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- [00:01]
A
Welcome to the AICPA Town Hall Series, your resource for the latest news and updates on pressing issues facing the accounting profession.
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B
Good afternoon and welcome to the AICPA Town Hall. I'm Eric Ouskerson, one of your hosts for today. Today is Thursday, March 5, 2026, and we've got a great program in store for you. We're going to kick things off with a DC Update with Mark Peterson. Then we're going to have a technical update following with Melanie Lauritson. And then I'm really looking forward to having Dan Hood from Accounting Today here with me in the New York studio. And we're going to cover highlights from the just released accounting today top 100 report. And then Lisa is going to have a session with the small firm VP at the aicpa, Stephanie Otero, kind of talking about what's going on in the small firm environment. And then we'll be closing with our usual open forum. So bring us questions throughout today's broadcast. With that, I would like to bring up Mark Peterson. Mark, it's looking I mean, in your studio, it's looking sunny. I will report to people here in New York. It's a rainy March day, but things are beginning to warm up a little bit.
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C
Yeah, if there were windows behind us, you'd see some rain, Eric.
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B
Well, Mark, we've got a lot going on in D.C. we had some primaries this week, so give us the latest on what we've learned from them.
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C
We did. We're going to be exhausted by the time we get to November, Eric, but it really is starting now. And because of the narrowness of the majorities in the House and the Senate, you know, all of this matters. So primaries in Arkansas, Texas, North Carolina, North Carolina, there's a retiring member of the Senate, Thom Tillis, so that is an open seat teeing up former Governor Cooper against the former chair of the Republican National Committee, Michael Whatley. That is a pivotal that that race in North Carolina is going to be pivotal towards whether there's the potential for the Democrats actually getting back the gavel in the Senate again. Things are very close. We're watching that closely. Texas, you know, big primary day in Texas. You have current sitting Senator John Cornyn up against the Texas ag, Ken Paxton. Tons of money being spent in that. Neither of them reached the 50% line, which means it's going to go to a May runoff. That's why I mentioned being exhausted. So they'll have a May runoff to see who it is that's going to face U.S. rep. Telo Rico who defeated got the 50% over U.S. representative from Texas, Jasmine Crockett. So you know, again, all of these races are important because those majorities are so, so close. One of the things I will say too is that not only is this going to be affecting what November looks like in the next Congress, but there are some of these races, some couple House races where incumbents were defeated. You get a different attitude about things if you for example, lose your election and for the speaker with a two seat majority, if he's got to make sure that people make their flights, that nobody gets sick. And if somebody loses a primary, does it become difficult to have the votes on the floor to push things through? So even right now these, these things can start to impact the production of legislation on the House and Senate floor.
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B
Well Mark, you didn't think it could get any tighter and it looks like it is getting tighter. It is razor thin. Well, there's a lot of volatility in the world and that's one thing here with the town hall playing the trust advisor role. Here's some thinking on how to manage some of this discussion with your clients. But Mark, this is obviously top of mind with everybody in D.C. as well.
- [04:02]
C
Absolutely. We've been dealing with disruption and we've been trying to provide resources for the memberships. Think about the disruption during COVID and then the disruptions during the ongoing debate around tariffs. They're talking about debating congressional authority related to the President and the military actions that are going on right now with Iran. And so what we wanted to make sure is just remind our membership that we do have resources. Thinking about business resilience as we work through these issues that can impact not only the practitioner but also the companies and the clients that they serve. So we'll continue to put forward and refresh these resources as we see this play out.
- [04:46]
B
Thanks. Yeah, we definitely more to discuss related to that as things evolve. So Mark, also Homeland Security just news that broke today related to changes at the Department of Homeland Security. Correct.
- [05:01]
C
With the Secretary. So we still have a very narrow shutdown. Impactful, but very narrow. The rest of government got funded but Department of Homeland Security has not been funded. I think specifically for the impact that you think about for us, obviously TSA for those that are traveling. But you also have E verify. E VERIFY utilized for background checks, for employment. It is working but it has been impacted. There is also impact on fema. National disasters. Don't really care about what's going on in Washington. And although FEMA and the Coast Guard will have the ability to meet emergency needs, saving lives, the working through the grant process and getting relief funds out will be delayed. And so to the extent there were victims of natural disasters that were waiting for those, it's been slowed down. And if anything happens, it will be slowed down. Several votes this week in order to try and resolve this impasse. They have not moved forward on it. The paychecks are starting to be missed by, for example, tsa. And so the longer this takes, the pain will get more acute in several areas. But they didn't resolve it this week, Eric.
- [06:20]
B
And there are questions coming in. One of the questions is how will maybe the changing of the Secretary, the Department of Homeland Security, affect things yet
- [06:33]
C
that happened right before we, we sat down to get miked up. So it's unclear what kind of impact that will have. You know, the debate over the, over the Homeland Security was really about ICE because of all the, of the activity that was going on primarily in Minnesota. Ironically, the funding for ICE was still there because it was all in HR1. But that's the catalyst for that and trying to get some concessions related to ice. This, that absolutely could have an impact yet to, yet to be seen, though we also have resources. The QR codes that we have on all of these slides are resources to try and help membership navigate again, a domestic disruption.
- [07:13]
B
So ongoing information and status related to what's going on with tariffs after the Supreme Court ruling.
