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
Mar 14, 2025 - IRS to Cut 18,000 Jobs
- The Internal Revenue Service (IRS) stands to lose about 20% of its workforce by May 15 due to staffing cuts ordered by the Trump administration. The expected layoffs of approximately 18,000 IRS workers is part of the Department of Government Efficiency’s (DOGE) government-wide purge of federal workers. Tax industry experts warn that the staff cuts coming so close to the government’s April 15th tax deadline will undoubtedly negatively impact the agency’s ability to process returns, refunds, and collections. The effects could ripple further than just tax return processing, though, since the IRS collects funds that pay for virtually all of the federal government. Trump has already fired 6,700 probationary IRS employees, but a federal judge in March ordered those cuts be reversed.
- A wave of private equity investment in accounting firms, and the resulting increase in merger and acquisition activity that inevitably results, has the industry focused on rapid revenue growth. About half of the largest US accounting firms have at least one, “chief growth officer,” according to employment statistics from Live Data Technologies. Accounting has long been an industry uninterested in the volatility that comes with quickly growing the bottom line - corporate and private accounting needs are constant and consistent. The turn towards private equity investment is changing that long-standing trend as smaller, independent firms consolidate into bigger, ideally more efficient companies that can better compete. Firms shunning the PE influx are turning to internal growth strategies such as expanding operations and business lines. PE involvement in the accounting industry has raised concerns about financial transparency and potential conflict of interests among investors.
- 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.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.