EY chief says it’s still too early to say whether split plan can be rescued
The head of EY’s US business has said it is still too early to say whether the accounting giant’s global split will go ahead in its current form or whether the plan might have to be reworked.
Julie Boland told the Financial Times it would be “premature” to predict whether EY’s current plan to split its audit segment from its consulting business might still be salvaged, after the Big Four firm shelved its push to break itself in two earlier this month.
EY put its plans to separate its audit division from its consulting business on hold following infighting over the future of the accounting firm’s tax division.
The US managing partner has now said it is too early to say whether EY might still push ahead with a separation similar to the one envisioned under its initial ‘Project Everest’ plan, or whether it might have to forge a new, fundamentally different deal.
The split would free the Big Four firm from the conflicts-of-interest rules that block it from selling advice to audit clients.
In explaining the decision to halt progression on the global split, the US exec said EY’s decision to put its separation plans on “pause” will prevent the firm from accruing extra costs.
The global split is set to cost $2.5bn, plus banker’s fees, with EY already having racked up a bill worth hundreds of millions of dollars, the Financial Times reported.
An EY spokesperson said: “As part of our deliberation and due diligence in connection with the proposed transaction, we are engaging in a dialogue with the largest EY country member firms to determine the final shape of the transaction.”
“This transaction is complex and will be the roadmap for re-shaping the profession, so it is important we get this right. We remain committed to the strategic rationale that underpins Project Everest and believe that a deal can and should be done,” the spokesperson added.