Accounting firm Ernst and Young (EY) has called off its plan to split its audit and consulting units that was announced in September. The overhaul was meant to address regulatory concerns over potential conflicts of interest. The firm’s US Executive Committee, however, is now stopping work on what it had codenamed ‘Project Everest’.
Sources told Business Today that the firm will take the learnings from the past year that can benefit its businesses as well as prepare them for a new transaction. It will continue to work on its blueprint on a possible split.
For now, the firm will continue to focus on its clients, people and businesses to drive long-term value for its stakeholders.
It was always understood that Project Everest was a challenging task, sources said.
EY is planning to host an all-people webcast in the coming weeks, where they are likely to share more information on the development.
One of the Big Four accounting firms, EY reportedly faced resistance to Project Everest from some of its partners. If the split had followed through, it would have been the biggest overhaul in the accounting sector since the collapse of auditor Arthur Andersen in 2002 that reduced the ‘Big Five’ to ‘Big Four’.
The UK auditing and accounting regulator, the Financial Reporting Council, asked the Big Four firms in 2020 to separate auditing as a standalone business in Britain by June 2024.
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