What’s happening?  

Private equity (PE) firms — a type of investment company that buys, grows, and sells other companies to earn a profit — have been actively making investments in accounting firms. 

Key figures: 

• 10* of the Top 30 CPA firms in the U.S. have already signed investment deals with various private equity firms. 
• 2021: The first successful private equity investment took place when EisnerAmper received a strategic investment from TowerBrook Capital. 
• 7th largest U.S. accounting firm Grant Thornton signed a deal with New Mountain Capital in May 2024 — making this transaction the largest equity investment in accounting to date. 

*As of 6 May 2025 

In essence, non-CPA firms like private equity companies cannot own audit/attest firms. 

To bend the rules without outright breaking them, deals involving PE firms and accounting firms resulted in the so-called alternative practice structure (APS). 

In this case, APS happens when the accounting firm transfers the ownership of its non-audit/non-attest services (e.g., tax and consulting services) to the private equity firm.

Such complex business relationships and firm restructurings have been a source of concern, especially when it comes to maintaining auditor independence. 

“Private equity structures can be complex and can include entities that have varying levels of influence over other entities — either within their investment portfolio or within the contemplated structure.”  

- A statement from the United States Securities and Exchange Commission – Office of the Chief Accountant (SEC-OCA)* 

*Source: Auditor Independence and Ethical Responsibilities: Critical Points to Consider When Contemplating an Audit Firm Restructuring at https://www.sec.gov/newsroom/speeches-statements/munter-statement-auditor-independence-ethical-responsibilities-082922 

Despite these concerns, it’s undeniable that the capital infusion from PE investments isn’t easy to brush aside.  

Accounting firms that have received strategic investments have so far used the new capital to: 

• Upgrade technology 
• Attract and retain top talent 
• Buyout of retiring partners’ benefits 
• Increase operational expertise 
• Become more competitive 

We have yet to uncover the actual effects of PE firms’ investments in accounting firms. However, one thing must remain constant:  

Professional accountants and auditors must always stick to their principles and ethical duty to deliver objective and accurate results at all times. 

Adapting to the changes 

If your accounting firm has recently received PE investment and is hardly keeping up, getting an outsourced back-office support team can extend your capacity right when you need it. Message us at marketing@dvphilippines.com to know more about our services or download our whitepaper, Outsourcing: How to Make it Work.