Big Four

EY split gets delayed again

EY Luxembourg, which employs around 1,800 people, has its offices in Kirchberg. Library photo: Romain Gamba/Maison Moderne

EY Luxembourg, which employs around 1,800 people, has its offices in Kirchberg. Library photo: Romain Gamba/Maison Moderne

As reported by several media outlets, EY’s plans to split into two--with one side dedicated to audit business and the other focusing on consulting--seem to have been delayed again.

The Financial TimesThe Telegraph and the Wall Street Journal on 8 March reported that the vote amongst EY’s 13,000 worldwide partners on the proposed split, which had been delayed “repeatedly” and had been set to take place in April or May, appears to have been delayed again.

According to the Financial Times, the delay comes after Julie Boland, the US chair and managing partner and Americas managing partner, told partners on 8 March during a meeting that the deal needed to be reworked. The discussion centres around how EY’s tax business would be separated between the two entities. Boland did, however, express a desire to move forward with the split, said the FT.

A statement from EY said, “As part of our deliberation and due diligence in connection with the proposed transaction, we are engaging in a dialogue with the largest EY country member firms to determine the final shape of the transaction. This transaction is complex and will be the road map for reshaping the profession, so it is important we get this right. We remain committed to the strategic rationale that underpins Project Everest and believe that a deal can and should be done.”

Project Everest, announced by the firm in September 2022, is the name of the plan to split EY into two. The split could reduce conflicts of interest between audit and non-audit clients. An argument against the split, however, is that more in-house expertise would bring added value. A decision had been expected in early 2023.

Delano reached out to EY Luxembourg, which reiterated the statement from EY and had no further comment at the time of publication.

EY Luxembourg, which employs around 1,800 people, posted total revenue of €325m for the financial year ending 30 June 2022, which was announced in a press conference that took place 29 November 2022. 61% (€197m) of its revenue came from audit services, while the remaining 39% (€128m) came from advisory, consulting and other non-audit services.