Practice continuation agreement

A practice continuation agreement (PCA) allows another firm or trusted staff person to take over an accounting practice for a period of time, depending on certain triggering events, such as the illness or permanent disability of the CPA. The PCA includes provisions for the responsibilities of the entity that will take over, the conditions under which the arrangement will terminate, billing and collection procedures, compensation to be paid to the successor, record retention rules, announcements to clients, staff oversight, and the terms associated with the purchase of the CPA’s practice in the event of permanent disability or death. Entering into a PCA is a prudent move for very small firms that have no backup personnel in-house.

A sole practitioner who wants to set up a PCA should review prospective candidates to see if they have sufficient capacity to take on the CPA’s practice, as well as comparable pricing, relevant expertise, and a comparable culture.

Related Courses

CPA Firm Mergers and Acquisitions