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Public Accounting Profession - Negotiations

Like most young professionals, earning a reasonable livelihood ranked as a top priority for Scott Fane, a CPA specializing in taxation services who relocated to Florida in the mid-1980s. To practice as a CPA in Florida, Scott Fane registered with the Florida Board of Accountancy, which regulates the public accounting profession within the state of Florida. Scott Fane soon butted heads with that state agency. A protracted legal battle ensued. In 1993, the young CPA and the Florida Board of Accountancy finally settled their differences in the hallowed chambers of the U.S. Supreme Court.


1. In a professional services context, "lowballing" refers to the practice of underpricing one's competition to obtain clients. Identify the advantages and disadvantages of lowballing within the public accounting profession. Also identify the parties who benefit from this practice and the parties it harms.

2. Comment on the advantages and disadvantages of professions being regulated at the state, rather than federal, level.

Solution Preview

I am not a CPA, but do have a lot of experience in the accounting field and a lot of experience in the professional services industry.

1. Advantages of "lowballing" in an industry such as accounting are few in my opinion. I think that obviously, you may win contracts or bids, and may bring in more money in the short term. The problems, though, outweigh the advantages for many reasons. First, you tend to alienate yourself in an industry like this by undercutting. CPAs are often on state, local, and federal governmental ...

Solution Summary

The solution discusses negotiation tactics and the advantages and disadvantages.