- [07:22]
C
Well, and everybody knows the big news about the Supreme Court striking down the powers, the emergency economic powers that the White House used in order to impose those broad tariffs. So basically they said that the White House had exceeded their authority and used these too aggressively. They did not speak to what should happen to all the tariffs that were collected, but actually kick that down to an International Court, U.S. court of International Trade. That court has basically said that they're going to decline a stay on the refund litigation and that the administration should move forward with a plan to begin refunds. Now, when we talked about this prior to the court decision in the Supreme Court, everybody knew this was going to be complicated. We have narrow examples of refunds from tariffs when there's been an overturn. But these are broad, extremely broad. At the same time that the administration is working on their plan B using other authority, not the emergency economic authority that they had, but other authorities that they can utilize in order to reimpose tariffs. For example, Secretary Bessant just announced moving forward with 15% tariffs, utilizing authority that they do have. And it was within the power of the administration, the president, to use but it's limited to 150 days. And the concept being, you know, move forward with 15% during that 150 days, try and work on these other authorities that they have to reimpose some of these tariffs. The big question I think for our trading partners is if you were negotiating a deal, even close to finishing a deal, you know, where does that stand now? How do you let that play out? Do you know these, the new tariffs that are being posed through this new authority put you in a better place or a worse place. So I think the uncertainty here is going to continue. There's also a study, the US Trade Rep is moving forward with a study related to a lot of our trading partners. And if in fact the study can find that there has been some abuse related to trade or something has fallen outside of the trade agreements, they can use that authority again to impose heavier sanctions. So a lot of dynamics playing out there. The big discussion is going to be over 2,000 lawsuits. Everybody's lining up to see if they can get their money back. That's going to be the news for a little while.
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B
Well, it seems like progress is being made here related to feedback to the Department of Education here.
- [10:04]
C
Right. Just to remind everybody, this was focused on the cost of post secondary education. Caps were put on it for loans from the federal government. The way they decided the caps was through these definitions. One definition was a profession, the other one wasn't profession. We were in the accountants, engineers and architects were in the non profession bucket. Obviously we definitely want to talk about what do the caps look like and what's the impact on the profession, the accounting profession. But we also want to make sure that we are absolutely defined as a profession. So we had conversations with Department of Education, Capitol Hill and the White House and they've actually put in language that is helpful in making sure that in clarifying the intent was not to insinuate that we were not a profession. The comment period of that just closed on Monday. We, along with over 30 state societies commented related to the open comment period. There were again 65,000 comments that came in for all those impacted, everything from the medical community, engineers and the architects. US we're going to see how this plays out. We're continuing to have conversations with the White House and with Capitol Hill. Again, this language that clarifies the definitions is extremely helpful. But we also want to see if there's a place that we could make sure that it is defined that will live memorialized so that we can point to it as issues come up. Eric.
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B
Okay. Well, this is, it's great to see Jamie Dimon talking about the national debt.
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C
Everybody was, you know, I think it was a big issue at Davos. You know, world business leaders are discussing it. It's not just the U.S. it's not just the size of the national debt in the US Many, many countries are dealing with. It's becoming a global economic issue. So it is something that we have some thought leadership on. If you listen to the town halls, we've talked about this in the past. We stay out of picking tax rates, talking about where entitlements should be set. But we do know a lot about financial statements. Right. And so the concept is that you bring the House and the Senate. You're not the town hall community is not going to believe this doesn't happen. But you bring together the House and the Senate into basically what would look like a joint session of Congress. You have the comptroller general come in and go through the financial statements. Policymakers will make their decisions for whatever the policy purpose is, but it should be connected to what is the impact on the bottom line of the US Government. So this legislation has been introduced in the past. We've gotten some support for it. It has been reintroduced. And by the way, this is bipartisan. There are several issues we're going to discuss today that are bipartisan. So there is some of that bipartisan activity going on. We've got a QR code here. We would love if the town hall community would go in, identify their member of Congress and it'll show you how to communicate with them, your support for this, and ask them to sign on as a co sponsor to this legislation.
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B
Well, this is right in line with some questions. As we showed the Jamie Dimon article, people are saying, what's the AICPA's position? How are we helping? So you answered what we're doing?
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C
Yes, absolutely. And then, and we're going to get into this more deeply with Melanie, but the Taxpayer Assistance and Service Act, TAS act, has been around for probably two years now, Melanie, and it is again, bipartisan. This has been a discussion between the chair and the ranking member of the Senate Finance Committee to come up with a series of proposals that really will kind of help taxpayer taxpayers. It will make some changes at the IRS as it relates to paid tax preparers, not just CPAs. It's an example of a lot of engagement by the profession. Things move slow at the federal level, but they do move. I think there's the fact that this has gone from what was a discussion draft to legislative text with a bill number means that it will be available for the House and Senate floor at some point. Now, whether they can get into tax legislation is yet to be seen, but there are going to be several opportunities. You know, if there's a year end package, there's some discussion about reconciliation again, although I think that's a stretch. And then good odds there's a lame duck session post election where there are several different vehicles or opportunities where something like this could get done. But again, the fact that it's bipartisan is extremely helpful.
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B
And we had, I guess the acting CEO of the IRS testifying.
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C
Yeah, Bizignano. So he was up, interestingly to talk about filing season, even though filing season isn't over yet. But they did have him up to the Ways and Means Committee to talk about how things are going. He talked about his focus on service, his focus on modernization and technology. Got a lot of questions about service because members of Congress do hear from taxpayers that are struggling with interacting with the IRS during filing season. You know, so I thought it was a very good debate. It did, you know, like everything in Congress, it broke down to kind of a partisan discussion over, you know, the implementation on the Republican side of HR1 and then, you know, the challenges to the size of the workforce of the IRS and, you know, issues like that. But by and large, I think that we will see once we get the feedback post filing season and we're, we'll understand what the experiences were like from the members of the town hall community. But he's going to be up there again at the Senate Finance Committee at some point in time, whether it's before or after the end of filing season. And so there'll be a chance again to see how all of this goes. And we will be sharing our experience with members of Congress and the irs.
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B
Well, hopefully he's making some progress on those modernization efforts as well for future filing seasons.
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D
Mark?
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B
Well, a lot you discussed just related to everything going on in D.C. and I know right beside you there is Melanie. So let's have. Yes.
