EY is to begin letting its partners vote on plans to split its consultancy arm from its audit business by the end of the year, with a view to reaching a final decision by early 2023.
The Big Four accountancy firm has decided to move forward with plans to separate EY into “two distinct, multidisciplinary organizations” by putting the plans to a partner vote.
Any plans to split EY’s advisory business out from its audit segment would have to be approved by the firm’s partners and global regulators to go ahead.
If approved, the separation would come as one of the largest shakeups of the world’s four largest accounting firms in decades.
The plans, which were leaked in May, could allow EY’s consulting arm to reap billion in extra fees by freeing it from the conflicts-of-interest problems that prevent the Big Four from selling advice to audit clients.
It comes as the Big Four face mounting scrutiny from regulators over the potential conflicts-of-interest between their audit and consulting businesses.
“The world is changing, and we have to adapt to continue to thrive and achieve our full potential, while we address the needs of all of our stakeholders,” EY said in a statement.
EY’s UK chair Hywel Ball said: “We believe the creation of two strong, independent businesses would help us to better meet the needs of our clients.”
“We will be working closely with all our stakeholders in the months ahead as we engage in more detail and move towards a partner vote.”
“We are in a very strong period of growth for our business and remain focused on delivering value and quality for our clients and building a successful legacy for future generations.”