Letter to NASBA on Alternative Practice Structures White Paper

January 26, 2026

NASBA Private Equity Task Force

RE: October 24, 2025, White Paper title Alternative Practice Structures & Private Equity: Considerations and Questions for Boards of Accountancy

Dear Chair Caldwell and Members of the NASBA Private Equity Task Force,

The Virginia Society of CPAs (VSCPA) has reviewed and appreciates the opportunity to respond to the White Paper issued by the NASBA Private Equity Task Force on October 24, 2025 — Alternative Practice Structures & Private Equity: Considerations and Questions for Boards of Accountancy. The VSCPA is the leading professional association in Virginia dedicated to enhancing the success of all CPAs and their profession by communicating information and vision, promoting professionalism, and advocating members’ interests. The VSCPA membership consists of nearly 12,000 individual members who actively work in public accounting, private industry, government, and education.

In May 2025, the VSCPA Board of Directors created a Changing Firm Models Task Force to evaluate the key trends with alternative practice structures (APS) and impact of private equity (PE) on the CPA profession. This Task Force explored APS, PE and changing firm models, gained understanding of the ethical issues related to the APS and PE models, and discussed implications for the VSCPA and its members related to PE in particular.

The VSCPA Changing Firm Models Task Force has reviewed the White Paper and offers the following feedback to the NASBA PE Task Force for thoughtful consideration.

Section 1 — Independence and Professional Standards

We strongly agree with the White Paper’s emphasis on independence as the cornerstone of public trust in the CPA profession. The Task Force appropriately identifies independence and professional standards as the most critical area for regulatory focus.

APS arrangements involving PE create highly complex ownership, compensation and governance relationships that may threaten both independence in fact and independence in appearance. Even where formal safeguards exist, the growing layers of indirect influence — particularly as PE-backed entities are sold, recapitalized or transferred multiple times — raise concerns about whether independence can realistically be maintained over time. Our Task Force expresses uncertainty that any framework can fully mitigate these risks as structures become more complex and ownership turns over.

At the same time, we do not believe that prohibiting PE involvement is a practical or desirable solution. Other regulated professions and industries (such as investment banking) have developed workable frameworks that balance external investment with independence obligations. The CPA profession should not be excluded from capital markets simply because the issues are difficult. A nationally uniform, transparent, enforceable framework — even if imperfect — may better serve the public interest than informal or inconsistent arrangements operating without clear oversight.

We also note that the White Paper does not address PE investors’ exit strategies, which we believe warrant further consideration. PE investments are typically made with a defined time horizon and an eventual liquidity event, such as a sale to another PE firm or an initial public offering (IPO). If a PE-backed non-attest entity were to pursue an IPO, important questions arise:

What becomes of the closely aligned audit practice that cannot be publicly owned?
Does the attest firm risk becoming a structurally subordinate or under-resourced entity?
Are there systemic risks to audit quality and professional judgment if a significant portion of the profession evolves toward models where audit practices are financially dependent on publicly traded consulting organizations?

We encourage NASBA to explore these longer-term implications as part of its ongoing work.

Finally, we generally do not support adopting stricter independence laws at the state level beyond existing professional standards. Instead, we favor clearer guidance, enhanced frameworks and improved enforcement mechanisms that help determine whether independence is satisfied in fact and appearance under current rules.

Section 2 — Disclosures and Public Understanding

Our Task Force largely agrees that enhanced disclosure and transparency are essential components of any regulatory approach to APS and PE involvement.

We support consideration of more prominent, standardized disclosures — particularly on firm websites and marketing materials — clearly distinguishing attest and non-attest entities operating under common branding or control. Transparency benefits not only regulators and peer reviewers but also prospective clients who should understand the nature of the services being provided and the structure of the firm providing them.

That said, some Task Force members questioned whether additional marketing disclosures will meaningfully improve consumer understanding. In practice, many clients may not fully appreciate the distinctions between attest and non-attest services, and there is concern that disclosures alone could devolve into “smoke and mirrors” without effective education and enforcement.

We also believe the use of the CPA title deserves careful attention. Strengthening the CPA brand is critical, but restrictions on title usage should avoid unintended consequences. For example, limiting the ability of licensed CPAs working in non-attest entities (such as tax or advisory practices) to use the CPA designation could create confusion, reduce professional mobility and weaken, not strengthen, the brand.

Ultimately, disclosures should enhance clarity without misleading the public or diminishing the value of CPA licensure across legitimate professional roles.

Section 3 — Regulatory Oversight and Enforcement

We agree that existing regulatory frameworks were not designed for the complexity and multi-jurisdictional nature of modern APS and PE-backed firm structures.

The Uniform Accountancy Act (UAA) may serve as an effective vehicle for introducing greater consistency across jurisdictions, particularly with respect to definitions such as “active individual participant” and “affiliated entities.” Clear, uniform definitions would support practice mobility while reducing regulatory ambiguity.

We also believe Boards of Accountancy would benefit from consistent standards regarding a firm’s principal place of business and jurisdictional nexus. As firm structures become increasingly national — or global — it is essential for firms and regulators alike to understand which state laws apply and which boards have primary oversight responsibility.

Conclusion

The VSCPA appreciates the efforts of the NASBA Private Equity Task Force to review the benefits and challenges of PE investment in the accounting profession and identify ways to support state boards of accountancy in their oversight responsibilities to protect public interest.

We support continued exploration of APS and PE models through a regulatory lens that emphasizes independence, transparency and public protection, while also recognizing the profession’s need to innovate, evolve and access capital in a competitive marketplace.

We appreciate the opportunity to share feedback and are committed to working alongside NASBA, AICPA and other stakeholders in shaping the future of the accounting profession as PE investment continues to play a more prominent role. Please feel free to contact me or VSCPA Vice President, Advocacy & Pipeline Emily Walker, CAE, at (804) 612-9428 or ewalker@vscpa.com if we can be of further assistance.

Sincerely,

Stephanie R. Peters, CAE
President & CEO
Virginia Society of CPAs