An Analysis of Client-Industry Concentration for Large Public Accounting Firms.

Abstract The primary purpose of this study is to present client-industry concentration images for the larger public accounting firms in the United States. The data are broadly suggestive of the substance of audit work done for large corporate clients by these accounting firms and reflect only the sample of client-concentrations examined. The data presented, however, inadequately indicate how public accounting firms achieve their success and develop distinctive personalities. Which events, planned or accidental, cause firms to specialize in or avoid particular industries? Why has the leadership of industry concentrations among Big Eight firms remained remarkably constant from 1964 to 1971? What is the reason behind changes in auditors when a company switches from one Big Eight firm to another? Why have some Big Eight firms gained more New York and American Stock Exchange clients during the 7-year period than other firms? When firm histories are written by scholars from outside the firm, some of these answers may be forthcoming. There exists, then, considerable potential for deeper explorations into the development of public accounting firms, explorations which might provide answers to these questions.