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The rules are changing for accounting firm M&A

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1 year ago

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Bob Lewis and Doug Lewis at 2025 Evolve

Bob Lewis (right) and Doug Lewis (left) of The Visionary Group at Evolve

If you don’t like the merger & acquisition landscape in accounting, wait a little while — it will change.

“It’s constantly changing, constantly evolving,” Doug Lewis, a managing director at M&A advisors The Visionary Group, told attendees of a session at the BDO Alliance’s 2025 Evolve Conference, being held in Las Vegas this week. “In just a couple of weeks there could be an entirely new option.”

From the multiple flavors of private equity deal and traditional M&A deals, to employee stock ownership plans and even initial public offerings, accounting firms have never had so many options to choose from — but that means firms have to make hugely consequential choices at a time when the rules are in constant flux.

“There are a lot of things happening out there in the marketplace — it’s not just PE,” he said, noting that of 22 deals his company worked on over the past year, nine involved PE, but 13 were more traditional accounting firm mergers. “There’s no one right path for a firm.”

While PE isn’t right for every firm, it has had an enormous impact on the market, driving up prices and creating inflated expectations, changing deal structures, accelerating the pace of deal-making, and much more, more or less completely upending the traditional world of accounting firm M&A.

With all that in mind Doug Lewis and Bob Lewis, the founder of The Visionary Group, shared a number of rules for success in accounting M&A — for both buyers and sellers.

Rules for the target market

The first step for every potential acquire is to decide if they want to be acquired. Many don’t – but that’s a choice that should be made after careful deliberation.

“If you do want to remain independent, stress-test your succession plan — and if you don’t have one, that’s where you need to start,” explained Bob Lewis.

Remaining independent is perfectly possible, but comes with its own struggles; firms that decide that a deal is a better bet for them should keep the following rules in mind:

1.  Manage your expectations. Stories of private equity firms paying exorbitant amounts of money have filled accounting firm partners’ heads with unrealistic ideas.

“Stop listening to the multiples from other deals,” said Bob Lewis. “It’s unique to each deal. Everyone says, ‘I want a multiple of 10 or 12 because I heard someone else got one.’ The only multiple you know for sure is CBIZ [because it’s a publicly traded stock]. The rest is all scuttlebutt from the rumor mill.”

The final multiple in any deal will involve so many different factors that no other firm’s multiple can be a useful guide.

2. Look for your hidden value. Acquiring firms are often looking for opportunities to quickly grow an acquired practice, so that what at first might seem deficiencies can actually be attractive.

“If you’re exploring selling or merging, knowing the hidden value of your firm is valuable,” said Doug Lewis, before laying out a number of these, including a lack of advisory services or a wealth management practice; having weak client pricing; not taking advantage of outsourcing; or coming from a less expensive area with lower-cost professionals.

3. Stick to the facts. The financial and operational data firms share should be accurate and honest. “Some firms try to get very creative with what their true value really is, only to find out that these large acquirers are really good at math,” said Doug Lewis. “More often than not, the BS will get sniffed out.”

4. Pay attention to the right stats. “Revenue per head is the benchmarking metric that most acquirers are looking at,” explained Doug Lewis. “$200,000 is a healthy level; we’ve seen as high as $500,000, but $200,000 and above and you’re doing OK.”

Other valuable metrics include revenue per equity partner, and realized dollar per hour.

5.  Clean up your act. Both Lewises agreed that these characteristics would make firms less attractive as an acquisition target: a high volume of 1040s; high billable hours at the partner level; an unintegrated firm with an eat-what-you-kill approach; a lack of standardized processes; lots of very small clients; and not tracking hours. (The last item isn’t about billing, Bob Lewis said; it’s about not knowing how your firm operates.)

New rules for acquirers, too

It isn’t just PE firms that are going out to make deals; more and more accounting firms are adding M&A to their growth strategies. But they may find themselves losing out to their many competitors if they don’t pay attention to the following rules:

1. Move faster. Traditional accounting firm deals used to be able to unfold at a stately pace, but no longer. “Time kills all deals,” Doug Lewis warned. “There are some really bad acquirers out there who will drag a deal on for two, three or four years. There are phenomenal acquires who can do it in just a few months. The lack of speed kills deals.”

“If it takes you three months to get back to a target, what message do you think that sends to them?” asked Bob Lewis.

