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NASBA task force tells Washington board private equity in CPA firms raises oversight, independence questions
Summary
NASBA Private Equity Task Force presenters told the Washington State Board of Accountancy that private equity (PE) investment—estimated at $40 billion—has led to APS firm structures that may challenge existing independence rules and state boards' oversight tools; NASBA extended its white paper comment period to Feb. 28, 2026.
The Washington State Board of Accountancy heard a presentation from the NASBA Private Equity (PE) Task Force on potential effects of PE ownership in accounting firms and questions it poses for state oversight. Presenters Dale G. Mullen, Esq., and Dan Vuckovich, CPA, told the Board that an estimated $40 billion of PE capital has flowed into CPA firms and that more than 50 firms are operating under alternate practice structures (APS) with PE involvement.
The task force described a common APS model that separates attest/audit work from a non-attest side that performs tax, consulting and administrative services. Presenters said this split raises concerns about independence in fact and appearance because the attest side can be operationally reliant on the non-attest side. They also noted that PE investors may influence firm strategy, staffing and client selection—factors that could put pressure on audit judgments. The task force advised the Board that current independence rules were drafted for traditional partnerships and may not fully account for APS arrangements.
Presenters highlighted disclosure and transparency issues, saying the public may not understand who controls PE-backed firms and that PE ownership introduces non-CPA investors into firm governance. They noted a controversial practice in some firms of restricting CPA title use on the non-attest side. NASBA has scheduled a webinar on Feb. 4, 2026, on the exposure draft and extended the white paper response period to Feb. 28, 2026; the task force encouraged the Board and members to review and submit comments.
