Andersen Demise helps accounting firms with revenue.

RETAINING THE TOP SPOT for Arkansas' biggest accounting firm, BKD LLP's Little Rock office grew in personnel and revenue in 2002.

The number of CPAs rose to 58 from 55, and revenue surged to $20.15 million from $19.5 million for the year ending May 31, said managing partner Steven Warren.

At 50 other professionals, it might appear BKD lost one-third of those positions from last year's 74. But company officials blamed the decline on a company miscount last year in the number of non-CPA professionals. The firm's total professional staff is now 108.

Part of the gain in CPAs for BKD were more accountants passing the state's CPA exam, and the revenue gain was from the ripple effect of Arthur Andersen's demise.

"Obviously, (Andersen's collapse) freed up some business, and we picked up some nice clients as a result," Warren said, although no Arthur Andersen CPAs migrated to BKD. "We hire top students and train them very well. Our people are very good at passing the [CPA] exam quickly."

Andersen, with 25 CPAs in Arkansas, was the states's sixth-largest firm in 2001 based primarily on business with Alltel, which switched to Pricewater-houseCoopers, as Andersen collapsed nationally.

Moore Stephens Frost, led by Greg Flesher, remained in second but lost one CPA to slip to 37 and picked up two other professionals, upping its professional staff slightly to 82.

Ernst & Young LLP's Little Rock office, led by Charles Harvell, and Beall Barclay & Co. of Fort Smith, led by David Damron, each lost two CPAs.

Deloitte & Touche's Little Rock office, led by Mike Haigh, picked up four CPAs, which was enough to move it to the No. 5 spot ahead of Hudson Cisne Thessing & Co. LLP, which was down one CPA. However, Deloitte & Touche lost five other professionals, and Hudson Cisne lost one.

Jones & Co. Ltd. of Jonesboro, led by Phil Jones, Hal White, Sherry Stringer, Bill Foster and Brent Stidman, went from 13 to 12 CPAs, and picked up three other professionals to rise to 21 professional staff members.

Engstrom Grayson Green & Patterson CPAs of North Little Rock, led by Bruce Engstrom, saw a one-third decline in the number of CPAs, to nine from 14, but added other professionals to limit the loss of total professionals to just one.

Engstrom's numbers decline is somewhat misleading, according to partner Mike Grayson. The firm launched last fall Corporate Financial Outsourcing, a company that essentially replaces businesses' accounting departments, said Grayson, who also acknowledged some staff shrinkage.

Clients so far include a funeral home, a nonprofit and a "pretty good sized" company.

The partners got the idea from several East Coast firms. It allows businesspeople to focus on their business and leave the hassle of back office management to others, Grayson said.

Jeffery Phillips Mosley & Scott PA of Little Rock pushed its non-certified staff to pass the CPA exam, said managing partner Jim Phillips. The result in a gain of four CPAs and the loss of six in the "other professionals" category. Its offices were also moved to Cantrell Road from Rodney Parham Road.

Several firms raised the lower end of their hourly fee range; Hudson Cisne Thessing & Co. LLP by $20, Jones & Co. Ltd. by $3, Jeffery Phillips Mosley & Scott PA by $35, Mallory & Associates CPAs by $7 and Bell & Co. by $5.

Some firms also dropped the lower end of their hourly fee range by a few dollars: Engstrom Grayson Green & Patterson CPAs by $10, Howland & Norris by $5 and Brown Rogers & Co. by $5.

Also, officials at McElroy & Keen & Co., which was No. 28 on last year's list, declined to participate in this year's survey.