[mlwl8521]

What is a tier 2 accounting firm?

A) Big enough to audit publicly traded companies?

B) Ranked in the top 20 by annual revenue?

C) Has a nationwide footprint?

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CPA licensed - 2013
2 years public accounting
MAcc GPA 3.8

[Anonymous]

Here's some information:

• The BIG 4 accounting firms: These are the companies that advertise on TV, at golf tournaments and in airports. The names are familiar: Deloitte & Touche LLP, Ernst &Young LLP, KPMG LLP and PricewaterhouseCoopers LLP. These firms are for BIG companies. It is actually easier for a BIG company to find a good accounting firm, because there is just the BIG 4 accounting firms to choose from. Some smaller companies will pay the extra money just to get the expertise of the BIG 4 because they can’t find the right firm. However, the BIG accounting firm’s fees are very large, ranging from hourly rates of $200 (for a jr. associate) to $800 an hour. And typically, a smaller company will not receive the same customer service as a larger client.

• The tier two accounting firms: These firms are right below the BIG 4 accounting firms. Some tier two accounting firms include: Grant Thornton LLP, BDO Seidman LLP, and RSM McGladrey LLP. These firms are similar to the BIG 4, but have a smaller client base focus of middle market companies. However, each has a different definition of a middle market company, and they are on a constant search for larger clients. The tier two accounting firm fee’s range from $195 to $600 an hour. Smaller companies or middle market companies will go to a tier two accounting firm to get better customer services as they are typically too small for the BIG 4.

I've worked for both sizes, and I'd say the description is pretty accurate.

[mlwl8521]

So when you say “middle market” client, are you talking about the client's size, or how high the fees that the client is able and willing to pay? How big are we talking here in terms of client's annual revenue? Right now, my “big” client is a local government with an annual revenue of $32M haha.

So what's considered a medium sized client in public accounting?

EDIT: Would you consider CohnReznick, CliftonLarsonAllen, and Cherry Bekaert all tier 2s?

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CPA licensed - 2013
2 years public accounting
MAcc GPA 3.8

[fuzyfro89]

I may be different, but when I think “tier 2”, I think BDO/Mcgladrey/Grant Thornton. After that, there's a big drop off to the next firms which are more regional.

[Author]

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