ACCOUNTING

PE CPAs

It’s almost like private equity firms are using the Inside Public Accounting rankings of largest accounting firms as a shopping list.

In 2021 and 2022, PE firms bought stakes in EisnerAmper (18th largest by revenue), Citrin Cooperman (23rd), and Cherry Bekaert (26th).

Then in February, Hellman & Friedman and Valeas Capital Partners bought a reported majority stake in Baker Tilly (10th largest).

Last week’s announcement concerned the highest-ranking CPA firm yet: New Mountain Capital said it would be buying a stake in Grant Thornton, which reported $2.4 billion in revenue for the fiscal year ending July 2023 and, at No. 7 on the IPA rankings, is smaller than only two firms outside the Big Four.

Adding it all up: PE firms have bought stakes in five of the top 26 US accounting firms in less than three years.

Click here for more on PE’s move into accounting firms.—GD

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COMPLIANCE

Warning shot

The Securities and Exchange Commission has a new tool in its arsenal for AI phonies—and it’s finally cracking down.

On Monday, the SEC charged two money managers—Delphia Inc. and Global Predictions Inc.—with making “false and misleading statements” about their AI usage.

“We find that Delphia and Global Predictions marketed to their clients and prospective clients that they were using AI in certain ways when, in fact, they were not,” SEC Chair Gary Gensler said in a statement. Neither company admitted nor denied the SEC’s charges, but both settled and agreed to pay a collective $400,000 in civil penalties. Delphia will pay $225,000, and Global Predictions will fork out $175,000.

In both cases, the charges stemmed in part from misleading statements on the companies’ websites, social media, and/or SEC filings showing just how stringent the SEC plans to be with so-called “AI washing,” or inaccurately listing AI capabilities.

For more on the SEC’s AI-washing crackdown, click here.—NP

CFOS

Feeling half full

It’s officially spring. The sun is shining, birds are singing (at least in our neck of the woods), and CFOs are feeling upbeat.

According to the latest Deloitte CFO Signals survey, CFOs are much more optimistic about both the economy and their companies’ prospects than they were last quarter. Of the 116 CFOs surveyed, from the US, Canada, and Mexico, 59% said the North American economy was “good or very good,” compared with 47% last quarter. And 54% saw the region’s economy improving over the next year, up from 37% in Q4 2023.

CFOs are also more likely to see the glass as half full when it comes to their own companies. 42% felt optimistic about their businesses’ outlook, compared with 38% last quarter and 19% in Q3 2022, its post-pandemic low. Only 11% felt pessimistic, down from 27% last quarter and 41% in Q4 2022.

AI adoption: Half of the CFOs surveyed named finance as one of the top five areas where their organizations are exploring GenAI use. (IT was tops, chosen by 64%). And 93% said it’s at least somewhat important to bring people with GenAI prowess into the finance function over the next two years.

Click here to continue reading.—CV

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