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A
So hi, Eric. And I'd like to add a little bit of color of what is happening with the irs. So just a little bit of background with Secretary Besant. There is a federal Vacancies Reform act in place which allows somebody to fill an acting position for about 210 days. So Secretary Besant technically would be ending his ability to work with the IRS in the IRS in the capacity of IRS commissioner through this Friday. And then of course, that brings up other questions with the position of the IRS CEO. But there's an easy fix. It could just be as simple as there could be a nomination for an IRS commissioner which would then allow Secretary Besant to stay in that role until something were to come through. Move forward. Now, as far as the filing season, many of you have probably heard about the reassignments, the involuntary reassignments that are happening at the irs. And what is happening is they are having people from IT, from human resources and then some administrative people coming in to support in the customer service area. Now the involuntary reassignment is a minimum of 120 days. But keep in mind a lot of these people don't have a tax background. So they are providing them the same type of 13 week training that they would offer the seasonal hires. So that puts you to about 29 days or so that they would be providing customer service. Now that can be extended. So when this occurred, the national taxpayer employees union, NTEU, they actually filed a grievance with the IRS. And then on March 5, we saw the President push out an executive order which required ending collective bargaining agreements of which unions are consider that for certain agencies of which the treasury is one of those. So they did end that agreement with them. Now as far as the impact, keep in mind the union actually represented the non managerial people at the IRS and not the executive levels. So there are quite a few people that impacts. But specifically looking at it, when you're looking at the involuntary reassignments, that's roughly about 1,500 people of impact there. So then the question begs how is the filing season going this year so far? Now what you can see some stats there. The IRS has received 41.9 million returns, so that is a decrease of about 2%. But they've also processed, which is the more important question, the processing for 41.4 returns. Now that's a little bit of a decrease too, a 2.4% decrease. So that's kind of implying the potential that there might be a slight backlog occurring at the IRS. Another interesting piece is the 244 million visits to IRS.gov that's actually an increase of 46%. So that tells you there is a desire to get more information and guidance from the IRS this filing season. Now, as all of you know, HR1 is intending to put more money in people's pockets. And so the average refund, as you can see on the slide, is 3804, which is roughly a 10% increase. So roughly about $300 per person. And then Also, with the mandatory direct deposits that are happening, you see that there's 29.1 million direct deposits, which is almost consistent as what it was last year. But with the less returns being filed, it could actually be an uptick. So you can get all that information on that. L. Moving on to the next slide, we have a report coming in for the Government Accountability Office on paid tax return preparers. Now, we've seen reports like this in the past, but it is a good reminder of what their findings are and their recommendations. So they did come forward, and their big thing was pay preparers are essential to the tax ecosystem. The reason being is 57% of taxpayers file their returns through a paid preparer. So we're talking about 85 million returns that are being submitted. Now, what they found is the majority of the paid preparers are unregulated. And as you can imagine, that creates a risk for people. So that means they don't necessarily have the education requirements or ethical standards standards that they need to abide by. And therefore, we're seeing more mistakes in these types of return. So GAO has come forward and said that congressional action needs to be taken, and they are asking for a minimum level of standards by which the IRS can have authority over tax return preparers. Now, this report also found that there would be roughly about $100 million in financial benefits if the IRS did have this authority. So just to recap recommendations, they need to establish minimum professional standards, but the report also says it needs to recognize and support those that are credentialed, like CPAs. And then of course, if there's no authority, they think that the IRS cannot prevent abuse. That could be happening with taxpayers, which then that rolls into our next slide, which Mark already touched on for the TAS act, where again in this piece and what I have listed here are the different provisions that we care most about within that discussion. Well, it's not a discussion draft anymore. It's an act. It's a legislative bill. So there are 63 proposals. These are the big ones that we see. And prepare regulations is one of them. So just to highlight, the disaster relief trigger at the state has already become law. We've seen Louisiana already take part of that and they were granted relief for the recent storms Math Air Authority that's already been enacted, interestingly enough, the true quarterly estimated payments, that is not in the bill, but it is a standalone bill that still exists. And is there prepara regulations Again, that also has its own standalone bill. And there's a lot of support from stakeholders to See, this move forward now, the mailbox rule, that's when you file electronically that upon that initial submission, it would be treated as timely filed. That's actually past the House. And so it's waiting for the president's signature to come forward. Now, the big piece that we really focus on also is Safe Act. The reason that's so important for us is it would really alleviate all the work necessary that comes with an extension. So it would allow you to be able to pay 125% from prior year to then avoid penalties associated with an extension either due to estimates or not getting the right information. So it just would really create a lot of it would alleviate not only for taxpayers, but also for preparers. So we look forward to seeing this move forward. And there's a link there with more information, which then brings us to our next topic, which is our round robin. So I'm going to highlight on a few things just due to time, I definitely want to make you aware that Aon came forward with a risk alert around the United States Postal Service postmark date change. Now, as most of you know, the USPS came forward and said that the postmarking would not be happening anymore at the local offices, but it would happen at the regional offices. Well, if you think about it, over 50% of the local offices are over 100 miles away from the regional office. And that can create obviously issues and risk and liability. Now, ultimately, it is the taxpayer's responsibility to have timely filing. But when taxpayers turn to us to ensure that that timely filing happens, that does put risk on us. So with Aon, they've asked firms to consider four different things. One, if you have a client that does paper file or sends paper checks to consider moving up that internal deadline of when they need to submit and have their paperwork done with you, so then you can submit on time. The other thing is to encourage people to e file and to make E payments and also to talk with the clients about potential risks that could be there inherently by paper filing. But the one thing they also say is to make sure that you are getting proper postmarks on these returns that you're submitting. And what they talk about is in that guide that the Postal Service came forward was, yes, you can walk up to the counter and get that manual post office postmark on it. But ultimately none of that will matter if the return never makes it to the irs. So they're saying that the most thorough and complete way to ensure and have proof that this return was filed timely, even if it doesn't make it to the IRS is through certified mail, which is a best practice for all firms. So please take a look at that alert soon for it. Now the other thing that I do want to connect with you guys on has to do that the IRS released the final schedule. Now that is the schedule to be able to claim the no tax on tips, the no tax on overtime, the car loan deductions, and also the senior deductions. Now, the form is pretty much exactly what it was in draft form. So that's not a lot of change. But the key takeaway is to look at the instructions of the form. There is new guidance there specifically for the overtime. And if people were to have there are examples if people were to have different Fair Labor Standards act under that act. So please take a look at that. And there's also new guidance on the deductions for seniors. So with that, Eric, I turn it back over to you.
