Accounting, Tax & Audit
CPA firms, tax advisors, and audit practices providing financial reporting, compliance, and tax planning services to businesses and high-net-worth individuals.
- 7
- Segments
- 36
- Verticals
Overview
Accounting, Tax & Audit covers the firms that keep companies compliant and financially legible — CPA practices, tax preparers and advisors, payroll processors, and outsourced finance-and-accounting providers. The work splits into four economic engines: assurance (independent audits and reviews), tax (compliance plus higher-value advisory), payroll, and day-to-day bookkeeping and F&A outsourcing.
The industry is overwhelmingly a profession of small partnerships and independent shops, with a thin layer of national brands and the Big Four at the top of the audit market. Revenue blends recurring annual cycles (tax season, audit engagements, monthly close) with project advisory, which makes books predictable but tightly bound to professional labor and partner capacity.
Market snapshot
- Market size
- ~$209B
- Growth
- ~6.5%CAGR (2017–22, nominal)
- Companies
- ~120,223 firms
95.1% of firms have fewer than 20 employees: 114,350 micro-businesses, below most mandates.
- 20–99
- 4,43976%
- 100–499
- 89015%
- 500+
- 5449%
The category is a barbell: ~95% of firms have fewer than 20 employees, while 544 exceed 500. Payroll processing is the only consolidated segment — audit, bookkeeping and tax preparation are all highly fragmented, and in the latter two more than 80% of businesses have no employees at all.
NAICS 541211, 541213, 541214, 541219. U.S. Census Bureau — 2022 Statistics of U.S. Businesses; U.S. Census Bureau — 2022 Economic Census.
Business model & economics
Revenue model
Fee-for-service plus recurring compliance and retainer work
Key economics
- Revenue per firm
- $1,737,169
- Revenue per employee
- $159,011
- Employees per firm
- 10.2
- Recurring revenue
- Moderate–High
- EBITDA margin
- 15–30% (owner-comp adjusted)
- Capex intensity
- Low
annual tax and audit cycles, monthly bookkeeping and payroll
Characteristics
- Balanced cost base — payroll is 41% of revenue, leaving room to scale margin without cutting staff
- Owner-operator dominated — 77% of businesses have no employees but take only 6% of revenue
- Deep strategic-buyer pool — 544 firms exceed 500 employees, so a scaled asset has trade buyers
- People-driven economics — capacity and margin track billable professional headcount.
- Recurring compliance work anchors retention; advisory carries the premium pricing.
- Licensure, peer review, and regulatory barriers limit who can sign opinions.
NAICS 541211, 541213, 541214, 541219. U.S. Census Bureau — 2022 Statistics of U.S. Businesses; U.S. Census Bureau — 2022 Economic Census; U.S. Census Bureau — 2022 Nonemployer Statistics.
M&A deal context
Who’s acquiring
- PE-backed accounting platforms
- Regional firm roll-ups
- Payroll & fintech strategics
What’s driving deals
- Private equity entering CPA firms in force since 2021 via alternative practice structures.
- Partner succession and a shrinking CPA pipeline forcing sales and mergers.
- Automation and offshoring shifting mix from commodity compliance to advisory.
- Platforms cross-selling tax, audit, payroll, and F&A across an acquired client base.
Segments in this industry
- 1.1.1Audit & Assurance6 verticals
- 1.1.2Bookkeeping, Accounting & F&A Outsourcing5 verticals
- 1.1.3Forensic Accounting & Litigation Support5 verticals
- 1.1.4Payroll Processing & Compliance5 verticals
- 1.1.5State & Local Tax (SALT)5 verticals
- 1.1.6Tax Advisory & Planning5 verticals
- 1.1.7Tax Compliance & Preparation5 verticals
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