Considerations and Questions for Boards of Accountancy: NASBA's White Paper on Private Equity in CPA Firms, October 2025

A white paper dated October 24, 2025, from the Private Equity Task Force of the National Association of State Boards of Accountancy, NASBA, carries the title "Alternative Practice Structures & Private Equity: Considerations and Questions for Boards of Accountancy." The boards it writes for regulate CPAs and CPA firms in the United States. It asked for comments by January 31, 2026.

While identifying key questions, it says, "this paper is not intended to provide guidance on how Boards of Accountancy should modify their oversight practices or statutory frameworks."

Parts of the paper follow, not the whole.

The Attest Firm and the Entity Beside It

Attest work, as the paper describes it, is the kind of engagement that produces "an examination, opinion, agreed-upon procedures report, or assurance regarding information provided by a third party," and CPAs and CPA firms must generally be licensed to perform it. Non-CPA minority ownership, the paper says, "has long been permitted." But most states' laws require licensed CPAs to hold a majority of a CPA firm's ownership, in equity and in voting rights, and at least 44 jurisdictions require owners who are not CPAs to be individuals actively engaged in the firm's business.

As a result, the paper says, private equity (PE) often takes part through an alternative practice structure, an APS. In the definition the paper quotes from the AICPA's Code of Professional Conduct, that is a form of organization in which a CPA firm that provides attest services is closely aligned with another public or private organization that performs other professional services. Private equity comes in on the non-attest side of the business, while "attest services remain under the control and oversight of licensed CPAs, in compliance with professional and regulatory requirements."

The two sides are close. Under a wide-ranging administrative services agreement, the paper says, the non-attest entity provides centralized administrative functions to the attest firm, among them human resources, staffing and information technology, and the two "generally share branding, websites, and some operational leadership."

Private equity in CPA firms, the paper says, has also coincided with the increased adoption of artificial intelligence within the CPA profession, with the need for more capital to give attest firms better information technology, and with recent waves of consolidation and restructuring tied to retirements at small firms.

Where an attest firm's information technology comes from the entity beside it, as the paper describes, independence is no longer only a question about people.

Questions for the Boards, and Next Steps

The paper puts its questions under three topics: independence and professional standards; disclosure and public understanding; and regulatory oversight and enforcement. Its summary of the first begins, "Independence remains the cornerstone of public trust in the accounting profession." When private equity becomes closely aligned with CPA firms through these structures, it says, complex relationships emerge "that can threaten both actual and perceived independence." It asks "What restrictions should apply to PE investors and their portfolio companies becoming attest clients" of an attest firm within their same shared APS structure. It also asks how peer review, which boards require of CPA firms that provide attest services, should address "the complexity of independence considerations introduced by APS structures with PE investment."

Under disclosure and public understanding, the paper asks whether the boards should require "more prominent and standardized disclosures on websites and marketing materials, distinguishing attest and non-attest entities under common control," and how they can better educate consumers about the distinction between attest and non-attest services in these structures.

The third is regulatory oversight and enforcement. "Firms operating in an APS structure with PE investment," the paper says, "often operate across multiple states with complex ownership structures, exposing regulatory gaps or inconsistencies between jurisdictions." Among its questions is how the boards should coordinate oversight when such firms do business across multiple jurisdictions.

The task force encourages responses from the boards and other key stakeholders. Responses, the paper says, "will guide NASBA and the PE Task Force's next steps on this issue, including potentially suggesting revisions to the Uniform Accountancy Act and Model Rules" for consideration by the AICPA/NASBA Uniform Accountancy Act Committee, along with a task force report and future webinars and presentations. Its date for comments was January 31, 2026.