State regulators are working to keep pace with private equity-backed firms that are testing the edges of long-standing ownership and independence rules, and the concern is not abstract, Bloomberg Law states. As more firms adopt complex structures that separate audit from tax and advisory under affiliated entities, boards worry that the value of the CPA licensure could be diluted and that audit quality could suffer in ways that ultimately touch the capital markets .

The ownership model drawing the most attention relies on a two-part design. A new business entity, open to outside investment, operates tax and advisory and provides shared services, while the legacy CPA firm performs audit and assurance. In day-to-day practice, partners and audit teams often sit within the new entity and are leased back to the attest practice through service agreements. That arrangement complicates traditional oversight, particularly for multi-state firms, and makes it harder to verify requirements such as the 51 percent CPA-owner threshold or even to know when non-CPA owners enter the picture.  

Bloomberg Law reports that regulators describe both structural and ethical risks. Haley Lyons, chair of the Oregon Board of Accountancy, called private equity “a very profit-driven, short-term ownership structure,” and framed the core questions as how to preserve long-term public relationships and uphold quality standards over time. Elizabeth Almer of Portland State University noted that some structures appear designed to sit outside public-accounting definitions even while delivering similar services, which erodes trust in the rules meant to protect independence. Firms, for their part, are asking for clearer conflict-of-interest guidance and say they are building internal safeguards around promotions, staffing, and client acceptance.  

States are also responding, with boards forming a task force to study governance, independence, and public perception under these models. Oregon is exploring updates to reach businesses that exert significant influence over legacy CPA firms, with a target for the 2026 legislative session. Virginia plans to review its licensing and independence requirements over the next year, while boards such as Oklahoma’s are pressing firms to document ownership and protections against outside influence.