2. Bring cash. Private equity has accustomed firms to the idea that they’ll get cash right away — something that didn’t used to happen in traditional firm M&A, but is increasingly common now. “We’ve seen the cash component skyrocket in just the last three to six months,” said Doug Lewis. “We’re seeing much more cash in the deal. It’s rare to see less than 30% of cash, and we’re seeing as much as 50-60%.”

3. Don’t try to unbundle a firm. Telling a target firm that you’re only interested in one part of their practice won’t work. “You’ve got to buy the whole thing,” said Bob Lewis. “You can’t go in and try to buy 60% and leave them with the worst clients.”

(Listen: “The new deal: The evolving landscape of M&A and PE.“)

4. Don’t start by being picky. With cultural and personal fit being so important, heavy scrutiny of the books can wait a bit. “Ripping apart the numbers of a firm before you even start to put a deal together is often the kiss of death,” said Doug Lewis, who added a story about a $20 million deal that was derailed in its second meeting when the would-be acquirer came in asking questions about a $6,000 discrepancy in the target’s financials.

5. Have a process. A surprising number of firms take a more or less ad hoc to M&A. “You have to run a process if you’re going to be competitive in this marketplace,” said Doug Lewis. “So many firms have pushed these down to people who’ve never done a deal in their lives.”

6. Have a single go-to guy. Like many things, M&A deals shouldn’t be run by committees. “Have one leader run point on all the meetings,” said Bob Lewis. “We’ve had calls with seven partners on the call, and they’ll start asking questions. And your lead needs M&A experience or some coaching.”

(Read more from Evolve: “Accounting’s challenge: Making it out of the canyon.”)

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Accounting

AI-Driven Automation and Continuous Accounting Frameworks

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4 hours ago

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August 15, 2026

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The accounting profession is undergoing a fundamental structural transition as enterprise finance departments shift from periodic month-end closes toward automated continuous accounting models. By integrating specialized machine learning algorithms directly into enterprise resource planning (ERP) platforms, chief accounting officers are transforming financial reporting from a retrospective exercise into a real-time operational asset.

The Shift from Periodic Close to Continuous Financial Reporting
Traditional accounting workflows heavily relied on manual data reconciliation, spreadsheet calculations, and multi-week closing cycles at the end of each fiscal period. In contrast, continuous accounting frameworks utilize automated software agents to process, validate, and post transactional data in real time as business activities occur.

Automated bank reconciliation tools cross-reference incoming bank feeds, invoice records, and purchase orders automatically. By resolving transactional variances instantly throughout the month, corporate accounting teams eliminate the traditional workload spikes associated with quarterly and annual closes.

Machine Learning in Audit Trails and Anomaly Detection
Advanced natural language processing (NLP) and machine learning tools are redefining internal audit and financial control environments. Automated systems analyze 100% of general ledger entries, identifying anomalous transactions, duplicate payments, and unauthorized journal entries in real time.

Rather than relying on random statistical sampling, corporate internal auditors can focus their attention on high-risk flags automatically surfaced by algorithmic monitoring platforms. This continuous risk assessment strengthens internal controls over financial reporting (ICFR) and significantly reduces fraud risk.

Evolving Roles for Accounting Professionals
As routine data entry and manual reconciliation tasks become fully automated, the skill set required for accounting professionals is shifting toward data analysis, system design, and strategic business advisory.
– Systems Governance: Accountants are increasingly responsible for monitoring algorithmic accuracy and managing data integration pipelines.
– Business Partnership: Finance professionals leverage real-time financial dashboards to advise operational leaders on margin management and working capital allocation.
– Regulatory Compliance Management: Accounting teams utilize automated platforms to ensure compliance with dynamic tax codes and international accounting standards.

Core Implementation Recommendations
1. Deploy Automated Reconciliation Tools: Integrate continuous transaction processing modules into existing enterprise ERP architectures.
2. Establish Algorithmic Governance Controls: Implement strict internal testing protocols to ensure automated accounting rules comply with GAAP/IFRS standards.
3. Reskill Accounting Teams: Invest in training finance staff on data analytics, workflow automation, and predictive financial modeling.

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Accounting

Global ESG Reporting Standards and Double Materiality Compliance

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6 days ago

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August 9, 2026

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Corporate accounting departments face expanding reporting expectations as international sustainability disclosure standards achieve regulatory enforcement across major global jurisdictions. Chief Accounting Officers (CAOs) and corporate controllers are establishing rigorous internal accounting controls to treat Environmental, Social, and Governance (ESG) metrics with the same data precision, auditability, and governance as traditional financial statements.

