Accounting
PE is just the start of the changes coming for accounting firms
The entry of private equity into public accounting over the past four years has certainly brought a great deal of change to the profession – but it’s likely only the tip of the iceberg compared to what’s to come, experts suggest.
“I wake up every morning and I pinch myself, either because something new has happened that I didn’t see coming, or it’s something that’s never happened in our profession before,” Allan Koltin, the CEO of Koltin Consulting Group and a pioneer of connecting PE firms and accounting firms, told attendees at the AICPA Executive Roundtable, a gathering of technology executives held in New York City this week.
“You have a lot of crazy stuff going on,” he added. “Transformation is in the air.”
To start, PE/accounting firm partnerships have been taking on different forms, according to Koltin:
- The mother ship. This was the first model, where a PE firm would buy in to a Top 25 Firm and provide them with capital to go out and tuck in smaller Top 500 firms.
- Roll-ups. These work by acquiring a number of midsized firms, but not necessarily merging them all into a single firm. Instead, each firm pursues its own strategy. Interestingly, something similar had been tried before the turn of the century, Koltin noted: “In the 1990s, this didn’t work, but it’s working very well now.”
- The mid-majors. This involves middle-weight PE firms coming in and acquiring accounting firms in the Top 30-Top 100 range.
- Within those categories there are a wide range of internal differences — majority stakes, minority stakes, PE firms focusing on different forms of support for their accounting firm partners, and so on — but the entry of private equity has also spurred accountants to look at entirely different options to solve their capital needs, Koltin said.
For instance, BDO USA and Grassi have both implemented employee stock ownership plans, opening the door for many firms to consider them (and a smaller firm, Kirsch CPA Group, did the same just this week), and other firms are considering deals with wealth management firms, as when BerganKDV sold itself to Creative Planning.
Other buyers may also emerge, such as sovereign wealth firms, family offices, and pension funds, either as original acquirers or when PE funds reach the end of their first investment periods and look to sell their stakes.
What’s more, Koltin said that in the next three to four years, he wouldn’t be surprised to see some of the largest accounting firms launching initial public offerings to take themselves public, and still others putting together truly global firms, with a single ownership and management structure across a number of countries, rather than the current networks of firms run by the Big Four and a few others.
All of this would represent a massive amount of change for the profession, but that wouldn’t surprise Koltin: “I have seen more change in the last four years than in the first 40 years of my career,” he said, “and we’re just getting started.”
(See Koltin’s
Where is it all headed?
While private equity has actually been trying to get involved in the profession for some time — Koltin detailed attempts as early as 2008 that were only stymied by the onset of the Great Recession — it is still relatively early to judge PE’s full impact on accounting.
“If this were a baseball game, we’re in the second or third inning,” said Matthew Marinaro, a principal at PE firm Red Iron Group, during the same session at the Executive Roundtable. “There’s a lot of room for consolidation.”
There’s also room for many more PE firms to get involved. Marinaro likened it to a “kids’ soccer game, where all the kids run to the ball.”
“PE is kind of like that,” he explained. “One firm will figure it out, and then all the others will rush in for fear of being left out.”
Koltin agreed that there is much more to come on the PE front, but he also warned against firms suffering from fear of missing out.
“Where is all of this going?” he asked. “When PE comes into an industry, they don’t dabble — they take it over. That doesn’t mean you’ll fail if you don’t take on PE — some of the most successful companies are those that remain independent. But the successful ones have figured out their strategies for bringing in capital.”
And not every PE deal will live up to the hype.
“They won’t all be home runs,” Koltin said. “There will be great, there will be good, and there will be busts. If you take a great accounting firm and combine it with a great PE firm that is aligned on their strategy — then a great firm, a great PE firm, and great strategy will produce a great result. But there will be some weak accounting firms that are trying to fix an internal problem, and those might not do so well.”
Only for the 5%
While private equity will undoubtedly have a big impact on the profession, AICPA president and CEO Barry Melancon noted that for most firms, that impact won’t be direct.
“In five years, 95% of our 44,000 firms will still be in the traditional model, because the PE model won’t go down that far,” he told attendees of the roundtable.
