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Chris Good CA’s candour about his recovery from a mental health crisis offers a signal lesson for the profession, says President Clive Bellingham CA
Opportunity
or threat?
The recent ICAS Practice Conference shone a light on the growing number of firms being bought by private equity. This is a live issue for the sector, says President Karen Scholes CA
Last month, I joined members from across the UK for the annual ICAS Practice Conference in Glasgow. You can read a full report of the day, along with the takeaways, here, but I wanted to share my observations from the event.
We had attendees from across the spectrum of small and medium-sized accounting practices, from those who have been running and growing their firm over a period of decades, to others who have only recently started their own business. And a number of talking points emerged.
Karen Scholes on a panel at the Practice Conference
Karen Scholes on a panel at the Practice Conference
One session on cybersecurity, hosted by Kerrie Machin, Director of Business Development at Mitigo, and Katie O’Neill, Head of Skills Academy at Cyber and Fraud Centre Scotland, certainly got the audience thinking. They highlighted the example of the recent M&S attack – which used social engineering to exploit a weakness through a third-party supplier – to demonstrate that protecting your practice extends beyond the four walls of your office.
Many of our members, both in practice and industry, regularly use LinkedIn, and there was a memorable presentation from Ashley Leeds, aka the 15 Minute Guy, on how to boost your presence on the platform. The response to that session means we will come back to that subject in a future issue of CA magazine.
“While for many, outside investment could represent a lifeline, some firms are independent, very proud of it and would resist any overtures from private equity”
For the first time ever, we had an ICAS practice hub on site, which included representatives from our learning team, practice support, EDI and social mobility, along with ICAS Cares and the ICAS Foundation. This was a really important and beneficial addition to the conference, which meant our internal team could meet and chat with members face to face.
Also offering food for thought were James Gosling, MD of AJ Chambers, and Allan Wilson, MD of Wilson Partners, talking about “what a good practice looks like”. It provided a natural link from the first panel session, which I sat on, titled “Navigating challenges in a modern accountancy firm”.
That brings me on to what for me was the biggest discussion point on the day. You cannot be in this profession and fail to have noticed the number of recent mergers or private-equity buyouts.
The ICAS Regulation Board formed a sub-group to investigate this subject which was chaired by Graham Marjoribanks CA (who also chairs the Policy Leadership Board). In May, they published a report titled “Private Equity and Audit: A Threat or an Opportunity?” which I would urge anyone with any interest in the practice sector to read.
It clearly sets out the current landscape for audit, explaining why firms have been attracting investment from private equity and, crucially, the positives, negatives and possible long-term implications of a practice accepting this investment. While the paper considers private equity in the context of audit firms, many of the considerations apply equally across practice more generally.
The report states:
“There are contrasting views as to whether consolidation of firms within the audit market is a positive or negative trend. While there are other important factors at play, it is likely that private equity investment is contributing to some extent at least to the decline in the number of licensed audit firms in the UK. The FRC reported in September 2024 that there were 4,038 licensed firms in 2023, compared with 5,127 firms in 2019 (a decline of more than 20% in only four years). The number of Responsible Individuals (RIs) registered by ICAS has also declined, but at a much slower rate.
“Any acceleration of this trend in audit firm numbers could make it more difficult for some entities to find an auditor (particularly for small and medium-sized entities) or for there to be less competition and therefore a risk of increasing audit costs. Alternatively, some people believe that consolidation could help to build resilience, capability and competition, depending on the size of firms involved.”
As the report also explains, it is by no means confined to small and medium-sized firms. Ultimately it argues that there needs to be:
• Further review and study of the impact of private equity investment and other external capital providers in audit and other professional service firms, in the UK and abroad. A key focus of this would be recognising the risk that financial considerations can unduly influence behaviours whilst recognising that audit quality can be enhanced with significant investment in platforms and methodologies.
• An open and balanced debate of the ownership requirements amongst key stakeholders, considering not simply the role of private equity, but other models and approaches, including the scope for a more principles-based approach. The restrictions contained in the extant model are there to mitigate the threat that providers of capital will unduly seek to influence behaviour. Therefore, any changes which are proposed will need to be assessed to ensure that they contain appropriate safeguards to mitigate this threat.
• Closer collaboration between auditor licensing bodies to ensure that the ownership requirements are being applied consistently, identifying and understanding the scope for audit firm structures which are compliant in form but not substance.
This is undoubtedly a live issue for the profession, just as it has been across the economy more broadly, and it’s one we will return to in the future. While for many, outside investment could represent a lifeline, some firms are independent, very proud of it and would resist any overtures from private equity.
The planning that goes into the ICAS Practice Conference starts from the moment the previous one ends. In my closing remarks I asked the audience that if they have any thoughts or ideas about what we should be doing in 2026 we would love to hear from them.
Hopefully the attendees enjoyed the day as much as I did – the numbers still networking and socialising long after the bar had closed suggests they did. Here’s to next year.
