Portland State researchers urge accounting courses to address private equity

Portland State University publicized research on October 8 calling for accounting courses to address private equity ownership of accounting firms, in an announcement published on Phys.org. The researchers argue that students need to understand how ownership and commercial incentives can shape career opportunities and professional judgment alongside their technical training.

The study, led by accounting professor Elizabeth Dreike Almer, draws on insights from regulators, practitioners and transaction experts, including interviews with industry leaders, according to the university. It examines changes to operations, compensation and career pathways associated with private equity investment and acquisitions in CPA firms.

The university identifies the paper as The Impact of Private Equity Investments in Accounting Firms on Accounting Careers, published in Issues in Accounting Education. Its October 8 announcement presents recommendations for teaching and career advising; it does not report that universities have introduced those changes.

What private equity could mean for accounting careers

“If business school classrooms don't adapt to these changes, new graduates will face severe reality shock when entering the workplace,” Almer said. That warning is a prediction about graduate preparedness, rather than a measurement of graduates' experiences or evidence that a particular teaching approach improves their performance.

The researchers also highlighted concerns about a reduced emphasis on auditing in favor of more lucrative consulting work. They described the risk that the nuanced skills required for audits could be misunderstood, leaving staff with fewer opportunities to develop technical competence and professional judgment. These are reported concerns, not findings of misconduct at an identified firm.

How researchers want accounting teaching to change

The authors recommend more experiential learning focused on professionalism, stewardship and public-service obligations. Students would examine tensions that can arise when commercial priorities conflict with the profession's public-interest responsibilities. The proposed approach connects ownership questions directly to the decisions accountants face in their work.

Technical accounting and auditing instruction would be combined with teaching about organizational structure, incentives and ownership. Faculty and career advisers would also help students assess opportunities and trade-offs across firm models, including whether a firm's career pathways fit their goals. The announcement gives no implementation timetable or evaluation of the recommendations' effectiveness.

IFAC identifies audit risks and possible benefits

Separate analysis by the International Federation of Accountants provides context for those concerns. IFAC says most private equity investment in accountancy services does not involve firms providing audit or assurance services. Its review of public information identified nearly 100 firms auditing public-interest entities or exchange-traded companies, representing less than 10% of the investment activity it tracked.

Those figures are dated June 30, 2026. IFAC counted direct investment in 46 firms auditing public-interest entities, with another 52 such audit firms acquired or incorporated into the surviving firms. The figures describe its tracked activity at that point, rather than an October census of the profession.

IFAC identifies potential risks from demanding profit targets, pressure on staffing and engagement hours, and inconsistent cultures or quality controls when firms consolidate. Its analysis describes ways commercial incentives could undermine audit quality; it does not establish that private equity ownership necessarily causes audit failures.

It also identifies potential benefits. Investors have reasons to protect a firm's reputation and audit quality as they seek to increase its value. Appropriately structured administrative-services agreements can protect audit partners' access to staffing and resources and limit inappropriate influence over engagement budgets and staff compensation, IFAC says.

Earlier regulatory context and unanswered questions

In a May 1, 2025 speech, Public Company Accounting Oversight Board member George R. Botic said approximately 40% of the largest 30 accounting firms had received private equity investment, by his count. That historical estimate is not a current market-share figure. He identified succession planning, access to talent and investment in technology, including artificial intelligence, as challenges facing firms.

Botic emphasized leadership's responsibility for audit quality and ethical behavior while firms invest in people and technology. He said his remarks reflected his own views, not necessarily those of the board or staff. Neither those earlier remarks nor IFAC's analysis constitutes a response to Almer's study.

The university's announcement leaves important methodological questions unanswered, including the interview sample size, participant selection and interview dates. It does not establish causal effects on layoffs, compensation, audit quality or graduate preparedness. Its immediate contribution is a set of education recommendations grounded in industry interviews, with their impact on learning and workplace performance still unestablished.