Bennett Thrasher, a Top 75 Firm based in Atlanta, has steered clear of private equity funding so far and plans to remain independent, despite frequent calls and emails from PE suitors.

“Our firm has been doing quite well,” said Bennett Thrasher managing partner and CEO Jeff Call. “We grew double digits in total revenue last year, about 11% total. Our challenges on the personnel side have not been as much of a problem for us. We’ve been able to attract a lot of good talent, so we don’t feel like we’re really constrained in that way. We have been able to get the capacity that we need.”

He has taken note of the growing influx of private equity investment in the accounting sector in recent years, but so far he’s rejected such advances.

“I do get a lot of phone calls,” he said. “We’ve told them that we’re fiercely independent, and we don’t intend to take outside capital at this point. We feel comfortable that with the capital of our inside partners, we’re able to make the investments we need to, and we think that’s in the best interest of our people. Our overall mindset is around ‘people first,’ and we have concerns that private equity might make it very difficult to retain the substantial culture that we think we’re building here. At this point we’ve said we’re not interested in exploring private equity, even though I do get a lot of phone calls and emails. It seems like several a week.”

He sees competitive advantages in remaining independent, and the firm has attracted clients and employees who feel the same way. 

“There are clients as well as some key people that we’ve actually attracted,” said Call. “A couple people were at companies that took private equity money, and they were somewhat disenfranchised as to what they thought that private equity backing did to their culture. That has allowed us to attract some high-quality partners and below partner-level people that otherwise may not have been in the market if their firms had not taken that private equity. So far, it’s been positive for us, and we continue to see opportunities in the marketplace by remaining independent.”

Some of those hires had firsthand experience of the downside of private equity investment. “We’ve had a couple people that joined us laterally, senior-level people that were at a private equity-backed firm, and they just felt like it was changing the way they did business and diluting the culture,” said Call. “So they were attracted to our firm that did not have private equity and had more of a ‘people first’ mindset and wasn’t so focused on what external capital could do.”

At least one firm, Citrin Cooperman, has already experienced a handover from one private equity backer to another, from New Mountain Capital to Blackstone, in a period of less than three years.

“From a financial perspective, it could be lucrative, but our view is that there are many cons, and the tradeoffs are probably not worth the potential extra liquidity that might be available to partners,” said Call. “We believe that having a legacy firm and remaining independent and the entrepreneurial spirit that we have is probably more powerful than the external capital would be.” 

Some clients also prefer to use a firm that isn’t associated with the private equity industry.

“We have seen that a little bit, where some of the clients want to deal with a company that’s kind of independently owned by the partners, versus private equity,” said Call. “There’s probably a slight bit of distrust toward private equity, that they’re going to be pushing hard to increase the economics, raise fees and other things like that, because they’re on the fast track to try and exit the business again in four to six years. We’ve seen clients that were working in a private equity-backed firm and came to us because pretty early on in the relationship the private equity group went and increased the fees across the board to maybe higher than average levels they may have seen from other independent firms, and so it has created an opportunity for us to pick up some high-quality clients that might have been disenfranchised with substantial fee increases being put to them. Or in some cases, we’ve seen maybe the private equity group came in, and one of the first things they did was cut some personnel costs, and then they’ve seen some client service issues as well.”

His firm emphasizes its priority is client service. “That’s something that we really pride ourselves on,” said Call. “It’s just delivering very high quality, consistent, five-star client services to our clients every day in, day out. We think that’s one of our pure calling cards that really differentiates us. I think some of the private equity-backed firms, when they’re trying to run fast to grow revenue and cut costs to get the highest profit, sometimes client service may fall by the wayside. So we have seen some opportunities to pick up some high-quality clients that maybe otherwise wouldn’t have come to a firm of our size, but they got put off by some of the things that were occurring with the private equity-backed firms.” 

Tariff advice

Bennett Thrasher has been seeing increasing demand from clients for advice on tariffs since President Trump took office.

“Tariffs are a huge issue,” said Call. “We’re doing a lot of work. We have a couple of our partners that are very heavily involved in that, from the international tax side and transfer pricing. We’re taking a multipronged approach to tariffs. Part of it is educating our client base on low-cost, potentially higher-value solutions, which would be helping them to revisit the Harmonized Tariff Schedule classification of different goods that they have, making sure that the classifications of the goods that they have is appropriate so they’re not paying any unnecessary tariffs. Then we’re also looking at reviewing product specifications to determine if there is any unbundling of products. Can we separate services from royalty fees from licensing fees for the product itself that might be able to lower customs values?”