That’s not to say he’s opposed exploring other options.
“I’m a big supporter of different models in the profession,” he said. “I’ve always believed that, because then we can see which ones work and which ones don’t, and how we can improve them.”
But he does have some concerns about whether private equity may not understand the profession’s values, its public service mission, and its true value proposition.
“If you look at PE in the medical industry, I don’t think anyone would say that the service is better there,” he said. “That’s a concern for the profession.”
“I think many PE firms underestimated the recurring value of tax, as opposed to accounting,” he added. “If PE is going to be really successful, it’s going to have to understand the value of what this profession does and gets paid for. … Many PE firms are moving away from or not interested in the public company audit space.”
Private equity firms will also need to understand the importance and the value of the trusted advisor position that accountants occupy.
“If you compare CPA firms that are advisory firms with consulting firms that are not affiliated, CPA firms are more profitable than the stand-alone consulting firms,” he explained. “And the reason for that is the reputation that the profession brings with it – and private equity is going to have to figure that out, and understand the extra value that it brings long-term.”
Jody Padar, an author and speaker known as “The Radical CPA,” and Katie Tolin, a growth strategist for CPAs, together launched a training and technology platform called XcelLabs.
XcelLabs provides solutions to help accountants use artificial technology fluently and strategically. The Pennsylvania Institute of CPAs and CPA Crossings joined with Padar and Tolin as strategic partners and investors.
“To reinvent the profession, we must start by training the professional who can then transform their firms,” Padar said in a statement. “By equipping people with data and insights that help them see things differently, they can provide better advice to their clients and firm.”
The platform includes XcelLabs Academy, a series of educational online courses on the basics of AI, being a better advisor, leadership and practice management; Navi, a proprietary tool that uses AI to help accountants turn unstructured data like emails, phone calls and meetings into insights; and training and consulting services. These offerings are currently in beta testing.
“Accountants know they need to be more advisory, but not everyone can figure out how to do it,” Tolin said in a statement. “Couple that with the fact that AI will be doing a lot of the lower-level work accountants do today, and we need to create that next level advisor now. By showing accountants how to unlock patterns in their actions and turn client conversations into emotionally intelligent advice, we can create the accounting professional of the future.”
“AI is transforming how CPAs work, and XcelLabs is focused on helping the profession evolve with it,” PICPA CEO Jennifer Cryder said in a statement. “At PICPA, we’re proud to support a mission that aligns so closely with ours: empowering firms to use AI not just for efficiency, but to drive growth, value and long-term relevance.”
The accountant the world urgently needs has evolved far beyond the traditional role we recognized just a few years ago.
The transformation of the accounting profession is not merely an anticipated change; it is a pressing reality that is currently shaping business decisions, academic programs and the expected contributions of professionals. Yet, in many areas, accounting education stubbornly clings to outdated, overly technical models that fail to connect with the actual demands of the market. We must confront a critical question: If we continue to train accountants solely to file tax reports, are we truly equipping them for the challenges of today’s world?
This shift in mindset extends beyond individual countries or educational systems; it is a global movement. The recent announcement of the
The CIMA/CGMA proposal for 2026 is not just a curriculum update; it is a powerful manifesto. This new program positions analytical thinking, strategic business partnering and technology application at the core of accounting education. It unequivocally highlights sustainability, aligning with IFRS S1 and S2, and expands the accountant’s responsibilities beyond mere numbers to encompass conscious leadership, environmental impact and corporate governance.
The current changes in the accounting profession underscore an urgent shift in expectations from both educators and employers. Today, companies of all sizes and industries demand accountants who can do far more than interpret balance sheets. They expect professionals who grasp the deeper context behind the numbers, identify inconsistencies, anticipate potential issues before they escalate into losses, and act decisively as a bridge between data and decision making.
To meet these expectations, a radical mindset shift is essential. There are firms still operating on autopilot, mindlessly repeating tasks with minimal critical analysis. Likewise, many academic programs continue to treat accounting as purely a technical discipline, disregarding the vital elements of reflection, strategy and behavioral insight. This outdated approach creates a significant mismatch. While the world forges ahead, parts of the accounting profession remain stuck in the past.
