Small Firms: Think Big!
The Sarbanes-Oxley Act has created new requirements for public companies, spurring greater demand for professional services and for a range of engagements that offer opportunities to well-positioned smaller firms. In a series of member surveys conducted by AICPA Custom Publishing and the AICPA's CPA Insider[TM] weekly e newsletter this year, nearly 87 percent of small firm CPAs thought the economy would continue improving over the next 12 months--vs. 84 percent of all CPAs. That's a jump of 8.4 percent from this time a year ago. By contrast, the optimism meter moved just 4.6 percent for the profession at large. "Sarbanes Oxley has created practice opportunities that are available to every firm that is in a major market," says Richard Caturano, CPA, president of Boston-based Vitale, Caturano & Co. To take advantage of them, however, firms likely will have to make an investment--either in people, office tools, software, training and marketing or some or all of these. Since the Sarbanes Oxley Act prevents auditors from helping their public company clients with much of the compliance work, there is an opportunity for the "second CPA firm" to perform internal control testing and review internal control systems. In addition, there will be increased demand for business valuation and tax work. How to capitalize Finns best able to capitalize on these prospects are those in or with access to cities that are home to a number of public companies. They should determine which public companies are nearby and what services they might need, and which large audit firms in the area might be seeking second CPA firms--both midsize and smaller firms--to whom they can refer projects. In many cases, CPAs will have only to reorient their practices or expand their knowledge and create a marketing strategy to get some of this work. CPAs should be aware that professionals in other fields are offering services such as internal audit engagements. Smaller firms planning to seek such engagements may have to invest in staff training and marketing. Help clients find you A professional Web site A March 2004 poll of CPA Insider readers found that almost two-thirds of small CPA firms (under 10 employees) did not have professional Web sites, whereas more than half of those with over 10 employees did so. Further, of small firms that did not already have their own Web sites, more than 86 percent said that would be interested in doing so--if they could find easy, low-cost technology solutions to help them. Listing in a directory of CPA firms The same reader poll also found that small firms (under 10 employees) were far more likely than mid-size and large firms to be interested in listing their services in a directory of accounting firms--especially if the basic listing was free. Tools to help you get there More than half (51.6%) of members polled recently by CPA Insider editors said they were planning to increase spending on office productivity tools this year, up 12.3 percent from this time a year ago. In the small office/home office sector, CPAs were even more optimistic than last year. Nearly 52 percent planned to increase spending, a rate nearly 15 percent higher than said they would increase spending at this juncture a year ago. CPAs lead all professionals when it comes to adopting technology Several recent studies have shown that CPAs may be the heaviest users--and earliest adopters--of technology solutions among all U.S. professionals. While highly concerned about security, privacy, ROI and disaster recovery, a recent study conducted by CPA Insider and AICPA Custom Publishing found that 60 percent of respondents would be spending more on new hardware and software over the next 12 to 18 months. …