If you’re following the evolving landscape of CPA firm structures and oversight, NASBA’s latest Invitation to Comment (ITC) is a must-know development, especially if your firm is navigating private equity investments or alternative practice structures (APS). In our newest Genuine Learning Blog, Jaclyn Veno broke down the key themes and what they mean for CPAs, state boards, and the public.

What’s the ITC About?

NASBA’s ITC, formally titled “Alternative Practice Structures and Private Equity Considerations and Questions for the Different Boards of Accountancy,” was released to educate state boards and policymakers on both the benefits and challenges posed by private equity investments in CPA firms. While the influx of private equity is fueling growth, modernization, and smoother succession planning, it also raises new questions about how state boards should step up their regulatory efforts.

To tackle this, NASBA formed a Private Equity Task Force, charged with evaluating the impact of these investments and supporting state boards of accountancy in maintaining effective oversight.

Three Focus Areas for Boards of Accountancy

NASBA’s ITC asks boards to consider three main topics:

1. Independence and Professional Standards

Independence remains foundational to public trust in the CPA profession. APS and private equity can introduce complex relationships between attest firms and unrelated non-attest entities, potentially leading to shared management, evaluations, or compensation systems that risk weakening independence. State boards are being prompted to consider whether existing independence standards are enough—or if stricter rules are needed—to guard audit quality and professional judgment. The AICPA is also re-evaluating its ethical code to address these new models.

2. Disclosure and Public Understanding

Clear disclosure is critical. When private equity is at play, it’s not always transparent which parts of a firm are CPA-owned or how affiliated non-CPA entities interact. NASBA is pushing for the boards to require more prominent and clear disclosures, boost public and client education, and clarify the use of the CPA title in advertising. The goal: make sure the public understands firm ownership and the structure behind audit work.

3. Regulatory Oversight and Enforcement

Traditional regulatory models were designed for simpler firm structures—usually single-state and with straightforward ownership. Today’s complex, multi-state, privately invested APS firms present new enforcement challenges. Boards will likely need to rethink regulatory and enforcement mechanisms and demand more information from firms about their principal business locations and jurisdictional reach. Diverse definitions of “public accountancy” across states also suggest the need for more uniform standards.

Comments Welcome

Stakeholders, including other state boards and interested parties, are encouraged to submit feedback on the ITC by January 31st. This is the profession’s chance to help shape NASBA’s next steps in ensuring both innovation and public protection.

Key Takeaway:
With private equity flowing into CPA firms and new APS models emerging, NASBA is making it clear that strong independence, transparency, and updated regulatory oversight are top priorities. Firms and state boards alike will need to stay agile—and engaged—to navigate the road ahead.