Ownership Models move into the Spotlight – A Blog
We examine the latest industry developments, regulatory activity and emerging resources
In spite of, or perhaps because of, the challenges facing the accountancy profession, firm ownership models and alternative practice structures are evolving with greater speed and sophistication than ever before.
This evolution is attracting increasing attention not from a single authority, but from a wide range of global regulatory and standard-setting bodies. Organisations including IFAC, IESBA, IOSCO, IFIAR, regional bodies and national institutes are all engaging with the topic through discussion papers, consultations and practical resources. While the themes are often similar, they are not yet fully aligned, and firms should be cautious about assuming consistency across jurisdictions.
Boardroom conversations that once centred on partnership, responsibility and long-term client relationships are now increasingly shaped by terms such as platforms, scale, exit horizons and capital structures.
For some firms, these conversations are already translating into decisions around private equity. For others, they are emerging more indirectly through growing pressure on talent models, competitiveness and client expectations.
When questioned as to whether our member firms would consider outside investment, Praxity’s latest ClearlyRated independent survey, 44% of them confirmed they would not consider private equity and a further 28% who would consider it but not actively looking.
Whatever form these discussions take, external investment in accountancy firms is now firmly part of the landscape. Over the past decade, and particularly since 2022, this shift has accelerated, reshaping how firms are owned, governed and grown. Even firms that have chosen to remain independent are feeling the knock-on effects.
As a result, regulatory and professional bodies are not issuing a single set of answers, but rather a growing body of communications, consultations and resources designed to help firms navigate this change. Their collective message is measured rather than prescriptive: while capital can unlock opportunity, it also introduces new complexities that must be understood, governed and demonstrated.
A market in motion, not yet in consensus
Across the profession, several clear signals are emerging:
Multiple regulators are actively assessing ownership structures
Common concerns are surfacing across jurisdictions
A single, globally aligned framework has not yet been established
Taken together, this points to convergence in concerns, but not yet convergence in principles or rules. And these differences are not only visible at a global level, but are becoming increasingly evident within national regulatory debates.
National perspectives show a convergence in concern but a divergence in approach
This lack of global consensus is reflected clearly in national discussions, where perspectives on ownership models are becoming more pronounced and, in some cases, more polarised. While private equity investment in audit firms is broadly accommodated in several jurisdictions, subject to independence and governance safeguards, the position is less consistent in the tax and advisory space.
Certain professional and regulatory bodies have raised concerns that external financial ownership may conflict with principles of professional independence, fiduciary duty and the personal accountability traditionally associated with tax advisory services. In parts of Europe, this has led to active policy debate on whether ownership of tax advisory firms should remain restricted to qualified professionals. In Germany, for example, proposals to amend the tax advisory framework have prompted significant discussion around restricting private equity ownership in tax consulting firms, illustrating how national legal frameworks and professional traditions continue to shape the direction of policy.
Taken together, these differing approaches reinforce a broader theme: while the questions facing the profession are increasingly shared, the answers remain jurisdiction-specific. Firms must therefore navigate not a single trajectory, but a patchwork of evolving regulatory positions shaped by local priorities and public interest considerations.
Keeping pace with a moving landscape
As these national debates continue to develop, the regulatory environment surrounding ownership models remains active and, in places, contested. Differences in how jurisdictions approach private equity participation, particularly between audit and tax advisory, highlight the need for firms to stay alert to both local requirements and broader professional expectations.
Why alternative practice structures are under scrutiny
According to IFAC, more than 1,000 accountancy firms globally have taken on private equity investment in the past decade. The ripple effects are significant:
Fewer than 200 initial investments have triggered hundreds of further acquisitions
Groups of firms are being consolidated under common ownership
Activity is concentrated in Europe, the UK & Ireland, and the US
This is not simply about capital entering the profession. It has implications for culture, independence, audit quality, and the long-term structure of the market itself.
What this means for your firm
The landscape for independent mid-sized accountancy firms is evolving regardless of whether external investment has been taken.
Professional bodies are not drawing conclusions on the value or detriment of specific ownership structures. Instead, they consistently focus on highlighting the risks, opportunities and decision points, without prescribing a preferred model.
Understanding the risks and the opportunities
The emerging body of material across the profession does not take a binary view. Instead, it points to areas where firms need to be deliberate and informed.
1.
Transaction structure matters
Not all deals are created equal. The level of risk and opportunity depends on factors such as:
- The degree of investor influence or control
- The use of leverage
- Investment time horizons
- Governance arrangements
Across emerging frameworks, three variables are becoming increasingly important in determining risk exposure:
- The level of investor influence
- The degree of operational cooperation
- The strength of governance separation
Two firms with external investment can therefore sit in very different risk positions. The structure beneath the headline , not the headline itself, determines the outcome.
