Strategic Alliances In Public Accounting Firms

Huldah A. Ryan, Charles J. Cante, Robert G. Strittmatter, Vincent J. Calluzzo, Caitlin R. Maxwell


The decade of the 1990s saw the emergence of the concept of the strategic alliance and its significant growth in both numbers and diversity of alliance areas as well as its impact on business performance in terms of new service or product introductions and/or increases in revenue, profit, volume or market share.  Public accounting (CPA) firms have participated in such alliances especially during times of staffing shortages and seasonal peak periods, but their participation has not been well reported in the literature.  This study examines the state of strategic alliances in public accounting firms.  The topic is particularly relevant now in light of the greater responsibilities placed on management since the passage of the Sarbanes-Oxley Act, and the issuance recently of two Statements of Financial Accounting Standards (SFAS No. 157 in 2006 and SFAS No. 159 in 2007) which give companies the option to report certain financial assets and liabilities at fair value.  These additional responsibilities may include the restructuring and restatement of financial reports to more accurately reflect the financial position and results of operations of a business.  This has resulted in a greater demand for accounting services which some CPA firms were not able to provide.  The findings reveal that participation in strategic alliances enables accounting firms to pool their resources, increase revenues, build a larger knowledge support system to serve a wider clientele, and compete with larger firms both nationally and on a global basis.

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