McGladrey and the Great Depression: A Silver Lining Story for CPAs


We’re pretty sure you’ve had your fill of doom-and-gloom lately – even though the accounting industry as a whole is doing fairly well weathering the economic storm, everyone’s naturally feeling the pressure and a bit unsure of how 2009 will unfold both personally and professionally.

In the interest of painting an encouraging picture of the industry’s ability to face adversity and come out on top, we thought you might be interested in the tale of Ira McGladrey – namesake of accounting’s 5th largest firm (in 2008) and industry stalwart who brought auditor opinion to accounting after helping his firm survive the Great Depression.

The story goes back to 1926, when Mr. McGladrey started his small accounting firm in Cedar Rapids, IA. A mere 3 years later, the stock market crashed and the Great Depression sunk its teeth into the fiscal well-being of America (sound a bit familiar?).

That same year, when it looked as if everyone else in the industry was getting hit hard by financial turmoil, Ira McGladrey kept his commitment to his staff – instead of layoffs, he actually hired on new employees! The I.A. McGladrey company kept on in the face of adversity and opened up additional locations in Iowa in the years following. In 1937, the firm admitted George Hansen and Keith Dunn as partners, transforming the practice into McGladrey, Hansen, Dunn & Company.

In 1942 as World War II raged on, the firm did its part for America as many clients, employees, and even Ira McGladrey himself were sent off for military service.

According to the official RSM McGladrey press release, Mr. McGladrey again changed the face of accounting in 1946:

In 1946, he urged the American Institute of Certified Public Accountants to adopt a rule requiring accountants to express an opinion about their clients financial condition, or acknowledge they didnt have enough information to offer an opinion. Prior to this, accountants wrote neutral statements rather than offend the client. In 1949, this rule was finally adopted and it still stands today.

And where does that put McGladrey today?

In 2001 (the same year iPods were introduced to the world), McGladrey, its 2400+ employees, and 100 offices nationwide celebrated 75 years of providing a multitude of client-orientated services to midsized business.

As of 2007, McGladrey & Pullen LLP and RSM McGladrey Inc. are member firms of RSM International, the seventh-largest worldwide accounting and consulting organization with more than 600 offices in 70 countries. Together, McGladrey & Pullen and RSM McGladrey employ approximately 8,000 people in 100 offices across the country. The combined firms ranked No. 5 on Accounting Today’s 2007 list of the top-100 firms in the U.S., with over $1.3 billion in revenue.

Pretty impressive considering the odds Ira McGladrey faced in the early days of the firm; and yet another reminder that there is more than doom-and-gloom out there if you care to look for it. Sure, the Big 4 have cut down their hiring frenzies and it is more important than ever to secure CPA licensure if you are planning on entering or remaining in the accounting industry, but there is hope that just as Ira McGladrey did during the Great Depression, the industry can overcome whatever financial uncertainty awaits us.

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