What’s Happening in the CPA Ecosystem?

By Marc Rosenberg, CPA, with contributions from Kristen Rampe, CPA; Matt Rampe, ASA, PCC; Amanda Lilley, CPA, SHRM-CP, PHR; and Jeff Arnol, CPA, JD

Ask random people on the street—or, even better, business executives—if there have been profound changes in the accounting profession over the past 10–20 years. The answer you’ll most likely get is, “You gotta be kidding; CPAs do the same things every year.” How oblivious they are!

We have been preparing a list of the top trends at CPA firms annually for 25 years. We know you’re curious what the trends were 25 years ago, but we’ll get to that in a minute. First, let’s look at what’s going on today.

The Top Trends in the CPA Profession (Early 2025)

No firm is affected by all of these trends. However, all the trends listed are impacting the majority of CPA firms.

1.  REVENUE AND PARTNER PROFITS

• Booming demand—double-digit revenue increases since 2022. Great opportunities.
• Profits rising less rapidly, stunted by rising staff salaries.
• Firms are squeezed: increasing revenue and decreasing supply of staff. Results: client culling, rejection of client prospects that don’t fit, and lots of partner frustration.
• Firms are becoming increasingly niche-focused, boosting profits.

2.  LABOR SHORTAGE

• Continues to be the #1 problem for firms; more acute at smaller firms than larger ones, but both suffering.
• Dwindling pipeline of accountants: college students’ interest in an accounting major is waning. The CPA profession has shot itself in the foot, turning off students due to low salaries, the 150-hour rule, and the difficult and burdensome CPA exam, among others.
• Number of people taking the CPA exam is down 34% from 2016.
• Firms are countering by hiring non-CPAs, outsourcing, offshoring and hiring people in other states. Some firms are questioning the quality of the work of offshore labor.

3.  SUCCESSION PLANNING
Perfect storm of…

• Aging boomers: their massive retirements continue; firms struggle to replace retirees.
• Nearly 75% of working CPAs are nearing retirement.
• Labor shortage exacerbating succession planning.
• CPA firms are awful at succession planning; 70% of first-generation firms never make it to the second.

4.  PRIVATE EQUITY AND MERGERS

• Feeding frenzy with PE firms. Traditional CPA firm mergers remain frenetic.
• Every day, new PE firms emerge because they seek the profitability and stability of CPA firms.
• PE deals with higher valuations than traditional, impacting conventional mergers and buyout plans.
• Initially, all PE activity was with top 50 firms; now it has trickled down to smaller firms.
• Everyone waiting to see what happens when PE deals start to flip.
• Mega-deals between large firms are changing the face of the top 100; expected to continue.
• Baby boomer retirements continue to fuel mergers.
• Majority of acquisitions by top 50 firms are consulting firms, not CPA firms.

5.  REMOTE WORK

• Since Covid, remote work is here to stay. “Hybrid workplace” is the new jargon.
• Many firms require staff to work 2–3 days in the office. This trend is increasing, but few staff want to go back to 5 days a week in the office.
• Less office space needed by some firms.

6.  TECHNOLOGY

• AI! AI! AI! The buzzword of the day. Everyone wondering: will AI replace accounting labor?
• Big gap in timeline of implementing advanced technology: big vs. smaller firms.
• Cybersecurity rising to top of mind for firms.

7.  FIRM MANAGEMENT

• We’re seeing more accountability for partner performance and productivity.

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The Trends of 20–30 Years Ago

This is where it’s fun, though youngsters reading this may not recall the seriousness and relevance of these trends that are etched in the history books of the CPA profession. Here is what we felt were key trends decades ago:

1.  Wealth management picking up steam.
2.  Y2K.
3.  The consolidator movement.
4.  The AICPA suggesting that its members be called “cognitors” instead of CPAs.
5.  CPA firms merging with lawyers.
6.  E-commerce starting to grow exponentially.
7.  Going paperless.
8.  Big GAAP/little GAAP.
9.  Financial reporting scandals and the aftermath.
10.  Heightened attention on leadership development and training; firms starting to create their own universities.
11.  Non-equity partner position getting traction.
12.  IFRS.
13.  Internships becoming the main recruitment source for CPA firms.
14.  Use of the internet and social media to promote the firm and recruit staff.
15.  The dawn of remote and hybrid work.
16.  The percentage of female partners was half what it is today.
17.  Top 100 firms going national instead of residing in their city or region.

Bonus section: These items have been on the top trends list for many, many years

Sometimes, when we prepare our trends lists, we see a handful of issues appear year after year. Alas, they won’t be going away any time soon.

1.  Low supply of staff–yes, even 25 years ago.
2.  The rapid pace of technological innovation and firms struggling to stay on top of it.
3.  Crisis in succession planning caused by baby boomer retirements.
4.  Merger sizzle.
5.  CPA firms adding consulting services.