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Joined the service line @ Senior level a few months ago. Some thoughts:
A) Overly commoditized, which enables extreme AI disruption ($10 bucks to produce a QoE), but don’t think its material in the short term, due to point C
B) Deals / M&A is a handshake business. There are smarter accountants, smarter consultants, smarter lawyers, and smarter bankers in non M&A SSLs, but really, will always need two hands to shake
C) It’s never about the numbers. Even when those financial buyers just need to flash a report to their IC, it’s really less about the number we get to, and more to what those numbers mean. Are we identifying material adjustments that a non-accountant would never identify? Are we able to identify NWC inclusions or nuances that offset or affect DDL?
D) At the PPMD level, audit has virtually 0 go-get today. As long as there’s someone selling something, anywhere, we will exist
E) A good prompter can leverage VSCode/CodEx/ClaudeCode to create any datapack / deal tool they need. So staff / senior / offshore augmentation work risk exists. And they already are doing this at all of the B4s
F) Audit procedures will likely never be fully replaced for certain areas. But for Fund of Fund audits where you just flux text and confirm NAV? Lol, it’ll start tomorrow
In the MM, AI has definitely impacted, it can work out issues, compile data, draft tables, reports, solve cash proofs. But it's not the whole process by any stretch. We already had a miriad of tools and excel templates to save us time, so the incremental add isn't huge for firms with the workflow infrastructure already there. AI also frequently struggles with the right context, goes over or under, doesn't have the judgement required, which is where the expensive time is anyway.
It's a time saver but not universal. It's also a quality point which only increases the level of work we can and do now do. What was near impossible or far too costly before has started to become viable, which only increases our scoping.
At the same time, PE investment in accounting forms has led to a flood of CPA firms joining in. Prices are crazy now on the sell side. So too has the quality, I've never seen it so bad. Firms passing on items like POC, inventory, revenue recognition, just skipping it to keep costs down. We're frequently seeing sell sides where they've missed 10%+ of EBITDA adjustments.
It doesn't feel sustainable, we're in a transitionary period for sure, it's hard to see where it goes. Buy side is more sticky, with a few exceptions PE isn't going to go in for bad work for a lower price.