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B
Thank you, Melanie. Look forward to having you join in open forum and we'll definitely try to take a couple of these questions that have come in. So with that, I'd like to welcome Dan to the Dan Hood to the New York studios. So you can do a group shot here. Dan is, as you you all well know, is the editor in chief of accounting today. Dan is someone who is a true partner for the profession, brings a lot of insights, communicates with firms, communicates with members in business and industry. So, Dan, we're thrilled to have you with us today.
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D
Thrilled to be back. It's an annual tradition at this point. It's great.
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B
It's an annual. And we, you know, we'd like to have you here not just for this annual tradition, which is the release of of the top 100 firm reports. So very much looking forward to getting into it. So let me just with this opening slide, I kind of loved the picture, this iconic picture. And maybe just I want you to kind of reflect a little bit on kind of how you came about this. Pick your destination. The biggest firms in the country are moving fast into an uncertain future. And let everybody know, which train station is this?
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D
Well, as New Yorkers, we say this is a Grand Central station for those of you who don't know, a big train station not too far away from where we're sitting right now. Central hub for a lot of people who live in New York. But it's also sort of a symbol of options. You got options of all kinds. You can go anywhere from Grand Traffic. You can go to Long island, you can go to north of the city, you can Go all kinds of places. There's a bunch of different lines. And that was sort of the thing we were picking up on the options that accounting firms have available to them. There's so many different things that accounting firms can do. Different ways they can be structured, different ways they can pursue growth, different ways they can partner with outside investors, particularly private equity. But also also the ways they construction sells differently to deal with those changes in the PE or bringing. So there's just a lot of different options for firms. And that was what we wanted to communicate, was the sense of where you are now. You can go a million different directions in a million different ways. And most of them super positive.
- [28:37]
B
Well, I think most people are familiar with this, but at the end of today's section, we'll let everybody know how they can get this report. I actually have a printed version here in the studio with me. It's like 30 or 40 pages. And what we're going to talk about is some of the key trends. And these trends are relevant to firms of all sizes. And I actually think they're also relevant to members in business and industry. So we've got a slide here highlighting some of them. Why don't you take us through them?
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D
All right, let's talk about growth. Growth rates are. The average growth rate is up about 3 to 4%, 3, 4 percentage points, I should say, from last year to about 8.58%. A lot of that is due to stronger growth rates among particularly the big four and the $11 billion firms. There's that group of $15 billion firms at the top. They're so big that they sort of. They make the weather for this list. So if they're doing better, then the list is. Then the average growth rate is doing better. The low point, the threshold for entering the firms this year was about $68 million. So that gives you a sense of the range. We're going from $68 million in the number one firm up to around $35 billion for the biggest of the big four. So you're really looking at a big range there. What happened was two things. The big four firms grew a little bit better. Their growth rate was a little bit over 5%, which is stronger, much stronger than the previous year. And also then the other $11 billion firms had a couple of really strong growers there, particularly Baker Tilly and the Moss Adams combination took them. They grew almost 100%, almost doubled in size. So that grew growth rates up there. When you leave those billion dollar firms out, you still see incredibly strong Growth, double digit growth. For the other two cohorts, which are firms between 100 million and a billion, they grew, what do you say, between 15.5 and 16%. And then the firms under 100 million grew little over 12%. So strong growth rates all around. Everybody's doing very well, either continuing from their growth rates of last year or seeing higher growth rates this year.
- [30:39]
B
Dan, we'll have a slide coming up that breaks this down in some ways. The big four, the overall number of 8.58 is heavily influenced by the big four. When you take the big four out, growth is over 12% and it is pretty impressive what's occurring. And we'll talk a little bit about some of the drivers. Actually, we're going to be covering a number of these other points as we move through a few of these slides. So maybe just you noted here that you had 11 firms at a billion dollars and above, plus the Big four. And then we decided there was one firm that was rather close. So with this you have 12 firms.
- [31:20]
D
Exactly. We had been $16 billion firms last year. Last year one dropped out because Moss Adams combined with Baker Tilly. When we look at number 16, it's Citron Cooperman, they're at 895, sorry, $985 billion. Right. If they check the cushions in the couch in the break room, they can find an extra $15 million. Get into the bingo. So we're including that them sort of as honorary billion dollar firms. But it still is, this cohort is enormous. Compared 10 years ago, you wouldn't even had 5 billion dollar firms. So this is enormous. They're all growing very strongly and continue to grow. They're making acquisitions, they're seeing organic growth. This is a powerhouse group of firms. And we expect to see, as you said, Citroen Krugman come in. And you never know, there's firms a little bit lower than that that might combine, might make combinations and we'll see if that billion dollar roster grows next
- [32:03]
B
year and that we didn't do this, but there's been a lot of moves and positions here. Baker Tilly moving into six. There's other, other movements that have, that have occurred from last year. This year.
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D
Right. We're seeing the. There is no stability in the rankings from, from number five to number 15 if they move up and down all the time. So it's a fascinating sort of thing.
- [32:23]
B
And if you look at it, I mean, you know, the top, you know, the top 20 is potentially getting closer and closer to, to all being billion dollars. Still a little ways to go. But you look at top 25, it's over 500 million.
- [32:36]
A
Yeah.
- [32:37]
B
So this kind of breaks down a little bit more about what we just were talking about looking at firms under 100 million firms, 100 million to 1 billion in the billion dollar firms, which obviously includes the Big four. And this kind of gives the breakdown, which I think is interesting. Starting 2019, pre pandemic, and then you have to see the little pandemic slowdown and then a little bit of the growth right out of the pandemic. And now it seems like things are almost getting back to levels of where they were in the past decade.
