Big Four accounting giant EY calls off plan to split its audit and consulting units after partners fail to reach consensus
- The plan, codenamed Project Everest, faced resistance from the firm’s US affiliate
- EY’s leaders said that the rationale behind the carve-out plan remains strong and that they are still committed to creating two world-class organisations
EY’s top leaders called off a planned breakup of the firm’s consulting and audit practices after the US affiliate decided not to take part, disrupting a nearly year-long struggle to build consensus for the historic shakeup of the Big Four accounting firm.
Leaders told partners on Tuesday that they planned to continue laying the groundwork for a possible split, but that more time and investments were needed to make that a reality.
The firm intended to spin off its consulting business and much of its tax practice into a stand-alone public company. But the plan, known as Project Everest, suffered repeated setbacks as partners disagreed over compensation and the resources needed to staff the remaining audit practice – a key sticking point for leaders of EY’s US affiliate.
“Given the strategic importance of the US member firm to Project Everest, we are stopping work on the project,” the firm said in a statement.
The breakup plan had long been on shaky ground, but its demise came quickly.
Just two weeks ago US and global leaders said they were still working to resolve differences over key aspects of the deal, including how to staff the audit practice and how to divide the tax practice. The impasse pitted Julie Boland, chair of EY US and who was picked to run the legacy audit practice, against Carmine Di Sibio, who chairs EY’s global arm and was set to run the stand-alone consulting business.