EY today posted record revenues of $45.4bn (£40bn), on the back of its strongest growth in decades, as partners in the Big Four accounting firm prepare to vote on plans for a global split in what could be the biggest shakeup to audit sector in years.
The accountancy firm saw its combined global revenues surge 16.4 per cent, on the back of bumper sales from EY’s consulting and strategy & transactions businesses, according to EY’s annual report.
Revenues from EY’s consulting segment grew at an “exceptional” rate of 27.1 per cent to $13.9bn, as sales from the firm’s strategy & transactions business grew by a “significant” 25.4 per cent to $5.9bn.
The accounting firm’s audit and assurance revenues grew 8.9 per cent to $14.4bn as revenues from its tax services business increased 10.5 per cent to $11.3bn over the financial year 2022.
The bumper growth in revenues from the accounting firm’s consulting business saw EY grow at its fastest rate in nearly two decades, as it benefited from businesses seeking out advice on managing the volatile economy.
The results come as EY’s partners are set to vote on plans to split the firm in two, with a view to separating its audit segment from its advisory business.
The seperation plans are aimed at boosting EY’s consulting business by letting it work for the accounting firm’s audit clients. EY’s consulting segment is currently blocked from advising the firm’s audit clients due to conflict-of-interest rules.
EY’s Greater China business earlier this month said it will be opting-out of the global separation plans, which require the approval of partners and regulators across each of its local firms.
The accounting firm’s partners are set to start voting over the coming months with a view to completing the balloting process by early 2023.
In a letter accompanying the results, EY’s global chairman and CEO Carmine Di Sibio said forming “two separate, multidisciplinary organisations” will create “better and more dynamic career opportunities” for staff, and increase “access to capital” for the firm.
He said the split would also mean “more choice for clients for both audit and transformation services.”
EY attributed its record performance to the launch of its NextWave transformation strategy in 2019, which has seen the accounting firm seek to bolster its long-term growth.
In 2021, the NextWave strategy saw EY set out plans to invest $10bn over a three-year period. The plan saw EY invest $3.2bn over FY 2022 alone.
Commenting on the results, Di Sibio said: “EY has achieved significant growth and continues to operate from a place of strength.”
“We have tremendous momentum right now, and growth means opportunity – for EY people, clients and broader stakeholders.”
EY is currently the world’s third largest accounting firm, ahead of KPMG, but behind its Big Four rivals, Deloitte and PwC.
The firm posted its strongest growth in the Americas region, as the segment’s revenues surged 19.3 per cent to $21.1bn from the financial year 2021 to FY 2022.
Revenues from EY’s Asia-Pacific business grew 9.3 per cent to $7.3bn while sales from the firm’s EMEIA segment surged 9.2 per cent over the same period of time.
The growth came as EY increased the size of its workforce by 17 per cent over the previous year, to include 365,399 people, as the firm recruited an extra 19,982 people in the EMEIA region, 12,222 in the Americas, 5,950 in the Asia Pacific, and 14,995 in its other offices across the globe.