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Springline Advisory adds HM&M and Clark, Raymond

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Springline Advisory, backed by private equity firm Trinity Hunt Partners, has invested in two more accounting firms, HM&M Advisory, based in Dallas, and Clark, Raymond & Company in Redmond, Washington.

Trinity Hunt Partners, a Dallas-based PE firm, created Springline Advisory earlier this year in partnership with MarksNelson, a Kansas-based firm it invested in last year. In addition to MarksNelson, Springline later added BGBC Partners, an Indianapolis-based firm and made plans to expand by adding more firms around the country that serve middle-market clients. 

HM&M’s annual revenue is $21,970,805 and has approximately 110 employees. Clark, Raymond & Company earns between $8 million and $9 million in revenue and has nine people listed on its website. With these two partnership additions, Springline Advisory’s headcount will grow to roughly 250, and total partnership revenue with both firms will be north of $30 million.

Tim Brackney, CEO of Springline Advisory

Tim Brackney, CEO of Springline Advisory 

“We’re making investments in likeminded firms and evolving into a firm together,” said Springline Advisory CEO Tim Brackney.  “We’re looking for strong leadership and a growth trajectory with firms and teams that are looking for scale. They don’t need an investment, but recognize that to move faster and to provide more opportunity for their people, and to have more capability within their four walls, that it makes sense to join a group of firms that are evolving into one firm focused on the middle market.”

HM&M has been operating for more than 40 years and provides tax, assurance and accounting services. “This is a pivotal moment for HM&M,” said managing partner Susan Adams in a statement Wednesday. “This strategic combination will allow us to leverage the strengths of a larger firm while maintaining the personalized service and deep client relationships that have always defined us. This partnership will empower us to provide even more comprehensive and innovative solutions to our clients and more depth of opportunity for our people.”

Koltin Consulting Group CEO Allan Koltin advised HM&M and Springline Advisory on the deal. 

“Springline Advisory is becoming a major force in the accounting and advisory services space. HM&M was a firm that many other larger firms wanted to combine with,” Koltin said in a statement. “They are fortunate to have great leadership and a stable of young “next-gen” stars both at the partner and manager/associate level. HM&M has some significant expansion goals for the future and found Springline to be the perfect strategic, cultural, and capital partner to help them achieve those goals.”

Brackney said Springline wants to have a presence in most major geographies, and that includes the Seattle metropolitan area where Clark, Raymond & Co. is based. CRC offers advisory, assurance and tax services. For all the firms that Springline invests in that have assurance or attest businesses, such as HM&M and CRC, Springline sets up an alternative practice structure, as is common with private equity funding of accounting firms.

“We’ve provided personalized services to businesses, nonprofits and community members throughout the Northwest region for more than 25 years, and we’re looking forward to expanding our capabilities and co-creating an irresistible culture with Springline,” said Ed Clark, founding and co-managing partner of CRC, in a statement. “Joining Springline as a founding firm member allows us the opportunity and privilege to continue to create impact not only in our community but within the industry, too.”

When firms join Springline, their partners generally return some rollover equity in the combined firm. They initially retain their branding, but that evolves over time. “Some of that evolution will be bespoke, depending on the firm and the strength of their individual brand,” said Brackney. “Generally, the evolution will be a sort of side by side branding, where within the first three months it will say CRC has joined Springline, and then it will go to an endorsed brand, which would be CRC, a Springline company, and then eventually it will just be Springline.”

Redmond is the home of Microsoft and Seattle is the headquarters of Amazon. Springline will probably be inheriting many individual clients who are employees of the two companies, although CRC isn’t large enough to audit either of the tech giants.  

Brackney hopes to expand Springline further across the U.S. “We’re in active talks in in other parts of the country, the Northeast, Southeast, on the West Coast,” he said. “We kind of started in the center of the country, in the Midwest, and we’ve just made an investment here in the Southwest. We’ve thought of those generally as the regions where that’s what we’re focusing on from a geographic perspective. But our firm is not simply just trying to sort of aggregate different geographies together and different firms together. We’re also looking at depth and service line capability.”

The private equity funding will help finance those deals. “PE is one of the financial levers that we use to make those investments, but we’re really founding a firm and building a firm with PE as a financial partner,” said Brackney.

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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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