2.
Independence and conflicts are becoming more complex
External investment introduces new dimensions to independence, including:
- Direct or indirect investor influence
- Broader conflict exposure across group structures
- Expansion of advisory services alongside audit
Safeguarding independence is no longer just an ethical consideration. It is increasingly a matter of governance design, one that must be demonstrable and robust. In some cases, risks can’t just be reduced or controlled. Instead, firms may have to avoid auditing certain companies connected to their investors altogether.
3.
Audit quality: risk and potential upside
Ownership models do not automatically determine audit quality outcomes.
Risks may include:
- Short-term commercial pressures
- Underinvestment in audit between capital cycles
- Fragmentation across large structures
- Dilution of traditional partner oversight
At the same time, potential benefits include:
- Investment in technology
- Operational professionalisation
- Greater consistency and scalability
Ultimately, outcomes depend on whether audit quality is explicitly protected within governance structures, incentives and agreements.
The consolidation of the market
One of the clearest effects of external investment is structural change:
Fewer firms operating in certain audit markets
Increasing concentration
Pressure on smaller and mid-tier firms
Greater emphasis on advisory services
This is not simply consolidation. It represents a reconfiguration of how the market is structured and accessed. Even firms that remain independent may feel the impact through pricing, referrals, talent competition and client expectations.
Networks and alliances
Ownership change has implications beyond the individual firm. How those implications are felt differs between networks and alliances.
Networks typically operate with closer alignment, including shared branding, methodologies and reputation. As ownership models diversify, maintaining that alignment may require greater oversight, particularly where independence and conflicts are assessed across structures.
Alliances, like Praxity, are designed with greater autonomy at firm level. Member firms typically retain control over ownership, governance and strategy. This flexibility allows alliances to accommodate a wider range of ownership models without automatically transmitting risk across the system, provided there is sufficient transparency around influence, governance and safeguards.
For alliances, the focus increasingly shifts towards visibility and understanding rather than enforcing uniformity.
Safeguarding the attractiveness of the profession
Ownership models are also reshaping the talent proposition.
Potential challenges include:
- A shift away from partnership-based career expectations
- Misalignment between traditional expectations and emerging structures
- Changing perceptions of stewardship and public interest
Ownership structures influence culture, and culture in turn shapes retention, leadership development and long-term sustainability.
Future professionals may continue to enter the profession with expectations shaped by traditional models, while encountering environments that operate increasingly along corporate lines.
Emerging concepts and practical resources
Global bodies are approaching these changes from different angles. While some focus on market structure and systemic risk, others are examining how existing ethical frameworks apply in more complex ownership environments.
Consultations and exposure drafts are exploring areas such as:
- Alternative practice structures
- Investor relationships
- Definitions of control and influence
A recurring theme is the distinction between:
- Control
- Significant influence
- Operational cooperation
In some approaches, control alone is not sufficient to create a network relationship. Instead, cooperation in the delivery of professional services becomes a defining factor. These concepts are still evolving. As a result, firms cannot rely on fully settled rules and must continue to apply judgement in assessing independence, conflicts and governance implications.
The takeaway is simply that ownership may create the connection, but cooperation is what creates the regulatory risk.
What firms should be doing now
Firms are no longer choosing simply between taking investment or remaining independent. They are navigating how to remain competitive and compliant at the same time.
Key priorities include:
- Strengthen governance models Independence and audit quality must be embedded into ownership structures from the outset.
- Apply risk frameworks rigorously Identifying, documenting and managing threats and safeguards is becoming increasingly important.
- Prepare for continued regulatory evolution Further clarification and standard-setting activity is expected across multiple jurisdictions.
Looking ahead
The overall trajectory is becoming clearer. What began as market innovation shaped by principles is gradually moving toward more structured and defined regulatory expectations.
However, this shift is not yet complete, and it is not yet globally consistent.
The current body of material across the profession does not advocate for or against private equity or alternative practice structures. Instead, it raises a more fundamental question:
Can accountancy evolve its ownership structures without compromising independence, audit quality and public trust?
The answer will not be dictated by any single body or framework, but by how firms respond collectively to a rapidly evolving and increasingly scrutinised environment.
Neutrality is no longer passive. It requires intent, understanding risk exposure, strengthening governance, and being able to clearly demonstrate how trust is protected, regardless of ownership model.
Through our ongoing insights and HUB publications, we will share periodic updates on how these debates evolve in practice, tracking emerging regulatory positions, identifying common areas of concern, and highlighting where approaches diverge or begin to align