Bennett Thrasher has helped its clients with reviewing the transactions within their supply chain to ensure they have the appropriate exposure of the origin of certain products and to see whether exemptions are available or they’re appropriately using the correct value. 

“There’s kind of a ‘first sale rule’ that’s in play that allows you to perhaps get some exemptions there as well,” said Call. “We’re also looking at whether substantial transformation to change the origin of products thereby frees up liquidity, not only upon entry, but also elsewhere within their supply chain structure. And then we’re also having conversations around the potential use of free trade zones, duty drawback strategies, and detailed description and classification of products, whether a certain percentage of the products made in the USA or USMCA [United States-Mexico-Canada Agreement] countries would lower tariff burdens. We’re also looking at other potential solutions, including contract negotiations, segregation of the supply chain intended for U.S. distribution versus foreign distribution, and general pricing strategy. It’s pretty comprehensive.”

The ever-changing tariff policies coming out of the White House have made planning more complicated.

“We have the original tariff structure, which was going to be in place by April 2, and then we had some delays and 90-day pauses on some of that,” said Call. “It does make it difficult to advise based on what the current law is, if the current law continues to shift. We’re just trying to help clients look at all the different options they have. Maybe make some temporary planning solutions until we know what the permanent tariffs may be, but try to create as much flexibility in the structure as possible so they don’t make any major shifts that would take a lot of money to unwind if the tariff structures change going forward. It’s challenging. I think that’s probably what the frustration for clients is. If they just knew what the rules were, and those are going to be the permanent rules, you can make permanent decisions, but if you don’t know if they’re permanent or if they’re temporary, it does make it a little bit more difficult to plan. And we have seen clients saying I’m not going to make any major decisions on any of this stuff until I know what the rules at play are, so that makes it more challenging.”

The firm’s international tax partner and transfer pricing partner are spending a great deal of time advising clients about tariff issues. “Probably about 25% of our client base has some international operations or international structures as part of their corporate structure,” said Call. “It definitely is a big topic of conversation for us. Even though we’re not a Big Four firm, we do represent large companies that have multinational operations, so it is a very critical element to be as proactive as possible.”

Tax reconciliation bill

The massive tax reconciliation bill currently making its way through Congress has also been prompting calls for advice.

“That’s another big topic of conversation,” said Call. “I think if you had asked a lot of people, they may have already thought we’d have a tax bill by now. I don’t know if the tariffs became the more important topic to get out in front of, but certainly the tax bill and whether or not they’re going to get something through, if it’s going to be near just an extension of the 2017 bill, or if it’s going to have any substantial additional [provisions].”

One of the ideas that was under consideration recently was a tax on millionaires, but that appears to be off the table for now.

“That’s the problem whenever you have a big tax bill: Somebody wants to throw some other little candy in there for constituents to say that they got a win,” said Call. “Sometimes that slows things down from getting done when you have those types of additional elements.”

It isn’t even clear whether the legislation can be passed as “one big, beautiful bill,” as Trump has referred to it, or in separate pieces.

“It will be interesting to see how that plays out, but definitely for a lot of our clients, if they don’t extend the bill, especially business owners, they can have some decent sized tax increases, so it’s definitely something that we’re trying to keep an eye on for them,” said Call. “Unfortunately, there’s not a ton you can do right now until we know the rules at play. But certainly, we’re trying to advise our clients the best we can based on what we expect to occur. But I think most people believe there probably will be some extension. Maybe it won’t look exactly the same, but it probably is going to have a lot of elements.”

Training and technology

Bennett Thrasher focuses on clients in sectors such as construction, technology, hospitality and investment funds among its fastest-growing practices and segments. 

“We have a pretty good focus on industry segmentation within the firm, so we have different practice leaders that are very focused and specialized in their industry,” said Call. “They’re very connected in those industries, knowing all the key issues for those companies. Being able to have a specialized team that really understands your business and your industry very closely is a competitive differentiator for us that allows us to attract some really high-quality clients in some of those industries that we have greater specialization in.”

To train its employees, Bennett Thrasher exposes them to various aspects of the business.

