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CohnReznick gets PE investment from Apax

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CohnReznick, a Top 25 Firm based in New York, is the latest accounting firm to receive a private equity investment, in this case from funds advised by Apax Partners, a private equity investment advisory firm also based in New York.

This represents the first institutional investment in CohnReznick. The firm plans to use the extra funding to accelerate its growth strategy, deliver more client services and attract talent. Apax will support CohnReznick in expanding service lines, developing technology for client solutions, entering new markets, developing talent and advancing its existing tech platform to drive further innovation and efficiency. Apax also plans to support CohnReznick in pursuing a targeted acquisitions strategy to further grow its client base. CohnReznick was the result of a merger in 2012 between JH Cohn and Reznick Group.

CohnReznick has over 5,000 global employees and more than 350 partners in 29 offices across the U.S. It earned $1.12 billion in revenue in fiscal year 2025. It ranked No. 16 on Accounting Today‘s 2024 list of the Top 100 Firms. The firm has clients in a variety of industries, including real estate, financial services and financial sponsors, private client services, consumer, manufacturing, renewable energy and government advisory.  

“Our partnership with Apax is a milestone moment in  CohnReznick’s history,” said CohnReznick CEO David Kessler in a statement Wednesday. “We have consistently delivered strong growth and cemented our position in  the mid-market, thanks to our best-in-class talent, industry expertise, and comprehensive service offerings. This strategic investment from the Apax Funds will help us continue on our growth trajectory, expanding our solutions and geographic presence to meet client needs while continuing to create exciting career growth for our people. We were impressed by the Apax team’s track record in the professional services sector and their experience in driving operational excellence in complex businesses like ours, while continuing to create a best-in-class experience for employees and clients.” 

Once the transaction closes, CohnReznick will operate in an alternative practice structure, as has become common with private equity funding of accounting firms  CohnReznick LLP, a licensed CPA firm, will be led by Kelly O’Callaghan as CEO and provide attest services. CohnReznick Advisory LLC (which will not be a licensed CPA firm) will provide tax, advisory and other non-attest services, and will be led by Kessler as CEO.  

“Over the past two years, we have built a strong relationship with the CohnReznick team and have been deeply impressed by the company’s culture, vision, and the consistent growth they have achieved,” Ashish Karandikar, a partner at Apax Partners, said in a statement. “We are excited to partner with David and the firm’s leadership team to fuel the next phase of growth. Together, we aim to accelerate  service line expansion, explore new geographic opportunities, and drive innovation. We look forward to what we are confident will be a highly successful and rewarding partnership.” 

Apax was advised by Guggenheim Securities, LLC and CohnReznick was advised by William Blair &  Company, LLC. Koltin Consulting Group served as an additional financial advisor to both Apax and  CohnReznick.

“It was love at first sight,” Allan Koltin, CEO of Koltin Consulting Group, said in a statement. “I can’t recall two firms and their leaders culturally and strategically aligning as fast as they did. When one side talked, the other side finished the sentence. No question in my mind, this combination will produce one of the next $2 billion firms in the accounting profession, but more importantly produce a lot of successful people and clients along the way.”

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Accounting

IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Accounting

Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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Accounting

At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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