How Profitability Affects Income Allocation

Man counting $100 bills into three pilesDon’t put the one-firm concept at risk.

By Marc Rosenberg
Partner Comp: Art & Science

Intuitively, it makes sense for any organization (not just CPA firms) with multiple locations and departments to measure the profitability of each area.

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Industrial companies routinely measure profits by product or plant. Why shouldn’t CPA firms do the same, especially with the most obvious candidates: the accounting and auditing (A&A) and tax departments?