Christopher Stout, Partner/Managing Member, Rosenberg Rich Baker Berman, P.A./RRBB Advisors, LLC

In an interview with Invest:, Christopher Stout, partner and managing member at accounting and advisory firm RRBB*, said that strategic growth, talent development, and industry adaptation have defined the firm’s evolution over the past year. “Our network, Crete Professionals Alliance, was recognized as the fastest-growing network in our space, growing by more than 300%,” Stout said.

What changes have had the biggest impact on your organization in the past year and in what ways?

It’s been an exciting year for us. Over the past 12 months, we’ve experienced significant growth. We were featured in Accounting Today, which ranks the top accounting firms in the country. Our network, Crete Professionals Alliance, was recognized as the fastest-growing network in our space, growing by more than 300%.

In August 2023, we completed a private equity transaction, selling a percentage of our business. This is becoming increasingly common in our industry — not just in accounting, but among engineering and law firms as well. Since that deal, we’ve seen tremendous growth. We’ve acquired or opened several new offices. Our office locations in Somerset, Union, Clark, Wall, Martinsville, and Maplewood, NJ, as well as New York City — and more are planned in the future.

One major focus has been integration. We’re working hard to align the newly acquired firms with our standards, culture, policies, and procedures, especially our quality control protocols. It has been a challenging but rewarding effort.

Technology has also played a huge role. Thanks to the investment from Crete, we’ve been able to upgrade our audit tools, some of which now include artificial intelligence. This has improved both our efficiency and the quality of our work. On the audit side, which is my area of focus, we serve both public and private companies of all sizes. These new tools have been transformative.

Additionally, we’ve focused heavily on hiring highly qualified people. Regulatory changes have also demanded our attention. We’ve worked diligently to stay compliant with evolving standards.

What is your perspective on the accounting and advisory industry in New Jersey?

Across the industry, including here in New Jersey, we’re seeing a few key trends. One is the adoption of data analytics and intelligent software, which continues to evolve rapidly. However, a more pressing concern has been the talent shortage. Fewer people are taking the CPA exam, and fewer are entering public accounting. Many are opting for industries like investment banking, which are perceived as more exciting.

But there’s much more to accounting than people realize. Our firm provides a wide range of audit, tax, and consulting services to public and private companies, nonprofits, and individuals. The talent shortage is real, though. We’ve been proactive in trying to change perceptions, promoting our profession, and educating students about the meaningful and rewarding careers available in public accounting. Despite our growth, it has been difficult to find enough qualified talent, especially among recent graduates.

With clients and companies undergoing leadership changes, what role does strategic advisory play today?

The transition of leadership is a major issue. Many smaller firms are owned by a small group of equity partners who haven’t adequately planned for succession. Larger firms — like the Big Four, for instance — have the infrastructure for this. But boutique firms often don’t.

We have about 170 people under the RRBB name; our larger network, Crete, is even bigger. And like others in the industry, we’ve faced the challenge of aging leadership with no clear successors. That’s one reason private equity has entered the space — there’s still value in these firms, but not always the talent pipeline to sustain them.

Traditionally, incoming partners buy into the firm and service existing clients, creating a form of deferred compensation for retiring partners. However, with a generational gap and not enough successors, that model is breaking down.

At RRBB, we’ve made succession planning a top priority. I joined in 2017 from KPMG and was brought in, along with partners like Joe Caplan and others, to help fill that gap. But even with bringing on these partners, we needed support to scale and continue the legacy. That’s one of the reasons why we turned to private equity.

The investment has allowed senior partners to retire while helping us recruit top talent, improve technology, and maintain quality. We now have 27 partners, up from 12, and we continue to acquire other firms facing similar succession challenges. Our goal is to blend legacy with future-focused leadership and give those retiring partners the chance to finally relax on a beach with a margarita.

Focusing more on your expertise, does your audit area include SEC-related work?

Yes, it does. We currently service about 27 public companies, though that number fluctuates. Most are smaller reporting companies. We’re proud of our work and prioritize quality over rapid growth. We don’t take on new clients unless we have the people in place to do the job right. That ties directly into our talent retention strategy.

We have a strong SEC practice, and recently, we welcomed a new partner with extensive experience in this area. Our clients span many industries: life sciences, emerging technologies, manufacturing, and real estate. I consider myself a generalist, but across our firm, we have a wide breadth of expertise.

There are some specialized industries we don’t serve, such as broker-dealers, mining operations, and banks. 

Are there any recent policy or regulatory changes you are watching?

Yes, particularly in the public company space. Our regulator, the Public Company Accounting Oversight Board (PCAOB), was established under the Sarbanes-Oxley Act. Under Chair Erica Williams, the PCAOB has taken a tougher stance on firms of all sizes, issuing more enforcement actions and monetary penalties in an effort to improve audit quality.

Recently, there has been a proposal to eliminate the PCAOB and transfer its authority to the SEC. The PCAOB is a nonprofit but derives its power from the SEC. The thinking is that consolidating regulation under the SEC would streamline oversight and reduce costs, which aligns with the current administration’s conservative and cost-cutting approach.

Interestingly, the PCAOB’s annual budget is around $400 million, while the SEC’s proposed budget increase to absorb these duties is only $100 million. That’s a mismatch, and it raises concerns about whether inspections and oversight will be reduced as a result.

From a private company perspective, a new quality control standard — SQMS — will soon be required. The PCAOB has adopted a parallel standard, QC 1000, with some added provisions. These standards mandate that firms establish scalable quality control policies and standards, covering everything from role responsibilities to continuing education and safeguards to ensure compliance with quality control standards established by our regulators.