Buying A Cpa Firm Due Diligence (2026)

Due diligence for a CPA firm acquisition involves verifying that the practice's revenue is sustainable, its client base is transferable, and its operational foundation is stable. A solid due diligence report should evaluate four core pillars: , Client Base , Staffing , and Legal/Regulatory compliance . 1. Financial Performance & Quality of Earnings

CPA & Accounting Practice Due Diligence - Poe Group Advisors

: Analyze accounts receivable aging and collection efficiency. High WIP (Work in Progress) or aged debtors can signal poor billing practices.

: Review 3–5 years of Profit & Loss statements, balance sheets, and tax returns.

: Break down revenue by service line. Recurring fees (e.g., CAS, monthly bookkeeping) typically command higher valuation multiples than one-time tax prep or lumpy audit fees.

The goal is to verify that reported income matches actual cash flows and tax filings.

In a CPA firm sale, you are essentially buying a book of business; its "stickiness" is paramount.