Why private equity investment in accounting firms requires improved conflict checking

PE investment creates growth expectations

If your firm has taken PE investment, you're likely to grow through organic means and acquisitions.

This growth, combined with the PE ownership of your firm, means your firm's compliance and independence challenges have become complex. That's because when your firm is taking on a new client, it must check that client against not only your firm's existing clients, but also all the companies owned in whole or in part by the PE firm that invested in your firm. Manually conducting such a broad conflicts check would require many staff hours and a very organized process.

To add further complexity, if you're looking to acquire another accounting firm (a common scenario among accounting firms in receipt of PE capital), you'll have to check for conflicts on all their clients against both yours and your PE firm's holdings.

These extensive conflict reviews are further complicated by the need to check each potential client's corporate tree against the corporate trees of your clients. While there may not be a conflict between a new prospective client's parent company and the parent companies of your clients, your potential client's subsidiaries may have a conflict with one of the subsidiaries of your clients.

These complex conflict reviews involving corporate trees and PE structures call for a conflict-checking software built for just these scenarios. Intapp Conflicts is accounting firms' first choice for surfacing, resolving, and reporting conflicts across corporate trees and PE portfolio companies.