Supporters of the buyout trend maintain that private equity will help mid-tier firms gain the financial backing and expertise to compete with the Big Four accounting firms – Deloitte, EY, KPMG and PwC.

The Institute of Chartered Accountants of Scotland (ICAS) called in June 2025 for an urgent review of the rules governing who can own audit firms, saying: “Difficult ethical decisions might face undue influence as a result of commercial pressures.” 

Protecting audit quality and auditor independence

Bruce Cartwright CA, ICAS CEO, said: “Technology, geopolitics, and changing public expectations are transforming the way the world does business. That’s why we believe the time is right to review the rules around who can own audit firms.

“These rules shouldn’t be disregarded lightly – they must be independently and objectively assessed to ensure that they continue to best serve the public interest. 

“The audit profession is evolving at an unprecedented rate, driven by developments in AI, increasing focus on sustainability and global economic uncertainty.

“In fact, we expect more change in the next five years than we’ve seen in the past 50. 

 

As the landscape shifts, it’s crucial that government, regulators and professional bodies keep the public interest at the heart of any decisions

“As the landscape shifts, it’s crucial that government, regulators and professional bodies keep the public interest at the heart of any decisions. 

“Audit plays a vital role in how capital is allocated in our economy, and that responsibility must guide any changes to the current framework.”

“Our top priority is maintaining strong audit quality and auditor independence, regardless of where investment in audit firms comes from. That’s essential to ensure continued trust in financial reporting.”

Overseas audit operations requiring professional judgement face regulatory scrutiny

Another element is the growing concern of regulators about the offshoring operations of the Big Four. Deloitte, EY, KPMG and PwC have built significant operations in India as they attempted to lower costs and gain access to highly skilled workers who could give round-the-clock support.

However, the Financial Reporting Council has warned that a reliance on overseas teams to handle complex audits and apply ‘professional judgement’ is concerning. 

This comes as fines have increased over accounting firms’ failures to supervise their networks adequately.

The FRC has been looking at how the major accounting firms control activities elsewhere in their international networks.

This has given some UK mid-tier firms a foothold in the lucrative plc audit and in government work which requires accounts to be prepared in the UK. [1] 

Graham Lironi reviews private equity investment as ICAS calls for an audit firm ownership review, for the Autumn 2026 edition of The Business Magazine.

FAQs

Why are private equity investors interested in audit and accountancy firms?

Supporters argue that private equity can provide capital and expertise to help firms invest in technology, expand their services and compete with larger rivals.

 

What is ICAS calling for?

The Institute of Chartered Accountants of Scotland is calling for a multi-stakeholder review of the framework governing who can own audit firms.

 

What concerns does private equity investment raise for audit?

ICAS highlights the risk that commercial pressures could influence difficult ethical decisions. It says audit quality and auditor independence must remain priorities regardless of the source of investment.

 

Why does audit quality matter beyond the profession?

Reliable audits support trust in financial reporting and help investors allocate capital. ICAS argues that the public interest must guide any changes to audit firm ownership rules.

Read Graham Lironi's Autumn 2026 Accountancy Review.