- [33:11]
A
Right.
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D
And you're seeing that. What you're really seeing also is that strong growth from firms under a billion dollars. Right. They are sort of gradually growing their growth rates to strong, strong numbers. And it's the Big four and the billion dollar firms that kind of, they either cap it or help boost it, depending on how they do it because they're so big.
- [33:30]
B
And this slide here really highlights last year. And you kind of covered this verbally, but this shows the big four's growth number last year, that billion dollar, those $11 billion firms and then 100 million to a billion and under $100 million. When you listen to MA is a big driver. But maybe just talk a little bit more about what some of the insights were from. I mean, Cass is another big driver as you look at this growth.
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D
Yeah. I mean there's no question, particularly for the firms between 100 million and billion and M and A is a huge driver of growth there. But the interesting thing to note here, when you split out the billion dollar firms that had a slightly lower growth rate, 7.64% as combined, when you strip them out, the big four are about 5.6%. The other billion dollar firms are about 15.5%. So there's really strong growth. Now the interesting thing there is when you strip out Moss Adams and Baker Tilly, the growth rate of those billion dollar firms goes down a little bit to 8.63%. It's still above average for the top 100, but it's definitely that M and A really makes a huge difference. That said, we're seeing growth in the organic areas for all of these firms. You talked about cast. That's a big driver of it. It's coming from a small base for a lot of these firms, but still it's going gangbusters.
- [34:41]
B
Well, let's look at this is the top six fastest growing firms in the top 100 last year. A couple of comments. Two of these firms were not in the 2024 list that Richie May, who had the highest growth and then Prosperity Partners. These other four firms were Baker Tilly, we've been talking about that. They're PE backed and then Ascend Springline Advisory in Crete. These are, some people call them platform firms where they're doing roll ups, they
- [35:18]
D
go out, they acquire a bunch of other firms. But those firms still operate under their own name teams, but they're operating within a framework provided by the platform. So it's not a straight on acquisition. But what's interesting is we do an overall fastest growing firms list that includes not just top 100 firms but all of our regional leaders as well. Of those 26 firms on that list, 23 have taken some kind of outside investment. Either they're working with a platform firm like you mentioned, they've been straight up acquired by a single PE advisor or PE Invest, or they have some other kind of outside investment. So really it gives you a sense of, for growth rates, they're being driven a lot by those outside partnerships, mostly PE based. That's really what's driving the high, high, high growth. I want to just mention the one firm that's not included in this list because they're not a top 100 firm, but they are. The number one fastest growing firm from our list was Alan and James Partners. They grew something like 330%. So then their PE back, but they're still below the threshold for the top 100. But it just gives you a sense of what's really turbocharging growth around the, around the profession. Is that, that outside investment.
- [36:20]
B
Yeah, outside invest. We got a lot of questions coming in. Organic outside investment. It's a combination, it's a combination of both. Clearly the, the M and A is driving it. What we, you know, a couple weeks back we had, we had Jeff Weiner on who was the, the former CEO of Markham. I know you're talking to a lot of firms when you, when you look at what do they, what are they telling you on, on how, you know, things are functioning differently potentially in these PE back firms.
- [36:48]
D
One of the key things we hear a lot about is there's a lot more reporting and there's probably a lot more reporting and then a lot more accountability, but probably not at the same level. The reporting is heightened. People are really looking at their numbers and saying what are you focusing on? What are your KPIs? You got to let us know on a regular basis. And then using that they're creating more accountability among partner groups. A lot of accounting firms have, I don't want to say struggled, but talked a lot over the years about accountability. And how do you make sure everyone in the, in the firm is doing what we need them to do, but everyone's a partner. So it's kind of hard to make everybody toe the line. I think we're seeing a little bit more of that in the PE backed firms. They're setting goals and they're holding people to them more strongly. That's the reporting we're getting sort of initially. We're also hearing some other things from people who are not necessarily at the leadership levels about how they feel about it and how it's changing the culture of their firms. Some of this is early days. It's tough to tell how much of that's going to have a major impact, but we're definitely seeing that reporting aspect of things is a big surprise, I think for a lot of firms how much they're going to actually have to be be reporting back to their partners.
- [37:49]
B
Well, we're a few 10 minutes into this discussion. We haven't brought up technology, but so let's bring up technology. I mean, what the role technology is playing with this growth and with some of these investments.
- [38:00]
D
Right. I think what we're there's interesting. A lot of people talk about you bring on technology to spur growth. I think what actually we're seeing here is people are growing and they're saying we need the technology to spur further growth. So they're using in many cases investment from PE firms. When we did a survey last fall of what's your primary reason for working with a PE firm, the number one answer was to be able to invest in technology. We thought it would be to make acquisitions or to pay out retiring partners. But the number one choice was investing in technology. So I think firms are hoping that technology and hoping and expecting reasonably that technology will help them grow. It'll also help with capacity issues. But I think they're also relying on it to further turbocharge the growth they're already seeing through acquisition and to a certain extent to help boost their organic growth to make them more capable to offer up new services, to boost new services through technology. So I think that's it's the growth is leading to the interest in technology.
- [38:52]
B
Well, before we get to talking about CAs and CAs is client accounting Services. We have always shown all these acronyms. But let's talk about just another hot topic that we always discuss is staffing in Partners. And I know there's some takeaways from the level of partners in staffing at the firms.
- [39:13]
D
Yep, absolutely. We're seeing, and this is a trend that's playing out even more among our whole universe. Firms that we include for this report. There's a bunch of regional leaders and think of them as the firms from 101 to roughly around number 300 that we consider in regions around the country. We're seeing early indications of declining partner numbers. Not huge declines, but more firms reporting a 1% decline in partnership in partner numbers of 2%, that kind of thing. And our suspicion is that's just. It's retirements. Right. A lot of the ownership of accounting firms is baby boomers who might have already entered, entered a retirement era five, even 10 years ago for some of them. And they're just starting to actually take those retirements or in some cases they may be hitting mandatory retirement ages. We don't think it's a question of people fleeing the profession or anything. It's just a natural fall off. There's so many baby boomers in there. What it does indicate is that a lot of firms have had trouble filling the partner pipeline to cover for those retirements. We're seeing in a different, different set of trends playing out around staffing. We're seeing people are still hiring, plenty of people, but some of the staffing
- [40:17]
B
growth was higher than the revenue growth.
