Academic journal article Journal of Accountancy

Big Firms Merge; Smaller Ones Ponder

Academic journal article Journal of Accountancy

Big Firms Merge; Smaller Ones Ponder

Article excerpt

The business press was still publishing news stories on the proposed merger between Coopers & Lybrand and Price Waterhouse (see "And Then There Were Five," JofA, Dec. 97, page 10) when Ernst & Young and KPMG Peat Marwick seized the headlines with their own merger plans, which would create an even larger firm. The resulting E&Y/KPMG firm would have

* More than $18 billion in revenues.

* Close to 13,000 partners.

* Philip Laskawy, Ernst & Young's chairman and chief executive officer, as chairman.

* Stephen G. Butler, KPMG's chairman and CEO, as CEO.

Although the pundits did not specifically predict this latest merger when C&L and PW made their announcement, Gary J. Previts, professor of accountancy at the Weatherhead School of Management, Case Western Reserve University, Cleveland, and J. Curt Mingle, a member of Clifton, Gunderson LLC, in Ephraim, Wisconsin, both had told the Journal in last month's article that they were expecting more high-level mergers.

Picking up clients -- and staff

The Journal asked several members of the American Institute of CPAs practice group B advisory committee, which serves as a forum for the largest non-Big Six (or Four) firms, to share their personal thoughts on the implications these mergers have for other firms.

"I believe the mergers may cause some of the smaller companies to leave the Big Four and thus give us and similar firms a chance to bring them in as clients," said Lawrence M. Zagarola, a partner of J. H. Colin in Roseland, New Jersey. Cohn has about 38 partners. William E. Fingland, Jr., a partner of Baird, Kurtz & Dobson, a 119-partner firm in Springfield, Missouri, is also looking for clients. …

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