Accountant EY scraps plans to split accounting and consulting firms after months of internal bickering
EY has scrapped plans to split its operations after months of internal backlash and disagreement.
The accounting and consulting giant had sought to separate its auditing and consulting businesses in a plan codenamed Project Everest in what would have been the industry’s biggest shakeup in more than two decades.
But partners will be told the plan has been shelved as bosses look at a different strategy, the Financial Times reported.
Break-up plan: Accounting and consulting giant EY had aimed to separate its auditing and consulting businesses in a plan code-named Project Everest
When conceived last year, EY planned to put the split to a vote of its 13,000 partners as early as October 2022.
Proponents argued that it would free both sides of EY from conflict of interest restrictions that prevent it from selling consulting services to its audit clients.
But the plan stalled amid an outbreak of power struggles at the highest levels and now appears to be scrapped permanently.
A major impediment to the plan was EY’s US business, which had been fighting to retain more of its tax and transaction advisory work to support its audit activities.
EY’s president in the US, Julie Boland, called last month for the split to be stopped.
The plans were further complicated when the feud came into the public eye, worrying many of EY’s clients, such as BP, Apple and Google owner Alphabet.
The U-turn is yet another headache for EY as it grapples with the fallout from several scandals.
Last week, the country’s regulator was banned for two years from taking on new publicly traded audit clients in Germany after failures in its work on collapsed payments company Wirecard.
EY is still grappling with the fallout from an exam fraud scandal in the US, which was fined £81 million by regulators last year.