Is M&A activity still high?

In 2024, M&A activity is rebounding from the environment of rising interest rates and geopolitical uncertainties. We are optimistic that 2024 will have strong M&A activity and some of the pent up demand will release, but it can change depending on the impact of having an election year in 2024.

Has the EY breakup had a big impact?

Overall, the accounting profession has had a lot of disruption with financial sponsors investing in many top 100 accounting firms and top ten accounting firms like BDO unanimously voting to establish an ESOP. The breakup plan could result in a shifting landscape for the other Big Four firms to follow suit. The additional revenue estimated to be $10 billion for consulting by getting rid of the independence requirements is well aligned with our view and our plans as a Firm to focus on a customer centric approach to clients that allows them to not only fulfill their compliance requirements, but also get high touch consulting work throughout the process.

How would you describe the health of the accounting industry in the US in terms of customer demand, fee pressure, and staff recruitment and retention?

The overall health of the accounting industry is mixed. While customer demand is high for US accounting firms, the fee pressures have been constrained with a lack of finding the right talent for clients that want value-added work. We are positioning ourselves to focus on the client, the needs of their business and working with them to be trusted advisors that can help them accelerate their own business growth.

Are there any services areas where demand has grown over the last 12 months?

We have seen a growth in a need for additional technology whether it is for cybersecurity, cloud-based solutions, and specialized services such as wealth management, FP&A and virtual CFO services.

Has there been any significant consolidation or merger activity in the accounting profession?

Yes, we have seen it in the top 10 firms as well as many other smaller specialty accounting firms. Our own growth has quadrupled in number of people and tripled by revenue through our own acquisitions, which have been on track to be approximately four a year.

What are your expectations for the next 12 months - are there any potentially significant developments in the pipeline?

We are focused on continuing to invest in technology, people and innovation.

Have there been any significant regulatory developments in the US over the last 12 months?

Accounting firms are facing a rapidly accelerating pace of change and the most significant developments in 2023 that impact accounting firms include the following:

• ACCOUNTING: Adopting the new GAAP standard for credit losses (ASU 2016-13), which requires clients to change their internal processes for bad debt allowances to capture forward-looking information. The adoption requires our audit professionals to be proactive and work with clients before year-end to identify the reasonable and supportable forecasts.
• ASSURANCE: Creating new assurance services for the environmental, social and governance (ESG) regulations that are being passed globally. Most accounting firms have clients that operate across borders as well as those clients have customers that are now subject to these new ESG regulations. We are already training our audit professionals about the new regulations in order to meet the future demands for these services.
• TAX: Complying with the Corporate Transparency Act and the beneficial ownership information (BOI) requirements. This was especially challenging since there was uncertainty about the BOI filing requirements and whether the “unauthorized practice of law” would create new risks for CPAs.