CPA Practices
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 52,200 CPA practices in the US provide accounting, tax preparation, and auditing services to businesses, non-profit organizations, and individuals. Tax preparation and tax planning work for organizations and individuals comprise about one-third of overall CPA client fees, but are typically over half of client fees for smaller firms. Tax work is about evenly split between individuals and organizations. An additional 36,500 solo accountants operate with no employees and generate $2 billion in annual revenue. CPAs are licensed by their State Board of Accountancy.
Changing Tax Laws and Accounting Standards
Keeping up with changes in complex tax laws and accounting rules is a major challenge for CPA practices, particularly smaller ones.
Liability Exposure
Difficult economic times can cause business owners to blame their advisors for financial difficulties.
Industry size & Structure
The average CPA practice has $2.6 million in annual revenue and 11 employees.
- There are about 52,200 CPA firms in the US operating about 55,000 locations and generating about $132 billion in annual revenue.
- Any accountant filing a report with the SEC is required to be a Certified Public Accountant (CPA).
- About 85% of firms have less than 10 employees.
- An additional 34,900 establishments are owner-operated with no employees. These solo accountants generate $2.2 billion in annual revenue.
- CPAs are licensed by their State Board of Accountancy. All States require passage of the Uniform CPA Examination prepared by the American Institute of Certified Public Accountants (AICPA) for licensing. Less than half of candidates pass all four parts of the exam on their first try.
- Nearly all States require CPAs to complete a specific number of continuing education hours before their license can be renewed.
Industry Forecast
CPA Practices Industry Growth
Recent Developments
Feb 12, 2025 - Ohio Offers a New Path to CPA Licensing
- Amidst an ongoing shortage of CPAs, Ohio became the first state in the US to pass CPA licensure reform to make it easier for new accountants to immediately start working in the profession. The new law, taking effect in January 2026, offers alternative routes to becoming a licensed CPA that don’t involve completing 150 college credit hours rather than the standard 120, as was previously required to become an accountant. Industry experts say that the higher course requirement amounts to a fifth year of college that has discouraged students from finishing accounting programs. Accounting graduates will be able to replace the college course requirement with work experience in the field. The American Institute of Certified Public Accountants endorsed alternative licensure pathways last year and so far more than 30 states are working on similar legislation.
- A survey by opinion pollster Talker Research of 400,000 people who plan to file taxes in 2025 found that across ages, many taxpayers know very little about the subject. Among Gen Z respondents, 17% believed that you can write off anything as a business expense, 20% believe students don’t have to file taxes, and 13% think getting paid in cash is tax-free. Among Baby Boomers, almost 30% think you don’t have to file a tax return if you are under the IRS’s minimum salary threshold. Large swatches of respondents in all generations had difficulty matching tax terms like “earned income tax credit” with their definitions. Taxpayers at least admit they are usually ill-equipped to file taxes themselves. More than half of millennials use an online tax service, 32% of Gen Z ask their parents for help, while half of Gen X and 44% of boomers file taxes online.
- CPA practices face a staffing shortage heading into the 2025 tax season. Several years of attrition through retirements and middle-aged CPA burnout has left the accounting industry about 300,000 workers short with not enough fresh recruits to replace them. The US Bureau of Labor Statistics shows CPA firm employment flat throughout 2024, coming in at 0.7% in October year over year. The shortage is likely to affect CPAs and taxpayers alike in the coming year. CPAs are overloaded with work - which makes them prone to mistakes and filing errors - leaving many without the bandwidth to take on new clients. Those lost clients then can potentially make their own mistakes doing taxes themselves, creating a domino effect of accounting headaches. The problem could be compounded by the IRS itself, which is already lacking enough accountants to efficiently process returns and now faces a government-wide hiring freeze by the Trump team in January 2025.
- In 2023, starting salaries for new CPAs increased over 2022 and bested inflation, but industry insiders suggest CPA firms need to do more to compete with other industries for top talent, according to the Journal of Accountancy. CPA employers increased 2023 starting salaries by 7%, three points higher than the inflation rate, according to the National Association of Colleges and Employers. Class of 2023 CPA starting salaries were $65,086 compared to $60,698 for Class of 2022. However, starting salaries for computer and information science positions in 2023 were $91,411. In addition to uncompetitive starting salaries, work overload and burnout hinder recruiting and retention. In recent flash polls of the top 500 firms outside the Big Four by the Association of International Certified Public Accountants (AICPA), 88% of firms said they increased starting pay in the last 12 months, and 57% said they plan to address workload balance.
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