“Each of our employees has a pretty decent sized budget for their continuing education,” said Call. “We’re in two different accounting associations, so through those, we have access to different training academies. There’s a tax training academy for several days that all of our different tax personnel can go to, and our firm is actually one of the leaders in that area, helping our partners do those trainings for ourselves and other firms as well. We also had a pretty big investment in training around all the different services we can offer to clients, helping all of our people become more aware. We have about 25 different specialty services that we offer to clients, so making sure that all of our personnel from across the firm are aware of all those different services. We call it our Tour of Services Day. Going around and getting that seven- to 10-minute snapshot of each of the different practice areas from their different specialty practice leaders is very helpful in giving our people that exposure, so they know that if you have this type of client or this type of situation, here’s how else we can help them. Besides that traditional audit or tax, here’s the specialty services we can provide to them.”

The firm is also training its people on technology such as artificial intelligence. “We’re using Microsoft Copilot tools, and spending more money and training there for our people to get exposure to that, and how some of the AI tools that we’ve also made investments in for different specialty practices practices that are allowing them to do their jobs more efficiently, maybe take out some of the mundane tasks of their job,” said Call. “Automation or AI tools help with those elements so they can spend more of their time focused on being true trusted advisors and advisory oriented for our clients.”

Call has no immediate plans for further mergers or acquisitions for the firm, but he’s open to the possibility. “We do have offices in Dallas and Denver,” said Call. “Dallas started in 2022 and Denver started in 2023. Those are both pretty fast-growing areas. We did do a small tuck-in merger in the Denver market in late 2023 and that’s gone very well for us. We are open and looking for opportunities to continue to grow those offices at a faster rate.”

Last year the firm added two audit partners in Denver and Dallas, he noted. “We are looking for opportunities to add either lateral partners or potentially even a small-scale acquisition in either of those markets if it’s a good fit culturally,” said Call. “We always say culture trumps growth. We still want to make sure it’s a cultural fit first. But if it’s a good cultural fit and it lines up well with the rest of our practices, then yes, we are definitely open, and that is part of our 2030 strategy, to grow those offices to much more substantial levels. We think both those offices can be probably two to four times the size they are today over the next five years.”

At first glance, accounting judgments may appropriately be viewed as routine accounting practices done in the normal course of business: estimates required due to business uncertainty, and assumptions necessary to complete financial reporting obligations. But when such judgments are overly optimistic, unsupported or poorly documented, they can tip into the territory of accounting errors or fraud, leading to restatements, public scrutiny and even regulatory enforcement. And in the current U.S. enforcement climate, the stakes remain as high as ever.

While the Securities and Exchange Commission has, under the new administration, indicated publicly that it may reduce its enforcement focus in areas of ESG and crypto disclosures, its scrutiny of accounting and auditing practices will remain robust. In 2024 alone, the SEC brought more than 45 enforcement actions involving financial misreporting. This pattern suggests that, even amid a broader shift toward deregulation, financial reporting integrity is still very much in the crosshairs, primarily due to concerns that inaccurate financial reporting erodes investor confidence and the market as a whole.

Given the significance of accounting estimates in financial reporting, it’s no surprise that many enforcement actions cite a registrant’s failure to appropriately consider all relevant facts and circumstances that could materially impact key assumptions that form the basis of accounting estimates, or intentionally ignore them. A prime example: In late 2024, United Parcel Service was fined $45 million by the SEC for materially misrepresenting its earnings. The company relied on an external valuation of one of its business units but withheld key information from the consultant. As a result, the unit was grossly overvalued, and UPS avoided recording a goodwill impairment. This case illustrates how selective disclosure, even without overt intent to deceive, can result in significant enforcement and reputational damage.

The judgment-fraud continuum

Management accounting judgments are not inherently problematic — after all, no standard can prescribe treatment for every unique transaction. But it’s when those judgments lack a sound basis, are inconsistently applied from one reporting period to the next, ignore contradictory evidence, or aren’t clearly documented that problems arise.

Case in point 1: Percentage of completion accounting

Consider revenue recognition in long-term contracts, a recurring hotspot in SEC enforcement. U.S. GAAP and IFRS both permit revenue to be recognized based on progress toward completion. This requires assumptions about future costs, contract modifications and the likelihood of contingent income. These assumptions should be reasonable and evidence-based — but our investigations often reveal overly optimistic revenue forecasts or misreporting of costs that can artificially boost profits.

