EY’s talks on potential split to continue into Autumn
EY’s talks on whether to separate its audit segment from its consulting arm are set to continue into this Autumn – despite initial suggestions the Big Four firm could reach a decision by the end of summer.
The accounting firm’s internal negotiations over plans to split out its advisory business, in an effort to free itself of any conflicts-of-interest issues that prevent it from selling consultancy services to audit clients, will continue over the coming months, Financial News reported.
Earlier reports had signalled EY might have come to a final decision on the split plans before the end of August, as the accounting firm’s senior management sought to push the plans past the line.
However, sources speaking to Financial News said the senior management talks are still ongoing, and will likely continue over the coming months. Any plans would have to receive approval from EY’s partners and international regulators.
EY’s plans to split its firm in two, in what would be the biggest shakeup of the audit sector in decades, were first reported in May.
The Big Four have faced mounting scrutiny over potential conflicts-of-interest between their audit businesses – responsible for ensuring the integrity of companies’ accounts – and their advisory businesses – which sell consultancy services to major firms.
Last month, FRC chief Sir Jon Thompson said an EY split could have “distinct benefits” as he argued a separation could unleash growth by freeing its advisory arm to work with EY’s audit clients.
EY’s global chief executive Carmine Di Sibio previously said a split could allow it to capitalise on up to $10bn worth of Silicon Valley advisory fees.
EY have been approached for comment.