The traditional CPA firm partnership model is undergoing its most rapid transformation in decades. Driven by private equity (PE) investments and acquisitions, public accounting firms are restructuring operations, compensation and career pathways.
A new study, led by Portland State University accounting professor Elizabeth Dreike Almer, draws on extensive insights from regulators, practitioners and transaction experts to map out how PE ownership is altering the accounting landscape — and why higher education must bridge the growing gap between classroom instruction and workplace realities.
"Private equity isn't just changing who owns CPA firms; it's fundamentally reshaping accounting careers, firm culture, and the skills needed on day one," Almer said. "If business school classrooms don't adapt to these changes, new graduates will face severe reality shock when entering the workplace."
Interviews with industry leaders suggested that PE backing would significantly alter a firm's culture, firm choice and specialization, technical skills development and compensation. Concerns highlighted in the research included:
More layoffs, less time spent on engagements and fewer traditional equity partners
Reduced emphasis on auditing services in favor of more lucrative consulting work
A misunderstanding of the nuanced skills required for audit work and fewer opportunities for staff to develop skills and professional judgment
A decline in traditional partnership opportunities
To address these shifts, the study offers practical recommendations for accounting educators across teaching, curriculum and career advising. The authors suggest incorporating more experiential learning opportunities that would engage students with questions about professionalism, stewardship, public service obligations and the tensions that may arise when commercial priorities appear to conflict with the public-interest role of the profession.
The researchers say what is taught in classes should seamlessly blend technical accounting and auditing content with instruction about how firm structure, incentives and ownership affect the exercise of professional judgment.
Faculty and career advisors, the study says, ultimately need to help students weigh both the opportunities and trade-offs of these changing models so they can identify the type of firm that best aligns with their individual goals and preferences.
The findings are published in the journal Issues in Accounting Education. Co-authors include Lawrence Burke from Elon University; Denise Dickins from East Carolina University; and Julia Higgs from Florida Atlantic University.
