Accountants, auditors, and tax consultants are unlikely to go out of business anytime soon. Indeed, so long as there are financial regulations and corporate taxes for businesses to contend with, this sector will always be needed.

In recent years, increased regulation and fallout over fraud scandals, as well as accounting firms branching out into peripheral advisory services, have driven increasing demand for staff within accounting firms.

Moreover, the industry has seen increased dealmaking between firms. This provides big business opportunities; HIG purchased the restructuring arm of KPMG in 2021 for £400m (renamed Interpath Advisory).

Equity partners of audit firms are now keen to reap substantial profits from selling the various firms or divisions, leading to significant “roll-up” activity in the sector. PE investors are jumping in too, interested in the steady annual audit revenue and lumpy but higher-margin advisory revenue.

There is a divisive ethical discussion being had; will an audit partner be as diligent if the firm is owned by a PE fund pushing for higher profits as it would be owned outright by the partners whose reputation and liability is on the line?

As PE investors get more involved, who they sell their investment to also gets called into question. If they listed an audit firm, it might then have “activist” investors pushing for larger financial returns, breakups, or more acquisitions which benefit the shareholders but not the clients.

The balance between sensible financial returns for auditors, independence, and client scrutiny needs to remain intact.