Ernst & Young is splitting its audit and consulting businesses into two separate units, the firm said on Thursday.
The London based professional services firm is reacting over potential conflicts of interest after being investigated over concerns that its advisory services unit is compromising its ability to conduct independent reviews.
“EY’s strategic review of its businesses has progressed, and EY leaders have reached the decision to move forward with partner votes to separate into two distinct, multidisciplinary organizations,” the firm said.
Ernst & Young is one of the “Big Four” accounting firms, along with Deloitte, KPMG and PricewaterhouseCoopers, who are facing pressure to separate audit and consulting practices and avoid future accounting scandals and business failures.
If the split is ratified, it would be the biggest shake-up in the sector since the 2002 collapse of Arthur Andersen, the disgraced auditor that was involved in the Enron scandal.
Ernst & Young said it would provide its 13,000 partners with more information before voting on the split starts on a country-by-country basis from late 2022.
According to the Financial Times, Ernst & Young is expected to report record global revenues of $45 billion for the past financial year.