A recent example relates to the AI-enabled robotic company Symbotic Inc., which reported errors related to its revenue recognition practices in 2024 due to material weaknesses in its internal controls that prematurely recognized expenses related to goods and services it was providing to customers under milestone achievements. In addition, the company failed to recognize cost overruns that could not be recovered and should have therefore been written off. Due to Symbotic recognizing revenue under a percentage of completion basis, the recognition of expenses prior to the satisfaction of key milestones resulted in the early recognition of revenue. Symbotic was sued for securities fraud in a class-action lawsuit, following a more than 35% decline in its share price and has announced an ongoing investigation by the SEC. 

This issue also crosses industries and geographies. U.K. oilfield services and engineering company Wood Group plc experienced an over 68% decrease in its share price since it announced in November 2024 that it had identified “inappropriate management pressure and override to maintain previously reported positions” leading to information being withheld from internal auditors. Reports have suggested the company engaged in over-optimistic accounting judgment and a lack of evidence to support assumptions made and positions taken.

Case in point 2: Straightforward accounting estimates

While fraud may be easier to conceal in complex areas of accounting, it can also manifest itself in more straightforward recurring practices. At the end of each reporting period, companies are required to estimate and record accruals for expenses that have been incurred but for which an invoice has not yet been received. Macy’s reported that a single employee had made unsupported or unjustified adjustments to the retailer’s accrual entries to conceal $151 million of small-package delivery expenses over a two-year period from Q4 2022 through Q3 2024. While the SEC has not announced a formal investigation, a securities class action was filed against the company, and the company announced it had initiated a $600,000-plus clawback in executive bonuses.

A company’s response: Getting ahead of the risk

The key takeaway? Judgment-related risks aren’t going away — and neither is regulatory scrutiny. U.S. enforcement bodies may be shifting their focus, but accounting misstatements remain a primary concern. And with the SEC’s emphasis on financial transparency and accurate reporting, businesses can no longer afford to treat accounting judgments as mere technicalities.

Key areas that a company can consider to address the risk of inaccurate or unsupported accounting estimates include:

• Identify those accounting estimates that are most significant to the business from both a qualitative and quantitative perspective: what estimates and key assumptions have a) the most significant impact on reported results, and/or b) have the greatest element of uncertainty and, therefore, highest probability of being incorrect.
• Understand the methodology for developing accounting estimates including the availability and reliability of data sources, how such sources are generated, whether there have been adjustments to how the data is compiled from period to period, and whether there are alternative or supplementary sources that can better inform the facts.
• Stress-test the estimates by assessing the impact of applying alternative assumptions or weightings of information sources. Similarly, conduct regular retrospective testing of historical assumptions relative to actual results to identify how accurate prior estimates were, what factors or assumptions contributed to the accuracy and inaccuracy of prior estimates, and identify amendments and modifications to future estimation processes.
• Ensure all significant judgments are clearly documented and evidence-based. Regulators and litigation plaintiffs use hindsight to “re-audit” or “recreate” accounting estimates so it’s critical that companies document a complete account of the information available to them at the time, and the assumptions, thoughts and alternatives that were considered when generating accounting estimates. Estimates project future events and will inevitably be incorrect. However, a well documented record that demonstrates the company made a balanced, thorough and good-faith approach to developing its estimates provides a strong mechanism to defend against any scrutiny that may be levied in the future.
• Ensure that estimates, the processes followed and assumptions made are done in a clear and transparent manner with the company being open to the thoughts, ideas and comments from others within the business, including those outside the accounting function.

Ultimately, sound accounting judgment is not just a matter of technical compliance — it’s central to maintaining stakeholder trust and avoiding costly regulatory action.

House Republicans have added a plan to raise billions of dollars to help pay for President Donald Trump’s massive tax cuts through the sale of thousands of acres of federal land — a politically charged idea that has drawn opposition from some in their own party. 

The plan, a late-night addition to a legislative package approved early Wednesday by the House Natural Resources Committee, mandates the sale of dozens of parcels totaling more than 11,000 acres (4,450 hectares) of federal land in Utah and Nevada.  

In all, the committee’s legislative package would raise more than $18 billion through increasing federal oil, gas and coal lease sales as well as timber sales and other means. House Republicans are aiming for $2 trillion in spending reductions paired with $4.5 trillion in reduced revenue from tax cuts.