The consequences of this shift are already becoming evident. The demand for compliance, transparency and sustainability now applies not only to large corporations but also to small and mid-sized businesses. Many of these organizations rely on professionals ill-equipped to drive the necessary changes, putting both business performance and the reputation of the profession at risk.
The positive news is that accountants who are ready to thrive in this new era do not necessarily need additional degrees. What they truly need is a commitment to awareness, a dedication to continuous learning, and the courage to step beyond their comfort zones. The future of accounting is here, and it is firmly rooted in analytical, strategic and human-oriented perspectives. The 2026 curriculum is a clear indication of the changes underway. Those who fail to think critically and holistically will be left behind.
In contrast, accountants who see the big picture, understand the ripple effects of their decisions, and actively contribute to the financial and ethical health of organizations will undeniably remain indispensable, anywhere in the world.
Congressional Republicans are siding with Donald Trump in the messy divorce between the president and Elon Musk, an optimistic sign for eventual passage of a tax cut bill at the root of the two billionaires’ public feud.
Lawmakers are largely taking their cues from Trump and sticking by the $3 trillion bill at the center of the White House’s economic agenda. Musk, the biggest political donor of the 2024 cycle, has threatened to help primary anyone who votes for the legislation, but lawmakers are betting that staying in the president’s good graces is the safer path to political survival.
“The tax bill is not in jeopardy. We are going to deliver on that,” House Speaker Mike Johnson told reporters on Friday.
“I’ll tell you what — do not doubt, don’t second guess and do not challenge the President of the United States Donald Trump,” he added. “He is the leader of the party. He’s the most consequential political figure of our time.”
A fight between Trump and Musk exploded into public view this week. The sparring started with the tech titan calling the president’s tax bill a “disgusting abomination,” but quickly escalated to more personal attacks and Trump threatening to cancel all federal contracts and subsidies to Musk’s companies, such as Tesla Inc. and SpaceX which have benefitted from government ties.
Republicans on Capitol Hill, who had — until recently — publicly embraced Musk, said they weren’t swayed by the billionaire’s criticism that the bill cost too much. Lawmakers have refuted official estimates of the package, saying that the tax cuts for households, small businesses and politically important groups — including hospitality and hourly workers — will generate enough economic growth to offset the price tag.
“I don’t tell my friend Elon, I don’t argue with him about how to build rockets, and I wish he wouldn’t argue with me about how to craft legislation and pass it,” Johnson told CNBC earlier Friday.
House Budget Committee Chair Jodey Arrington told reporters that House lawmakers are focused on working with the Senate as it revises the bill to make sure the legislation has the political support in both chambers to make it to Trump’s desk for his signature.
“We move past the drama and we get the substance of what is needed to make the modest improvements that can be made,” he said.
House fiscal hawks said that they hadn’t changed their prior positions on the legislation based on Musk’s statements. They also said they agree with GOP leaders that there will be other chances to make further spending cuts outside the tax bill.
Representative Tom McClintock, a fiscal conservative, said “the bill will pass because it has to pass,” adding that both Musk and Trump needed to calm down. “They both need to take a nap,” he said.
Even some of the House bill’s most vociferous critics appeared resigned to its passage. Kentucky Representative Thomas Massie, who voted against the House version, predicted that despite Musk’s objections, the Senate will make only small changes.
“The speaker is right about one thing. This barely passed the House. If they muck with it too much in the Senate, it may not pass the House again,” he said.
Trump is pressuring lawmakers to move at breakneck speed to pass the tax-cut bill, demanding they vote on the bill before the July 4 holiday. The president has been quick to blast critics of the bill — including calling Senator Rand Paul
As the legislation worked its way through the House last month, Trump took to social media to criticize holdouts and invited undecided members to the White House to compel them to support the package. It passed by one vote.
Senate Majority Leader John Thune — who is planning to unveil his chamber’s version of the bill as soon as next week — said his timeline is unmoved by Musk.
“We are already pretty far down the trail,” he said.
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