Regulatory Harmonization Under Global Sustainability Frameworks
The implementation of standardized sustainability reporting frameworks—notably rules established by international sustainability accounting boards—has created unified expectations for public and large private enterprises. Corporations must report standardized metrics covering greenhouse gas emissions (Scope 1, 2, and material Scope 3), energy utilization, workforce demographics, and supply chain governance.

In Europe and other participating international jurisdictions, double materiality principles are mandatory. Under double materiality, organizations must report both how external sustainability risks impact corporate financial performance, and how internal corporate operations affect surrounding environmental and social structures.

Integrating Sustainability Metrics into Core ERP Systems
To provide auditable non-financial data, enterprise organizations are integrating specialized carbon accounting and ESG management platforms directly into core ERP systems. Automated data collectors capture energy utility invoices, logistics fuel consumption metrics, and vendor compliance records in real time.

Establishing automated, traceable data pipelines ensures that non-financial reporting is supported by clear audit trails. This structured approach allows external financial auditors to provide reasonable assurance on sustainability disclosures during annual corporate reporting cycles.

Financial Impacts and Capital Market Disclosure
Accurate ESG reporting directly influences corporate cost of capital and institutional credit ratings. Commercial lenders and institutional asset managers systematically incorporate sustainability metrics into risk pricing models. Companies that demonstrate transparent, verifiable progress in operational energy efficiency and climate risk mitigation benefit from expanded access to green bond markets and lower debt pricing.

Action Steps for Accounting Leadership
1. Implement Double Materiality Frameworks: Conduct comprehensive assessments to identify material financial and operational sustainability metrics.
2. Build Auditable Non-Financial Data Pipelines: Automate ESG data collection within core accounting software to ensure data integrity.
3. Align Sustainability with Annual Financial Filings: Prepare non-financial disclosures concurrently with financial statements to satisfy regulatory audit expectations.

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Accounting

Modernizing Internal Controls: Machine Learning and Continuous Monitoring in Auditing

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1 week ago

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August 5, 2026

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Internal audit departments and corporate risk managers are modernizing internal control frameworks by shifting from periodic sampling techniques to continuous monitoring and machine learning analytics. As operational data volumes increase across enterprise organizations, automated control testing ensures financial integrity, prevents corporate fraud, and streamlines annual audit engagements.

The Limitation of Periodic Audit Sampling
Historically, internal and external auditors evaluated internal controls by reviewing random samples of financial transactions—often analyzing less than five percent of total ledger entries. In complex enterprise environments, periodic sampling methods carry inherent risks of overlooking localized financial misstatements, unauthorized disbursements, or operational control breakdowns.

In 2026, progressive internal audit functions are utilizing automated continuous monitoring platforms that evaluate one hundred percent of financial transactions in real time. Continuous control auditing systems continuously monitor general ledger entries, procurement approvals, and expense reimbursements across all operating subsidiaries.

AI-Powered Fraud Detection and Anomaly Identification
Machine learning models trained on historical corporate financial data excel at identifying subtle transactional anomalies that indicate potential fraud or operational error. Automated systems instantly flag duplicate invoice payments, unapproved vendor creation, unusual journal entry timing, and unauthorized override of authority thresholds.

When an anomaly is detected, the automated auditing platform generates an instant risk alert, allowing internal audit teams to investigate root causes immediately. Early detection prevents minor operational errors from escalating into material weaknesses in financial reporting.

Streamlining External Audit Preparation
Continuous internal control monitoring delivers significant benefits during annual external financial audits. External audit firms can review continuous audit logs and automated control testing documentation, reducing the time required for manual field testing.

This integrated approach lowers overall audit compliance fees, reduces administrative burdens on corporate accounting staff, and provides senior management and audit committees with real-time visibility into the organization’s overall risk profile.

Core Implementation Guidelines
1. Transition to 100% Data Testing: Replace legacy sampling methods with automated continuous audit monitoring systems.
2. Deploy Anomaly Detection Algorithms: Implement machine learning models to identify unauthorized transactions and operational control overrides.
3. Align Internal and External Audit Workflows: Coordinate continuous control testing protocols with external auditors to optimize annual compliance cycles.

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