- [40:19]
D
Yeah, right.
- [40:19]
B
So it's important to. Staffing is still growing.
- [40:22]
D
Exactly. If people can hire, they will and they are finding people. One of the things we're sure about is a lot of those people are not accountants or CPAs. Right. They're from outside the profession. But yeah, there's still plenty of room for firms to find people. It can be a little more difficult and it may mean expanding your idea of who you can hire. Like I said, beyond CPAs or accountants. So yeah, we're continuing to see that.
- [40:43]
B
Well, we've got a couple more, you know, good data points here. One this, this area, this slide here. Sometimes the slide, we, we've done it over a number, number of years. It's misunderstood. This just is indicating that the firm indicated this was a growth area. So when they'd have to be in the area, then they say it's growing. Right. So 85% of the top 100 say they're in their, their cast area. Is growing a task, growing a stage, growing.
- [41:09]
D
Right. They're seeing some level of growth. That's great because this is routinely. Every year we get questions about this here and elsewhere. So yeah, it's not that they're growing 85%, it's that 85% of firms are seeing growth in this area. I will say about a fifth of the firms, roughly 21% of firms are reporting CAs as their fastest growing. But again, that's not a number. It's just of all our growth areas, this is the one that's growing fast. And we've never seen that kind of of single service getting that many people reporting growth in it.
- [41:37]
B
And you've got an article about client accounting services in the top 100 reports. So just something a lot of trends there. It's still, I like to say baseball season's around the corner and we're still in the early innings of the movement of client accounting services. More and more businesses and it's by verticals, firms focusing on a vertical, focusing on a niche, whatever it may be, franchises, not for profits, professional services, construction, and then building out a state of the art outsourced accounting practice. So why don't we have a couple more topics here, but let's bring Lisa Simpson up as well, because Lisa is someone who leads the firms for the aicpa. And so after you comment on this and I'll have Lisa join in, then we're going to have some closing thoughts. But wow, you don't even have to see the numbers. 2025 was a boom year for M and A.
- [42:32]
D
Right. And this is we asked the top 100 firms to tell us what deals they've done or what deals they've or we look and find what deals they've announced. This isn't obviously comprehensive because there are some firms that deals that just never get announced. But for the past four or five years, it's been between 110 and 120 deals reported this year, 225. I mean, that just gives you a sense of how big M and A is in the profession these days. It's just more or less kind of doubled in 2025. So huge driver there. And a lot of that's obviously being driven by PE fir PE backed firms that are out just they've ramped up their acquisition engine to a huge degree.
- [43:08]
B
Lisa?
- [43:09]
E
Yeah, I think it's really interesting to see some of the firms that have combined at one time. So you've got examples like Richie May brought in five firms at once. Soren, who created a top 100 firm by combining multiple firms and they're operating under one firm name different than a platform operation. So M and A is certainly a strategy for a Lot of firms. But firms are finding growth in other ways as well. I think it's important to also think about as if you're not a top 100 firm and you're thinking about, why does all of this matter to me, it's always important to know what's going on in the ecosystem so that you've got those inputs as you develop your strategy. Your strategy may be very targeted organic growth growth. And that's great as long as you got a strategy. So you got to have that strategy first and then decide if M and A fits into it and then how the capital needs are going to fit in as well.
- [44:11]
B
And Dan, I mean, that's. You kind of said a little bit about that at the beginning, but if you were talking we do have a lot of and we're not doing, you know, reviewing this list for the rankings. It's about the insights.
- [44:22]
D
But yeah, huge. I mean, it's always worth think there's an enormous amount of information that's valuable to firms of all sizes.
- [44:28]
C
Right.
- [44:29]
D
Just on the very basic level of a lot of these acquisitions are bringing these larger firms into your area. You may have thought, oh, well, no one's practicing either in my niche or targeting my types of clients or targeting my geography. But all this M and A means that firms are expanding. They're reaching into new areas they've never reached before. They're trying new things. That alone makes it of interest because that means they may be competing with you. But there's also tremendous insights we get from the top 100 and smaller firms about their growth strategies. And there is a huge amount of relevant material there in terms of the intentionality with which the top 100 firms approach growth and the strategies they're applying to it, the number of different strategies they're bringing together to combine. It's not just M and A, it's a bunch of other things. This year's big focus is client service and managing clients and figuring out better ways to find the right clients and to bring them on board and then to make sure you're delivering the things they need. So that's a huge focus for firms this year. Doesn't mean they're ignoring all the others, but it's a big one they're trying. So there's a lot of. I think those things apply at all levels for all sizes of firms.
- [45:26]
B
Well, excellent. Go ahead, Lisa.
- [45:29]
E
I was just going to say, Dan, one of the things that I picked up on as I was reading the report, which is always one of my must reads, was the focus on talent. A lot of folks might think that the talent pressure has lessened a little bit. But you pointed out firms are still hiring and they're thinking about making that major investment in leadership development upskilling so that their folks are able to use the technology that we're empowering with to move up upstream and perform those advisory services. They're thinking about compensation still, which is great. We don't want to take our foot off the gas in terms of making this an attractive profession. And I loved one of the quotes which was basically happy staff lead to happy clients, which should lead to happy partners. So I love the fact that firms are still focusing in on their people as they look at talent or technology, expanding services, M and A, et cetera. So it's good insight sites.
- [46:27]
B
Well, Lisa, we now is a perfect segue into the small firm segment. So just for the listeners here, here's a QR code to get that report. And this is a great slide that's in the report showing the past 30 years. It shows the strength of the overall, you know, service that's being provided by these firms to the market. Only two or three down years over the, over the past 30 and we could spend more time on that. But we need to move now to the next segment. So Lisa, you can bring Stephanie up and I'll be joining you back in open forum.