Find more practice resources
Opportunity
or threat?
The recent ICAS Practice Conference shone a light on the growing number of firms being bought by private equity. This is a live issue for the sector, says President Karen Scholes CA
Last month, I joined members from across the UK for the annual ICAS Practice Conference in Glasgow. You can read a full report of the day, along with the takeaways, here, but I wanted to share my observations from the event.
We had attendees from across the spectrum of small and medium-sized accounting practices, from those who have been running and growing their firm over a period of decades, to others who have only recently started their own business. And a number of talking points emerged.
Karen Scholes on a panel at the Practice Conference
Karen Scholes on a panel at the Practice Conference
One session on cybersecurity, hosted by Kerrie Machin, Director of Business Development at Mitigo, and Katie O’Neill, Head of Skills Academy at Cyber and Fraud Centre Scotland, certainly got the audience thinking. They highlighted the example of the recent M&S attack – which used social engineering to exploit a weakness through a third-party supplier – to demonstrate that protecting your practice extends beyond the four walls of your office.
Many of our members, both in practice and industry, regularly use LinkedIn, and there was a memorable presentation from Ashley Leeds, aka the 15 Minute Guy, on how to boost your presence on the platform. The response to that session means we will come back to that subject in a future issue of CA magazine.
“While for many, outside investment could represent a lifeline, some firms are independent, very proud of it and would resist any overtures from private equity”
For the first time ever, we had an ICAS practice hub on site, which included representatives from our learning team, practice support, EDI and social mobility, along with the ICAS Foundation. This was a really important and beneficial addition to the conference, which meant our internal team could meet and chat with members face to face.
Also offering food for thought were James Gosling, MD of AJ Chambers, and Allan Wilson, MD of Wilson Partners, talking about “what a good practice looks like”. It provided a natural link from the first panel session, which I sat on, titled “Navigating challenges in a modern accountancy firm”.
That brings me on to what for me was the biggest discussion point on the day. You cannot be in this profession and fail to have noticed the number of recent mergers or private-equity buyouts.
In May, ICAS published a report – by Robert Mudge, ICAS Executive Director of Regulation, and Graham Marjoribanks, Vice Chair and Head of Audit at Johnston Carmichael – titled “Private Equity and Audit: A Threat or an Opportunity?” which I would urge anyone with any interest in the practice sector to read.
It clearly sets out the current landscape for audit, explaining why firms have been attracting investment from private equity and, crucially, the positives, negatives and possible long-term implications of a practice accepting this investment. While the paper considers private equity in the context of audit firms, many of the considerations apply equally across practice more generally.
The report states:
“There are contrasting views as to whether consolidation of firms within the audit market is a positive or negative trend. While there are other important factors at play, it is likely that private equity investment is contributing to some extent at least to the decline in the number of licensed audit firms in the UK. The FRC reported in September 2024 that there were 4,038 licensed firms in 2023, compared with 5,127 firms in 2019 (a decline of more than 20% in only four years). The number of Responsible Individuals (RIs) registered by ICAS has also declined, but at a much slower rate.
“Any acceleration of this trend in audit firm numbers could make it more difficult for some entities to find an auditor (particularly for small and medium-sized entities) or for there to be less competition and therefore a risk of increasing audit costs. Alternatively, some people believe that consolidation could help to build resilience, capability and competition, depending on the size of firms involved.”
As the report also explains, it is by no means confined to small and medium-sized firms. Ultimately it argues that there needs to be:
• Further review and study of the impact of private equity investment and other external capital providers in audit and other professional service firms, in the UK and abroad. A key focus of this would be recognising the risk that financial considerations can unduly influence behaviours whilst recognising that audit quality can be enhanced with significant investment in platforms and methodologies.
• An open and balanced debate of the ownership requirements amongst key stakeholders, considering not simply the role of private equity, but other models and approaches, including the scope for a more principles-based approach. The restrictions contained in the extant model are there to mitigate the threat that providers of capital will unduly seek to influence behaviour. Therefore, any changes which are proposed will need to be assessed to ensure that they contain appropriate safeguards to mitigate this threat.
• Closer collaboration between auditor licensing bodies to ensure that the ownership requirements are being applied consistently, identifying and understanding the scope for audit firm structures which are compliant in form but not substance.
This is undoubtedly a live issue for the profession, just as it has been across the economy more broadly, and it’s one we will return to in the future. While for many, outside investment could represent a lifeline, some firms are independent, very proud of it and would resist any overtures from private equity.
The planning that goes into the ICAS Practice Conference starts from the moment the previous one ends. In my closing remarks I asked the audience that if they have any thoughts or ideas about what we should be doing in 2026 we would love to hear from them.
Hopefully the attendees enjoyed the day as much as I did – the numbers still networking and socialising long after the bar had closed suggests they did. Here’s to next year.
Find more practice resources
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