Partnership Versus Public Ownership of Accounting Firms: Exploring RelativePerformance, Performance Measurement and Measurement Issues

• Main Author: Mark E Pickering
• Format: Article
• Language: English
• Published: University of Wollongong 2012-09-01
• Series: Australasian Accounting, Business and Finance Journal
• Subjects: Professional services; partnership; public ownership; accounting firms; performance; publicly quoted
• Online Access: http://ro.uow.edu.au/aabfj/vol6/iss3/5

Despite theoretical arguments that partnerships are the most efficient ownership form for professional service firms (PSFs), PSFs are increasingly moving to other ownership structures, such as publicly listed companies (PLCs). Research on the comparative performance of PSF, PLCs and partnerships is sparse with conflicting results suggesting that some segments of PSFs are moving to a less efficient form. This study explores the performance of two Australian accounting PLCs compared to a sample of similar sized mid tier accounting firms. The accounting PLCs achieved substantially higher revenue growth rates but lower productivity than the partnership sample. Measurement issues were identified in the use of closing resource numbers and different treatment of reporting merger and acquisition revenues which may partially explain the underperformance of publicly owned PSFs in prior studies. The need for research at a more detailed level exploring the market and service focus, organisational structures, resources utilised and resource costs across different PSF ownership forms is suggested.