New Paper Links Post-2020 Surge to Consolidation and Pricing Power.
By CPA Trendlines
A new study says private equity’s post-2020 rush into accounting is pushing up fees.
In “Financializing the Professions: The Rise of Private Equity in Accounting,” Inna Abramova of London Business School and John M. Barrios of Yale School of Management examine what happens when outside capital enters a profession historically organized around partner ownership and licensing rules. Using data from 1999 to 2024 that link “more than 3,600 PE transactions” to mergers and acquisitions, labor markets, and audit pricing, the authors report that private equity investment “increases sharply after 2020.”
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The paper lands amid a widening regulatory and standards-setting response. State boards of accountancy, NASBA, the AICPA and international ethics setters have been studying whether alternative practice structures and private equity investment create new independence risks or oversight gaps. The study adds market-level evidence — not a case study of a single deal, but measurable signals of consolidation and pricing power.
“The word has gotten out there that accounting firms are great investments,” consultant Allan Koltin says. Finance professor Sabrina Howell, who has studied private equity, describes it as “the tip of the spear driving consolidation” in a traditionally fragmented industry.
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