The vote is expected to last until the end of the year. But its outcome will be scrutinised by every major firm on the planet. It could be a very good deal for EY to get ahead of the likely regulatory requirements and benefit from the "first-mover advantage".

EY's global management has taken the decision to "take forward a plan to separate into two separate organisations", according to a press release issued by EY Luxembourg on 8 September. As a result, EY's international network of member firms envisages, on the one hand, a global network centred around its assurance business - audit - and, on the other hand, a new global entity bringing together advisory, strategy and transaction activities - consulting. It is also intended that the legal and tax businesses will be integrated into the new advisory business.

A decision by January 2023

The next step in this process will be a vote by the partners of EY's global network of member firms. Only at the end of this stage will it be decided whether the proposed demerger of the consulting and auditing businesses will become a reality. A decision is not expected before the beginning of 2023.

In the event that the separation is decided, it will be the turn of each member entity of the network to analyse the impact of such a decision. For EY Luxembourg, this could take several months.

The service lines will have to be redesigned according to whether they are audit or consulting. This should not be a difficult exercise for most teams, as the definition is already clear. On the other hand, some service lines are as much audit as consultancy.

The specificities of the Luxembourg market

For EY Luxembourg, audit activities related to the investment fund industry are a specificity of the local market. This makes EY Luxembourg different from its sister entities in Belgium, Germany or France, for example.

However, the most important impact could materialise at the level of the central services, in this case support activities, such as IT, marketing and communication. At the global network level, however, it would appear that these activities are mainly concentrated in the US and the UK.

The impact on staff is expected to be limited. Whether staff work for an audit or advisory service line, they remain attached to the EY brand.