What Are the Biggest Opportunities for Audit Firms?

Audit firms are finding growth in three places: advisory services, AI-enabled delivery and a mid-market that private equity is reshaping. In Accounting Today's 2026 Top 100 Firms survey, firm leaders named advisory and consulting as their single biggest opportunity, ahead of any traditional service line [1].

The pressure behind this shift is real. Firms are being asked to do more with fewer people, and private equity has invested billions of dollars in the profession in just a few years [3]. For firms that plan well, both trends create openings as well as risks.

Key Takeaways

• Advisory is growing faster than traditional audit and compliance work. The median client advisory services (CAS) practice grew 17% in 2023, outpacing overall firm growth [2].
• Private equity has invested an estimated $29 billion in U.S. accounting firms since 2020, and around half of the top 30 firms were projected to have PE backing by late 2025 [3].
• AI is freeing up capacity for higher-value work. Accountants using generative AI moved about 8.5% of their time away from routine data entry and reported 21% more billable hours [4].
• Specialist niches such as government, nonprofit and fractional CFO services can command higher margins and build stickier client relationships [1]. CAS practices focused on an industry niche report 38% higher median revenue [2].

Advisory Is Where the Growth Is

Firm leaders in the Accounting Today survey were clear that advisory work offers the biggest opportunity [1]. Transaction advisory, forensic accounting and business valuation are in particular demand, as clients look for help with problems that go beyond compliance. At Bennett Thrasher, for example, advisory already accounts for 25–30% of the business and is growing faster than audit and compliance [1].

Benchmark data supports this. The AICPA and CPA.com CAS Benchmark Survey found that median CAS revenue rose 61% year on year, and that practices offering CFO-level advisory generated 30% more monthly recurring revenue [2].

AI as Leverage, Not Just Efficiency

Firm leaders increasingly see AI as a way to escape commoditization rather than simply a way to cut costs. Armanino's Chris Carlberg argues that firms need to use technology, particularly AI, to break out of the cycle of commoditization [1]. Firms that continue to rely on manual delivery risk being undercut on price by competitors that have automated.

Early evidence on productivity is encouraging. A 2025 study by researchers at Stanford and MIT found that accountants using generative AI closed their books 7.5 days faster and provided 55% more weekly client support than non-users [4]. Adoption is also accelerating: 60% of tax firms now use AI-powered research every week, up from 33% a year earlier [5]. The biggest gain is not the cost saving itself, but the time it frees up for senior staff, the scarcest resource in the market, to focus on advisory work that commands a premium. This mirrors what we have seen in how AI is transforming audit and assurance services [6].

The PE Consolidation Wave Cuts Both Ways

Private equity has moved quickly. Between 2020 and mid-2025 there were 53 notable PE transactions in U.S. public accounting, and half of the top 30 firms were projected to have PE backing by late 2025, compared with none in 2020 [3]. PE-backed firms are using this capital to upgrade technology and expand into higher-margin advisory services [3].

For independent firms, this creates an opening. As one Nebraska firm leader put it, firms of his size are well positioned to serve clients who feel "lost" in the merger activity [1]. Independents that compete on relationship depth and responsiveness, rather than scale, are well placed to win those clients. Other leaders warn that consolidation can cause firms to lose good employees, partners and clients [1], and those people and clients will look for a new home.

Picking a Niche Instead of Trying to Serve Everyone

Government accounting, nonprofit advisory and fractional CFO services were all highlighted as areas that can command higher margins and build stickier client relationships than generalist compliance work [1]. The benchmark data points the same way: CAS practices with an industry niche report 38% higher median revenue and 51% higher net revenue per client [2]. None of these niches is large on its own, but each serves clients who value continuity and specialist knowledge over the lowest bid. Choosing the right niche is a positioning decision that benefits from competitor benchmarking before a firm commits to it.

Talent as a Growth Lever, Not Just a Cost Problem

The profession's talent shortage is also a chance to rethink how work is staffed. Firm leaders see an opportunity in hiring non-CPAs for work that does not require a CPA license [1], which frees licensed staff for the advisory engagements that grow revenue. Forvis Mazars' Tom Watson stresses that investment in technology needs to be matched by equivalent investment in people and culture [1]. Firms that offer clear career paths and flexible working, not just competitive pay, will be better placed to attract and keep the people this growth depends on.

Frequently Asked Questions

Should audit firms move into advisory services?

For most firms, the evidence says yes. Firm leaders rank advisory as their biggest opportunity [1], and CAS practices have been growing faster than firms overall [2]. Transaction advisory, forensic accounting and valuation work also tend to earn better margins than commoditized compliance work.

How can smaller audit firms compete with PE-backed consolidators?

By competing on relationship depth and responsiveness rather than scale. Clients absorbed into large PE-backed firms can feel overlooked, which creates an opening for independent firms that stay close to their clients [1].

What role does AI play in audit firm growth strategy?

AI is becoming a competitive necessity rather than an optional efficiency gain. It frees senior staff for higher-margin advisory work, and research shows that accountants using AI deliver more client support and record more billable hours than those who do not [4].

Phronesis Partners helps audit and accounting firms size new service lines, test their positioning with buyers and benchmark competitors through our Competitive Intelligence and Desk Research services, giving leaders the evidence they need to make a confident advisory or niche-market investment.

References

[1] https://www.accountingtoday.com/news/the-biggest-opportunities-for-accountants

[2] https://www.cpa.com/news/aicpa-and-cpacom-benchmark-survey-client-advisory-services-cas-practices-report-17-growth

[3] https://www.njcpa.org/article/2026/07/17/the-rapid-growth-of-private-equity-investment-in-public-accounting

[4] https://www.journalofaccountancy.com/news/2025/aug/calculating-ais-impact-on-cpas-new-study-quantifies-time-savings/

[5] https://www.cpa.com/news/blue-j-and-cpacom-survey-finds-ai-adoption-among-tax-firms-has-nearly-doubled-one-year

[6] https://www.phronesis-partners.com/resources/publication/how-is-ai-transforming-audit-and-assurance-services