- [47:04]
E
Thanks Eric. And I think that slide is always a great reminder of how great the profession is and how many opportunities there are. As Dan pointed out at the very beginning, so many options of how to become, how to be a cpa, what being a CPA firm looks like. Stephanie, I'm going to thank you for coming back. It's good to see you again.
- [47:26]
F
Yes, thanks for having me.
- [47:28]
E
As a reminder, Stephanie is our vice president and our small firm advocate. One of the comments I saw in the Q and A as we were talking about this focus on large firms and how they're growing is that there is still a need for small firms. Right. There are still clients who are going to look to a small firm or a medium sized firm to have their needs met. Staff are still going to be attracted to a smaller firm or a medium firm environment. So. So still a good time, right?
- [47:55]
F
Absolutely. Small firms are the heart of our profession, so they're absolutely needed.
- [48:00]
E
Yeah. And so we spent a lot of time talking with Dan about growth. But should it's middle of busy season and should small firms even be thinking about growth?
- [48:10]
F
Yes, I think so. And before I scare them off with that, they should be thinking about growth during busy season because I realize how very busy they are. I think growth for small firms can be just about seeing the opportunity opportunities during busy season and being intentional about those opportunities. Small firms are in a really unique position in that they can be very agile and they have close client connections and relationships. And those two things allow for opportunities during busy season that aren't a heavy lift small things they can do, but that can lead to growth for them.
- [48:42]
E
Absolutely. And I love the fact that you've brought up some of the recurring pain points that we all face in the profession, and one of those is around extension. So what are your thoughts on how CPA firms can get clients to buy into extensions?
- [49:00]
F
So extensions. Yes, I view extensions as a tool, especially when I had my own practice. I view them as a tool to help create capacity during busy season and also to prevent burnout. Two things that often small firms struggle with during busy season. Right. Sometimes I would forget to have meals and have lunch during busy season. So you're wearing multiple hats. Hats. You're trying to get those returns done. But I think you should view, they should view extensions as a tool and utilize them and be proactive about them. You know, figure out right now what are the clients that can go on extension and start filing those soon. That'll help start creating capacity during busy season to have some of those deeper conversations with clients that I know we're going to get into in a little bit later.
- [49:41]
E
Yeah. Any other practical tips you want to bring up right now? Or we can talk about resources.
- [49:49]
F
So no, what I want to mention during busy season is here's the opportunities I was talking about. So you have visibility with your clients right now. You're preparing tax returns, you're meeting with them, you're reviewing their financial information. That gives you an opportunity. And here's some things you can do that just fit into your work life right now during busy season. So as you're meeting with clients, especially business clients, ask strategic questions. You know, what growth are they expecting in the next year? Any big major improvements happening in the next year? Asking those questions can help you to start jot down, who are those top advisory clients? What clients could you add additional services to and then which ones could really benefit from having advisory services. We talked about, you know, extensions and being proactive with those as well. And then having those conversations and jotting down who those top advisory clients are. You can then schedule after busy season additional conversations and meetings so you can have more in depth conversations about how you can really be of service to those clients.
- [50:46]
E
I love that. I love that. One other thing that I'll throw out as a practical tip right now is to go ahead and start working on the list of the clients that you may want to disengage from and getting input from your staff, your professional staff, your administrative staff, and just keeping that running list going while the pain's fresh.
- [51:08]
F
That's important because it's busy season comes and goes so quickly. It's so easy to forget the issues, the pain points and yeah, exactly what clients are creating. Bott necks. Maybe you no longer want to work with. You don't have that. You know, it's not, they're not easy to work with. I think tracking all that is really important. And Lisa, I know on the next slide we have some things that we list to do after busy season.
- [51:29]
E
Yeah, let's, let's go ahead and jump to after busy season. And Stephanie, I know you'll come back after busy season. We'll go into a lot more around the strategies that small firms can be thinking about as they take advantage of. Maybe a quieter time time.
- [51:44]
F
Exactly. So some things I can do after busy season is as you've been tracking down, maybe those clients that do cause some pain points in your firm is then reevaluate the clients after busy season. It's a great time. You know, I know when I first started my firm and then five and six years later on, as I was into my firm, clients that I initially took on as clients were no longer a good fit for me. They were no longer growing as I was growing and evolving. So I think it's a great time to reevaluate. It's also a good time to revisit fees and pricing. Oftentimes we may choose a certain price for a client, but then realize their tax return was a little more complex, more involved. So it's a great time to reevaluate so you don't miss that for the next busy season. And then also a great time to figure out how you're going to package advisory services into your offerings. As far as pricing, set some growth strategies. They don't have to be big things. The things we're talking about today are small, being intentional about things as you're going through busy season again, evaluating those bottlenecks, determining where you can fix so you can add capacity for the next busy season. And then you mentioned resources. And I know we have another slide, but we have a ton of resources and toolkits to really assist small firms as they're looking into growth opportunities.
- [52:54]
E
I'm going to key in on one word that you talked about, which is intentional. And I think that being intentional, it's kind of hard when you're wearing a bunch of different hats. But I think the small firms that I'm talking to are really digging into ideal client profiles, looking at the clients that you brought up that are ready for advisory relationships, not just focused on the I'll see you next year when it's time to do my tax return kind of relationship. So I love that word intentional. You mentioned resources. So let's go to the next slide and take a look at some of those. And again, we'll come back to those. But do you have any favorites that you'd want to pick out of this one, Stephanie?
