Can you imagine stepping into a time machine while also peeking into the future? Seems weird, right? But that’s exactly how it felt at the Accounting Today Private Equity Summit!
You see, there was an entire room full of traditional, boomer-aged white men in jackets and suits. It very much felt like an accounting conference from a decade ago. But there was a big forward-looking twist — discussion around PE investment in accounting firms. When money talks, out come the polished shoes and tailored blazers!
If you missed it, here’s what made this event a mix of nostalgia and fresh ideas:
Attendees at the 2024 PE Summit
Alan Klehr
One room, one crowd, big conversations
The setup was perfect for this topic. There were 300 people in one room, with no breakout sessions to split focus. Everyone had access to the same panels and fireside chats, which meant no FOMO (fear of missing out). And the networking breaks? A dream. Long enough to chat, mingle and snack on donuts or sip some wine.
The discussions were real. It wasn’t all sunshine and rainbows. The panels included firms that had taken PE money sharing their journeys. They talked about the wins, the hurdles and everything in between. And — surprise — not everyone thought PE was the “greatest thing ever.” However, most agreed it brought more positives than negatives.
Fresh cash for fresh ideas
One big takeaway was the opportunity for younger talent. PE introduces a way for high-potential employees to get a piece of the pie early. Forget waiting 15 years to become a partner. With PE, star players can reap financial rewards sooner, boosting retention and motivation.
And PE isn’t about partners cashing out. It’s about reinvesting in technology, hiring top talent and upgrading firm operations. That means firms can compete better, evolve faster and establish sustainable business models.
Busting myths about PE
Some people who walked into that room (and a number of you reading this) may think PE is all about greed. But is it really? Think about the partnership model in traditional firms — partners often pull profits without reinvesting in the business. PE firms, on the other hand, might tighten the ship financially, but they also bring in accountability and growth strategies.
And here’s a fun fact … many PE investors represent pension funds and other institutions. So, in a way, your grandma’s retirement fund might be backing your firm’s transformation. How’s that for perspective?
The big industry shift
PE isn’t for every firm. They are picky. They are looking for well-run businesses with solid growth potential. This raises the bar for everyone. If you’re competing with PE-backed firms, you’ll need to up your game. That means better metrics, stronger management and a more accountable culture.
It’s not just PE making waves. Venture capitalists, fintech and tech companies are entering the accounting space, too. They’re pushing innovation, automating processes and even taking on clients that CPAs traditionally served. The disruption is real!
The innovation dilemma
But where’s the innovation? Sure, PE brings money and management expertise, but that doesn’t necessarily translate to innovation. Technology is often mistaken for innovation, but they’re not the same. Adding automation to a broken business model doesn’t solve fundamental problems.
Firms need to rethink their DNA. Innovation should be baked into their operations, not treated as an afterthought. If PE firms don’t prioritize this, their investments could stall in the long term.
A vision for the future
The future of accounting isn’t just about taking PE money or implementing technology. It’s about reimagining how firms operate at scale. Add to that the opportunity for new players to build firms that embody cutting-edge business models, seamless tech integration and a culture of accountability and growth. Things are looking different!
Now, imagine stepping back into that time machine, but this time you leap ahead to a vibrant, dynamic profession where firms are powered by innovation, fueled by talent and focused on client value all while balancing profitability. That’s where the real transformation lies.
Private equity might be the spark, but the transformation ahead depends on how we as a profession embrace the challenge. Are we content to tweak the old model, or are we ready to design the future? With radical change, we could create a profession that’s not just profitable but also sustainable, innovative and, dare I say, enjoyable to work in.
Change is here, and it’s exciting. Let’s make it meaningful!
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 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.
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.
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.”