Financial due diligence is so hip right now. It’s right up there with cold plunges and Stanley cups. If only I could figure out a way to get my QoE reports on a shelf in Target and offer collectible editions, I’d be able to retire early (or maybe even afford another Stanley). In the same vein, people are noticing the opportunity to be found as the ETA world continues to pick up steam. With all the money flying around during M&A transactions, people are rushing to get a slice of the pie. That realization brought a wave of people into this space who had no CPA license and no specific background in the work. A lot of times, they were just offering financial due diligence as a way to get their foot in the door so they could then sell bookkeeping and fractional CFO services on the back end. In my humble opinion, that creates a conflict of interest. If the deal goes through, the provider would be more likely to get follow-up work as a bookkeeper or fractional CFO. You can imagine how that might influence the add-back process. In short, non-CPAs who were never qualified to review financials for acquisition purposes started doing exactly that, often as a loss leader for what they were really trying to sell. My Background I cut my teeth at Baker Tilly, which is a competitive enough firm to begin with. But, to even be in the right room for M&A deals, you had to be a CPA with five years of audit experience just to qualify. Even then, only one out of three people who tried actually made it. It’s so competitive because the deals are so large. There was not much margin for error, so you needed technical skills, communication standards, and time management. I’ve carried all these lessons into QOE Prep, especially that last one. Excuse the advertising break, but we consistently get our projects done in two to three weeks. Unlike the Baker Tilly team, the ETA space has no rules about background. On the one hand, leveling the playing field is great for getting more people to participate. On the other hand, we never want to sacrifice standards to do so. As it stands, the AICPA doesn’t set standards for what a quality of earnings report should look like. ETA work deals with private companies, and it’s not an audit. In other words, Uncle Sam doesn’t care enough to set defined procedures. A quality of earnings engagement sits under consulting or analytical services. It is not an audit, and it is not an attestation service. Anyone can call themselves a provider. What’s changing? Based on my observations, in 2025, a lot of smaller businesses started showing less profitability than they had in prior years. Lenders are also getting more cautious and caring more about the year to date trend. When a business is trending up, everybody wins. The lenders get paid back, and SBA loans perform the way they’re supposed to. The BDOs aren’t getting calls about defaulted loans. Last but not least, the buyers are happy because the business they bought is doing what they expected. 2025 was a genuinely hard year to sell a small business. Ask any broker or ask any buyer who tried to get financing. It was rough out there. While there are always many factors involved, a meaningful part of the 2025 SMB struggles comes back to unqualified people performing quality of earnings work. The standards of this level of diligence are not high enough to properly sniff out what’s wrong with a deal before things close. I understand the appeal on the buyer’s side. Buying a business is already a huge investment. Nobody wants to add more costs upfront, especially when there’s a chance that everything falls through. Getting a cheaper QoE might feel like you’re cutting down on your expenses and risk exposure. But as Ben Franklin put it when asked about QoE reports: A penny saved is a bad business earned. When you don’t invest enough in the diligence process for what is likely the biggest investment of your life, you can end up owning a business that becomes more of a liability than an asset. It’s the worst of both worlds because you pay for both the QoE and its fallout. Conclusion Whenever it comes to a service provider in the M&A world, you want someone with real deal experience behind them. I’ve written about finding good brokers and avoiding the charlatans. The same thinking applies to getting a CPA with experience to prepare your quality of earnings report. If you don’t know where to start, I know this one guy out in Lancaster PA who does a great job. If you’re in the midst of making one of the biggest investments of your life, be sure you surround yourself with the right people. Reach out to me, and let’s talk about your deal.