Andersen Tax is the continuation of the former Arthur Andersen accounting firm that was one of the “Big Five” major accounting firms in the world until its demise in 2002. Andersen Tax was established in 2014 by former Arthur Andersen partners to rebuild the Andersen name in the accounting industry. The question of whether Andersen Tax is a prestigious firm depends on a few key factors.
Andersen’s history and reputation
Arthur Andersen was founded in 1913 and quickly grew to become one of the largest and most prestigious accounting firms in the world. At its peak, Arthur Andersen had around 85,000 employees in hundreds of offices across the globe. The firm handled auditing and accounting for many huge multinational corporations and was highly regarded for its standards of quality.
However, Arthur Andersen’s reputation was severely damaged in the 2001 Enron scandal when it was discovered that auditors had approved questionable accounting practices and destroyed documents related to auditing Enron. This led to the criminal indictment and ultimate collapse of Arthur Andersen in 2002.
So while Arthur Andersen was once a highly prestigious name in accounting, its association with the Enron scandal tarnished its reputation right before its closure. This scandal left a bad mark on the Andersen legacy.
Creation of Andersen Tax
In 2014, over a decade after Arthur Andersen’s closure, a group of former Arthur Andersen partners led by CEO Mark Vorsatz launched a new firm called Andersen Tax. They acquired the rights to the Andersen name and aimed to rebuild an accounting firm with the values of transparency, stewardship, and quality service that Arthur Andersen was originally known for.
Andersen Tax started with a few dozen partners and employees but has grown substantially over the past decade. As of 2022, Andersen Tax has over 9,000 employees spread across locations in the Americas, Europe, Middle East, Africa and Asia-Pacific regions. The firm offers a wide range of tax and advisory services.
So in essence, Andersen Tax is trying to revive the storied Andersen name and restart the legacy of the firm from scratch.
Prestige and reputation of Andersen Tax
Even though it shares the Andersen name, Andersen Tax is still a relatively new firm that is reestablishing itself in the accounting world. Here are some factors related to its prestige and reputation:
– Leadership and talent: Many partners at Andersen Tax are former Arthur Andersen employees who have decades of experience. The firm has been successful in attracting top talent away from the Big 4 and other firms. Its leadership team is filled with seasoned professionals in the industry.
– Quality of service and ethics: Andersen Tax has invested heavily in compliance, independence and ethics training to avoid any scandals and maintain high standards. Their focus is on transparency and stewardship to build goodwill.
– Clientele: In its decade of operations, Andersen Tax has successfully acquired clients like private equity firms, Fortune 500 corporations, nonprofit entities and more. Securing reputable clients is a sign of its capabilities.
– Industry awards: Andersen Tax has won some industry awards in recent years. For example, Accounting Today recognized them as one of the top 100 accounting firms in the nation based on revenue. They’ve also been ranked as a top workplace by various surveys.
– Geographic reach: With a presence across 4 continents, Andersen Tax has substantially grown its international footprint compared to when it started out in the US. Global scale and reach is an important factor for prestige.
– Still rebuilding reputation: Despite its progress, Andersen Tax is still in growth mode and does not yet have the name recognition of the Big 4 among the general public. It will take many more years of steady growth for Andersen Tax to be considered a truly top tier, prestigious firm.
How Andersen Tax compares to the Big 4
The Big 4 accounting firms – Deloitte, PwC, EY and KPMG – are widely seen as the most prestigious accounting firms today. Here’s how Andersen Tax measures up to them:
Firm | Revenue | Employees | Locations | Major Clients |
---|---|---|---|---|
Deloitte | $50.2 billion | 415,000 | 150+ countries | Amazon, AT&T, Bank of America, PepsiCo |
PwC | $43.0 billion | 284,000 | 157 countries | Apple, Coca-Cola, Facebook, Google, HP, Microsoft |
EY | $40.4 billion | 312,250 | 150+ countries | BP, Cisco, Comcast, Ebay, GE, Netflix |
KPMG | $30.0 billion | 227,000 | 147 countries | BMW, Citigroup, Huawei, Philips, Societe Generale, UBS |
Andersen Tax | $284 million | Over 9,000 | 28 countries | Brookfield, Carlson Companies, Foursquare, Reddit, SoFi |
As this table highlights, the Big 4 firms are still significantly larger than Andersen Tax in terms of revenue, employees, geographic presence and clientele. The Big 4 work with many more Fortune 500 and other multinational companies.
However, Andersen Tax has achieved respectable growth in its first decade considering its recent launch. Its client list includes many well-known companies and brands. The firm is on an upward trajectory even if it is not yet comparable to the scale of the Big 4.
Outlook for Andersen Tax
Here are some predictions for Andersen Tax’s future and its ability to become a more prestigious firm:
– Andersen Tax is likely to continue strong growth in revenue and talent acquisition. Its brand name gives it an edge in recruiting former Arthur Andersen employees who have fondness for the legacy firm.
– The firm will expand its service capabilities beyond tax and auditing to consulting, risk management, M&A advising and other high-margin services. Cross-servicing helps increase scope.
– Ongoing geographic and office expansion will give Andersen Tax more complete regional and global coverage.
– Andersen Tax will likely continue securing marquee clients to further boost its reputation. High-profile client wins give positive publicity.
– Acquisitions of smaller firms can accelerate growth. Andersen Tax has already acquired a few companies and may look to make more deals.
– Achieving high rankings and awards for workplace culture and ethics will be targeted, as that was an Arthur Andersen strong suit.
– Revenue growth to over $1 billion in the next 5-10 years is achievable based on current trajectory. This will make Andersen Tax more comparable to the second-tier accounting firms.
Overall, Andersen Tax is performing well in rebuilding the prestige associated with the Andersen name. While catching up to the Big 4 will be very difficult, Andersen Tax is on track to becoming a strong second-tier firm with greater recognition and reputation in the accounting industry. Consistent growth and ethical behavior will be key.
Conclusion
To summarize:
– Arthur Andersen was once one of the most prestigious accounting firms prior to its closure in 2002 due to the Enron scandal. This damaged the Andersen reputation.
– Andersen Tax was launched in 2014 by former Arthur Andersen partners aiming to restore the values and quality service of the original firm.
– Andersen Tax has achieved impressive growth in its first decade through talent recruitment, quality service, marquee client wins and geographic expansion.
– However, the firm is still much smaller than the Big 4 and rebuilding its brand recognition and reputation.
– With continued strong growth, high ethics and progress across services, clients and locations, Andersen Tax is on a steady path to regaining more of the prestige associated with the Andersen name. But it has not yet reached the top tier.
– Within the next decade, Andersen Tax is likely to cement itself as a leading second-tier accounting firm with greater prestige, even if still behind Deloitte, PwC, EY and KPMG.