When a Grant Thornton or a Baker Tilly—the nation’s seventh- and tenth-largest accounting firms, respectively—sells a majority share to a private equity (PE) fund, it makes headlines.

But those big deals are only the most visible aspect of a phenomenon that’s rapidly changing the landscape of the public accounting profession. In the past three years, PE firms have claimed stakes in firms both large and small, and the trend shows no sign of slowing.

“The word has gotten out there that accounting firms are great investments,” prominent accounting consultant Allan Koltin told CFO Brew. Since August 2021, when EisnerAmper, the 18th largest firm in the US, struck a deal with TowerBrook Capital Partners, 12 accounting firms have accepted PE investments, Koltin Consulting Group research shows. (PwC also sold its global mobility tax and immigration services business to a PE firm). Now, PE investors have as much or more control over firms than partners do. It’s a shift that’s poised to change the way public accounting firms operate.

What’s more, the change is happening throughout the profession, to firms of varying sizes.

“You have midsized PE firms partnering with midsized accounting firms, and now you even have small PE firms partnering with small CPA firms,” according to Koltin, who’s worked on numerous PE deals, including the ones involving Baker Tilly and Citrin Cooperman.

Click here for more on how PE is changing accounting.—CV

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We know talking politics is risky, but we’re going to do it anyway, because it’s definitely on CFOs’ minds.

According to Grant Thornton’s Q3 CFO survey, which gathered responses from 238 CFOs between July 25 and Aug. 9, six in 10 said it’s “possible” the US presidential election will modify their business strategy.

What’s more, a majority said they’re already making investment decisions ahead of Nov. 5. Nearly a quarter (23%) said their organizations are scaling back or holding off on some investments until after the election, and 31% said they were increasing certain investments ahead of time.

And how exactly do CFOs expect the election will impact their businesses? As political consultant James Carville famously said, “It’s the economy, stupid!” Nearly half (45%) of respondents indicated “overall economy” was the biggest election-related factor that will impact the business environment. Roughly a quarter of respondents said the biggest factor was tax policy (23%), and 22% named regulatory policy. One in 10 said trade policy was the biggest factor.

Cool your jets. Grant Thornton’s Paul Melville, national managing principal of CFO advisory services, “cautioned against getting too caught up in election concerns” when making business decisions.

How are CFOs planning for the election? Click here to find out.—AZ

Soon, students may not need an extra year of college to attain CPA licensure. The AICPA and NASBA have proposed a “competency-based experience pathway” to licensure—with no post-bachelor’s coursework required.

Currently, students must complete 150 credit hours—30 more hours than the 120 needed for a bachelor’s degree—to be eligible for a CPA license. The “150-hour rule,” as it’s called, has been a requirement in all US states and territories since 2015.

Recently, the rule has come under fire. Critics argue that it poses an unnecessary barrier to entering the profession at a time when fewer students are earning bachelor’s degrees in accounting or sitting for the CPA exam. Students don’t want to incur the financial costs and additional time to earn the extra credits, they charge. Research has borne this out: An MIT Sloan study, for instance, found that the 150 hour rule reduced the numbers of new CPAs by 14%—and the number of minority candidates by 26%.

In the past few years, states have begun to challenge the rule. Minnesota legislators have proposed bills that would cut the number of credit hours necessary for a CPA license, while Ohio has an alternative pathway in place that allows licensure with 120 hours plus work experience and other requirements, the Wall Street Journal reported. South Carolina and New Jersey are exploring similar alternatives.

Click here to continue reading.—CV