Marketing of Accounting
The marketing of an accounting firm involves many stipulations that engross ethics, trust, competition and discrimination. When examining the effect of open marketing of accounting it is important to view it from three perspectives: the client's, the firm's, and a society's. Additionally, two key areas that are affected by marketing must be addressed, these are concerning competition and ethical implications. The main focus is to show that marketing accounting firms is necessary, but in order to achieve maximum benefit to the firm, the client, and society, more stringent guidelines must be implemented at the firm level. The first, and most obvious, of the effected areas is competition. Within competition several points are discussed. Foremost, the implications advertising has on public accounting, the model of perfect competition versus the model of monopolistic competition. Secondly, the relationship between firm size and the firm's advertising expenditures. Thirdly, the effect of advertising on firm specialization, the implications of client turnover on public accounting practice. Before making the comparison, a brief explanation why the two models are chosen is in order. Monopolistic competition has been chosen
The industry experienced phenomenal growth in the Eighties followed by a near halt. Firms, which previously served a client base from year to year, must face the uncertainty of retention of their client base now. Firms' overhead costs increase because the expenses of replacing clients must be absorbed. In order to compete firms must place more emphasis on marketing and accept it as a cost of doing business. In the March 1990 issue of the CPA Journal Arvid Mostad, CPA published an article in which he set up "CPA Marketing: Getting New Clients to Find You. As a result these firms will grow while small firms struggle. However when supply increases, such is the effect of adding advertisement to public accounting practice, the supply curve shifts right causing prices to fall" (Thompson 485). Put simply, a firm would not look kindly toward a partner who lost a new client. Smaller firms only hope is to emphasize "personalized service" in tax and full service areas in hope that audit services can result. He goes on to encourage small firms to "establish an area of expertise" (Mostad 54). Lawrence Ponemon, CPA, author of "Research on Accounting Ethics, Volume 4, 1998", published in The CPA Journal states "Two deviant practices have become commonplace in today's market. Big Six firms and large regional firms hold these resources. Several drawbacks of this are increased overhead costs to firms, less stability, and greater service cost. One may then infer that once a client is obtained, a firm would wish to do business with that client for an extended number of years, in order to realize the benefit of expenses incurred. Advertising in public accounting causes perspective clients to become bottom line oriented meaning the firms with the most available revenue to dump into advertising, coupled with the resources to offer lowest fees are the ones that grow.
Common topics in this essay:
Getting Clients,
CPA Journal,
,
CPA CPA,
Fake INC,
Accounting Review,
Fake Inc,
Accountants AICPA,
public accounting,
client base,
Mostad CPA,
Ethics Volume,
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monopolistic competition,
advertising public accounting,
advertising public,
audit services,
market pressures,
integrity profession,
model perfect,
marketing accounting,
model perfect competition,
below cost pricing,
little service differentiation,
relationship firm size,
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Acceptance Essays
