The largest public accounting firms typically are structured as
A) Subchapter S corporations.
B) Professional corporations.
C) Limited liability partnerships.
D) Limited liability corporations.

Question

Quizplus · Accepted Answer

The largest public accounting firms typically choose to structure themselves as limited liability partnerships (LLPs) because they provide a level of personal asset protection to the partners while also allowing for the flexibility of a partnership structure. LLPs also provide pass-through taxation, which allows for the profits and losses of the firm to be reflected on the individual tax returns of the partners rather than being subject to corporate taxation. While other structures such as professional corporations or limited liability corporations may be viable options for some firms, LLPs are the most common choice for the largest public accounting firms.

The Largest Public Accounting Firms Typically Are Structured as