Private equity investment has transformed the accounting industry. Firms that once operated with steady, predictable growth patterns now face aggressive expansion targets and compressed timelines for demonstrating value. While leadership focuses on revenue growth and operational efficiency, there’s a critical factor that often flies under the radar until it’s too late: the role risk management plays in protecting their financial sponsor’s exit strategy.
Why risk management matters more in PE-backed accounting firms
When private equity firms evaluate their portfolio companies for exit, they’re not just looking at revenue multiples and EBITDA margins. They’re conducting exhaustive due diligence that scrutinizes every aspect of risk management, regulatory compliance, and operational controls. A single significant compliance failure, independence violation, or missed conflict can crater a firm’s valuation or kill a deal entirely.
Consider the math: Private equity firms target 3–5x returns over 4–7 years. A compliance-related issue that reduces the exit multiple from 12–8x EBITDA doesn’t just impact the accounting firm, it directly erodes the return on investment of your financial sponsor. This reality places how your firm assesses new and ongoing business, prevents conflicts, and ensures independence squarely in the crosshairs of strategic importance.
Common gaps in traditional client onboarding and risk management
Until very recently, accounting firms built their acceptance, continuance, and independence processes during an era of organic, measured growth. These legacy processes and systems weren’t designed to handle the volume and complexity that PE-backed expansion demands. The result? Critical gaps that become magnified under the pressure of accelerated growth.

Volume overwhelm: Client onboarding processes that worked for 50 new clients per quarter buckle under the pressure of 200. Manual conflict checks that took two weeks now take two months, creating bottlenecks that frustrate partners and delay revenue recognition.
Network complexity: Private equity-backed firms don’t just grow through organic client acquisition — they grow through acquisitions or mergers with other firms, strategic partnerships, and expanded service offerings. Each addition exponentially increases the web of potential conflicts and independence impairments. What was once a manageable network of relationships becomes a complex matrix that’s impossible to effectively navigate manually.
Integration challenges: Major mergers or the rapid roll-up of multiple firms within compressed timeframes have often been central to PE-backed growth strategies. Each acquisition brings its own client base, independence restrictions, and historical conflict decisions that must be integrated into your firm’s risk management processes. The legacy systems and processes struggle to harmonize different firms’ approaches to conflicts identification, independence tracking, and client acceptance standards. The result is fragmented oversight, inconsistent application of policies, and blind spots that emerge at the intersections between acquired entities.
Regulatory scrutiny: High-growth, private equity-backed accounting firms attract more attention from regulators. The Public Company Accounting Oversight Board (PCAOB) and other governing bodies will scrutinize these firms more closely, knowing that rapid expansion strains compliance capabilities. A single regulatory finding can trigger a cascade of reviews that consume resources and create uncertainty during critical exit preparation periods.
How compliance inefficiencies constrain growth
Compliance inefficiencies don’t just create direct costs — they create opportunity costs that can compound over time. When your partners can’t pursue a lucrative client because the conflicts check is stuck in-process, that’s not just lost revenue. It’s also lost momentum, damaged relationships, and reduced competitive positioning.
When independence violations force client disengagement, the financial impact extends beyond the immediate revenue loss. It includes the cost of remediation, potential regulatory penalties, and the reputational damage that makes future client acquisition more difficult and costly.
These hidden drags on growth become particularly acute as exit approaches. Private equity firms conduct extensive operational due diligence, and any indication that compliance processes are constraining or posing a risk to growth will be reflected in valuation multiples.
Building capabilities for compliant growth
Forward-thinking risk leaders are reframing their team’s role in the firm from a cost center to a strategic growth enabler. Instead of being the team that says “no,” they’re becoming the team that confidently and quickly says “yes.”
This transformation requires moving beyond reactivity and building predictive risk management. It means building systems that can identify potential conflicts before they block growth, streamlining acceptance and continuance without compromising thoroughness, and providing real-time insights into your firm’s risk exposure across an increasingly complex organizational network.
The firms that get this right won’t just avoid compliance-related valuation discounts — they’ll also bolster their financial sponsor’s ROI. That’s because future investors are willing to pay a premium for companies that have superior risk management and can give them greater confidence in the firm’s future performance.
What this means for risk leaders
The question isn’t whether your client risk and independence management will be scrutinized. Rather, it’s whether that scrutiny will reveal a strategic advantage or liability. The firms that will emerge strongest are those that recognize this inflection point early and invest in transforming how they onboard clients, assess and monitor risk, and manage independence before the pressure becomes overwhelming.
Your financial sponsor is counting on you to facilitate growth while protecting value. Your clients and the market are counting on you to maintain the highest standards of professional integrity. And your firm’s future is counting on you to prove that exceptional risk management isn’t just possible at scale, but what makes scale possible in the first place.
For risk leaders, the choice is clear: Evolve your risk-management capabilities to match the firm’s ambitions — or watch them become the limiting factor in your firm’s success story.
Ready to support your firm’s next chapter? Contact jey.purushotham@intapp.com for a personalized consultation or visit intapp.com/accounting to learn how Intapp’s AI-powered compliance solutions can help enable compliant growth.