99.7 million
Strengths: Tax services have become an important market for BDO in the past few years.
Skinny: With Denis Field becoming chairman, company settled down after period of management turmoil, says Bowman… BDO Seidman, Grant Thornton, and McGladrey & Pullen all trying to become dominant provider of audit services for middle market companies — that is, businesses with annual revenues between $500 million and $1 billion. Right now, BDO Seidman and Grant Thornton appear headed for showdown… Firm tops Second Six in average sales per customer — key figure.
International Affiliation: Grant Thornton International
Total Sales Audited: $29.6 billion
Total Clients Audited: 344
Average Sales per Client: $86 million
Strengths: Construction, consumer and industrial products, government, nonprofit, real estate.
Skinny: Went through long period of management stability in the 1980s and 1990s. Also saw some turnover in top management turnover — until current CEO Ed Nusbaum took over. Since then Nusbaum has become something of a visible spokesman for auditing profession as a whole… Sale of firm’s IT consulting business to Hitachi few years ago gave the company cash to expand… University of Delaware’s Charles Elson says if any of Second Six were to jump to Big Four, Thornton is most likely candidate. But Nusbaum tells CFO.com that firm will stick to middle-market focus.
McGladrey & Pullen
International Affiliation: RSM
Total Sales Audited: $4.7 billion
Total Clients Audited: 95
Average Sales per Client ($ Millions): $49.6 million
Strengths: Financial institutions, manufacturing, wholesale distribution, government, nonprofit, healthcare construction, agriculture.