- [53:40]
F
Yes. So first thing I'll mention, it's not listed here, but I know it was spoke about at the last town hall and that was the Burnout Prevention toolkit. So just a reminder, you know, busy season, it's so easy to deplete ourselves. It's hard to fill other people's cups when our cup is empty. So looking at that prevention Burnout toolkit, I would really recommend we have some other toolkits here. PCPS stands for a private company's practice section. I will never stop preaching PCPS for small firms to join PCPs. Most of their tools and resources are really geared for small firms, so it's a great benefit. And we also have community within pcps. So I always recommend that to small firms if they aren't already a member. And then we also have a tax and financial planning advisory services toolkit as well as Financial Planner. And if they're looking into personal financial planning, there's also a checklist there listed as well. So hopefully these can help after busy season, some resources they can look at to help them with their strategy and with growth.
- [54:36]
D
Growth.
- [54:37]
E
I'll just say go ahead and join PCPS now. That'd be great. But I'll point out that tax and financial planning advisory services resource that we've got linked there that the 2026 planner is really helpful in terms of kind of mapping out what we talk about. When we when we're saying financial planning, it doesn't mean selling investments or, you know, making them buy life insurance policies. It's really just about creating that holistic relationship with the client. It based on by understanding what their goals and objectives are. And you know, I think as we talk about intentionality, finding those clients that are interested in that relationship is a really big benefit.
- [55:20]
F
Absolutely.
- [55:22]
E
Stephanie. I think that was a great reminder of some things that they can be doing now in the middle of busy season. Start keeping those lists running, put them on the whiteboard in your office or just keep an open note on your laptop with that, Eric, I'll invite you back and we can move into Open Forum.
- [55:42]
B
Okay. Well, yeah, great session there. A lot of good insights. So thank you, Stephanie and Lisa. And we've got, we've got plenty of questions. We got close to 14,000 with us on this early March day. Lisa and Melanie, I don't know if there's ones that you picked out. I'll just broader one. Mark, you've heard this one before, but with some of the information getting to practitioners and getting to filers later and other issues with meeting the tax deadline, where do things stand on a push out of that tax deadline?
- [56:20]
C
No, we've had this discussion for many years, haven't we, Melanie? And it divides the membership. We have half the membership that says don't move it and the other half can't decide on where to move it to. So it's extremely personal. And there is just the reality that Congress is not going to move it. You know, during COVID there could be some special circumstances where there something may happen, but the reality is it's just not going to get moved. And so things like the SAFE act, we're looking for other things that we can do to try and help mitigate the pain outside of moving the deadline. But it's just, it's not practical. I don't think Congress will consider, etc.
- [56:59]
B
And a lot of members complained to you about when they moved into July, Mark Right?
- [57:03]
C
Oh, yeah. Yes. Yes, I heard from them.
- [57:06]
B
Yes. Lisa, Melanie, I'll jump in real quick.
- [57:11]
E
Stephanie, I'm having an aha moment. We got a question about how can small firms find out about all the resources that we offer. And you've worked on that. You've created a small firm hub and I don't think I put it we put it on your slide.
- [57:25]
F
So I know I missed that, but yes, you're exactly right. We created a small firm hub and we also have a small firm newsletter that just launched. The next one is coming March 19th. So please get in contact with me and I'm happy to direct you to
- [57:36]
E
those resources and we'll make sure we include those in the newsletter that'll go out next week as well.
- [57:43]
A
And if there's one moment, there were a couple of questions about identity theft and if you're a victim of identity theft and Actually in the round rod, the IRS pushed out a new webpage where you can, it consolidates everything round identity theft and where you can confidentially put in your information to get help and support for it. So there is a link in the round robin slide.
- [58:06]
B
Well, thank you. And Dan, lots of good comments coming in related to our session. And as I said, you do this report, there's other reports that we all do related to, to firms of all sizes as well as business and industry. Dan, and you and I were talking about that and I know you've got a good business industry audience and about 35% of the town hall attendees are business industries. So thanks, thanks for being with us today and I think we're going to have you back sometime before next year.
- [58:36]
D
Listen, I'm happy to be here once a year. Thanks for having me.
- [58:38]
B
Thank you. So with that, Lisa, why don't you and I take the town hall community through these closing slides. We've got some good resources. Here's a, you know, a great resource. Our, you know, we've got this tax research program that we've rolled out. Our partner Blue Jay is offering a complimentary seven day trial just in there's, you don't have to provide a credit card or anything. You can just go utilize this, this tool and, and try it out. We're seeing a lot of what I would call productivity and value gains. It's efficiency. But this is, you know, when you look at Gen AI, I think it's going to be about a lot more than just efficiency. It's about increased value. Lisa, any comments?
- [59:23]
E
Absolutely. The way Genai and tools like Bluejay can help you identify opportunities, identify conversations to be having with your clients. Back to what Stephanie was talking about. It's just a game changer.
- [59:38]
B
Yeah. So you can use that link and you can be in business and industry and leverage it or you could be in practice. Here's some other resources we talked about client advisory services and how that's the highest, you know, single is the highest growth area in many of these firms. So here's some best practices and case studies related to client accounting services
- [60:02]
E
continues to be such a growing area and such a needed area. So many of our small firm clients, small clients need those and many of our medium firm clients need it. And it's just a great way to again create a relationship that moves beyond that compliance aspect really quickly. For our ANA friends in the audience wanted to highlight a new resource from coso, which is the committee of sponsoring organizations of the Treadway Commission. It's been around for quite some time. AICPA is one of the five supporting organizations and as you can imagine, controls around Genai are a hot topic. So they've created a resource that gives you some practical tips on how to create frameworks that will help minimize risks. You'll find out more in the Journal of Accountancy article, or you can just go and download that framework. It's available to you.
- [60:58]
B
So thank you Lisa. The next Town hall will be March 26, so look forward to being with you then. Thank you for joining us today. It's a tremendous community and Lisa and I are really proud to be able to connect with you through these town halls as all the other members who participate, all the other participants who join us. So thank you very much.
- [61:23]
A
Thank you for your participation. You can also subscribe to the AICPA Town hall series on your favorite podcast platform, as well as watch archives on YouTube and find resources@cpa.com Townhall Tune in for live broadcasts Thursdays at 3pm Eastern Time.
- [61:44]
C
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