Private equity hits accounting
- Connecticut's State Board of Accountancy warned proposed rules on private-equity investment in CPA firms are overly complex and hard to enforce. - Separately, Wealthsimple moved clients into private-equity and credit funds in ways that raised questions about investor risk and opt-out options. - Regulators are increasingly uneasy about private capital in trusted professional channels, citing enforceability and public-interest concerns ( ).
Connecticut’s State Board of Accountancy told regulators that proposed rules permitting private‑equity investment in certified public‑accounting (CPA) firms are overly complex and difficult to enforce. (hartfordbusiness.com) The board filed formal comments this month arguing that the draft language creates “enforcement gaps” and would be hard for the Department of Consumer Protection to police. (hartfordbusiness.com) That pushback comes as national bodies race to respond: the National Association of State Boards of Accountancy (NASBA) created a task force on private‑equity ownership last year, and the American Institute of CPAs (AICPA) has opened a review of independence rules. (nasba.org) Private equity’s entry into accounting has accelerated since 2024, prompting regulators to flag risks to auditor independence, firm governance and the public interest. (news.bloombergtax.com) Separately, Wealthsimple announced it will migrate standalone Private Equity and Private Credit funds into a new Private Market Fund on June 1, 2026 — with an opt‑out window that closes May 20, 2026. (help.wealthsimple.com) Reporting in The Globe and Mail said some clients found they could not easily opt out and that fund documents show the new vehicle has a risk profile similar to their existing holdings. (theglobeandmail.com) Wealthsimple defends the change as an effort to “provide exposure to globally diversified alternative investment strategies, including private equity, private credit and private infrastructure.” (help.wealthsimple.com) International and U.S. ethics bodies have issued alerts and discussion memos — the IESBA and AICPA have warned firms to consider ethical and independence implications of private capital ownership. (ethicsboard.org) Regulators and platforms now face near‑term deadlines: the AICPA sought public comments last year and NASBA’s task force is active, while Wealthsimple clients must opt out by May 20 if they don’t want the June 1 migration. (journalofaccountancy.com)
