L.A. accounting offices recorded solid growth on their ledgers for the past 12 months – and early indicators point toward another strong run in front of them.
The top 100 companies on the Business Journal’s annual list of accounting firms reported a cumulative growth rate of 5.5 percent in accounting professionals staffing their offices in Los Angeles County, just about double the pace of the previous year.
The top 100 firms combined for 11,150 accounting professionals in their L.A. offices as of last month, up nearly 600 from a year ago and nearly 900 from two years ago.
A robust local economy, a steady stream of mergers and acquisitions and the accounting firms’ own moves to diversify into technology consulting contributed to the growth in accounting staff over the whole year.
“Our practice is mirroring the strong local economy,” said Patricia O’Connell, partner and chief operating officer with West Los Angeles-based Holthouse Carlin & Van Trigt, which at No. 5 on the Business Journal list, is the largest locally based accounting firm. HCVT added 58 accounting professionals over the last 12 months for a total of 346, representing a growth rate of 20 percent.
“We’re seeing expanded work from our existing clients and bringing in a lot of new clients,” O’Connell said.
Among the areas she said are seeing the strongest demand for accounting and related services: handling mergers and acquisitions, real estate, private equity deals and baby boomer clients looking to sell their businesses.
Tax reform boost
The trend also got a year-end boost with the passage of the federal tax reform act, which is likely to drive demand for more accounting services as companies and individuals sort out its ramifications.
The legislation is the largest tax reform package enacted since 1986. It includes permanent cuts in corporate tax rates and temporary reductions on individual tax rates. It offsets some of the effects of the cuts by removing numerous deductions, including for state and local taxes. It also changes tax rates for pass-through income from businesses, which is expected to benefit independent contractors, small business owners and many investment funds. And it lowers the tax rate for cash or assets brought back into the U.S. from overseas.
All the changes mean more work for accounting firms.
“It’s much broader than just figuring out the tax dollars,” said Stefanie Kane, Los Angeles market managing partner with the downtown office of PricewaterhouseCoopers, the top firm on the Business Journal list. “Steps will likely be taken to prepare for or react to tax reform, such as changing legal entity organization and capital asset acquisitions or deployment.”
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