Accounting Services in the U.S. INDUSTRY ANALYSIS ON ACCOUNTING

Accounting Overview (NAICS 54121c)  Firms in this industry hire certified auditors to audit the accounting records of public and private organizations. Certified public accountants (CPA’s), provides variety of accounting services such as preparing financial statements, developing budgets, tax planning and consulting services.

Accounting History  Luca Pacioli was the first to describe the system of debits and credits in the journals and ledgers, which is how we function the basis of the accounting system today. Account Industry begin to involve itself during the Great Depression, which led to the creation of the Securities and Exchange Commission in The American Institute of Certified Public Accountants are responsible for setting the accounting standards until Then Financial Accounting Standards Board was established and in the late 20th century the accounting firms expanded their services from auditing function to several forms of consulting. In 2001 the Enron scandal had a major effect on how we use SAP in Accounting. The Enron scandal demonstrated how there weren’t division amongst the powers, which create the separation of powers within the Accounting aspect (Investopedia.com).

Industry Overview  The Accounting Services industry has experienced a good amount of growth over the past five years. There have been some effects that caused recession such as bankruptcy and restricting services provided for the business downturn. The revenue for Accounting is 92 billion, the annual growth is 3.9%, employment is 525,765, and businesses is 94,705 (IBISWORLD.com).

Top Three Companies  The top three market share of companies are DDT surveillance systems and loss prevention solutions for the hospitality and retail industries. Ernst and Young (EY) is a multinational professional services firm. KMPG, the audit, tax and advisory firm the U.S member firm of KPMG International Cooperative.

Competitive Landscape  The demand for accounting services depends on new business formations, the increasing complexity of corporate business, and personal income (hoovers.com). Large firms have more advantages when providing accounting services to large corporate clients and being able to have more resources. Smaller firms can compete by providing superior services.

Marketing Strategy . Strategy #1 is paying for expertise, meaning creating valuable practice with services that not every CPA could offer, such as wanting a barrier to entry. For example investing into hiring someone who was head of a trader at a fund and had contacts with attorneys and others in the field.  Strategy #2 is turning a windfall into an opportunity, such as having to prepare U.S. personal income tax returns for firms that were international. Provided cross border and expatriate tax services for corporate and personal clients.  Strategy #3 investing into technology, it is best for firms to be open to the willingness of investing into tools and expertise to ensure their clients to get the best possible services available. Investing into technology allows the firms to be advance and innovate, instead of using Excel different firms may invest into management software. (cpapracticeadvisor.com)

Market Data  Tax and Accounting for private and public owned organizations can be seasonal as well as year round. Such as preparing taxes for companies can be seasonal, as well as planning budgets and giving consultations for organizations can be year round. For operations payroll services account for 25%, tax preparation and auditing each account for roughly around 20%. Other services included management consulting, financial statement review, and services related to computerized accounting systems services (hoovers.com).

Industry Development and Recent News  Tax preparation is starting to evolve because of the use of technology. The new competitors is the advancement of technology, it replaces man made labor. New trends are some software’s will allow you to prepare your taxes for free, depending on the tax return. To remain competitive many companies will “outsource their marketing and practice development programs to professional consulting companies as the need for diversified multi-faced marketing professionals” (Forbes.com). That there allows the companies to prepare their taxes without the use of their tax preparer, the technology allows the client to simply take a picture of the document and the software will enter it in automatically. There was also a new law that was passed concerning healthcare, if you were not covered by healthcare insurance for the year you will be penalizes depending on the client. This law affect employees as well as the employer’s, there was a lot of money that the companies had to invest in with healthcare alone.

Consumer/Client Market Data  There is not a particular buyer nor seller, many companies just decided that they will hire an accountant to be able to handle any financial transaction, budgeting or consultation, and tax preparation for the company income tax. Certain things varies as far as the psychographics, different companies has different lifestyles, buying habits, and preference. Depending on the environment of the company it will determine different functions. As well as the size of the business will place companies in different tax bracket than larger companies.