Ernst & Young (EY) is considering a split of its audit and advisory operations worldwide, the Financial Times has reported.
The spinoff will create an audit-focused firm separate from the rest of the business, a move that is considered a major shake-up of one the “big four” accounting firms. Deloitte, PricewaterhouseCoopers (PwC) and KPMG are the other three audits companies which practically control the global consulting and advisory landscape.
Citing people familiar with the plan, the London based newspaper said the exact structure of the shake-up remains under discussion.
After the Financial Times news broke Reuters reported on an internal memo sent by EY CEO Carmine Di Sibio where he said his company was evaluating options to improve their audit quality. “No such decisions have been made,” Sibio noted. He also said to EY’s partners that “work is ongoing to evaluate strategic alternatives”.
An EY spokesperson also quoted by Reuters said the firm routinely evaluates strategic options.
The big four have been under scrutiny accused of a lack of independence when auditing companies, since they also earn millions of dollars of fees from consulting, tax and deal advisory work working for them.