EY has scrapped plans to break up its audit and consulting units to address regulatory concerns over potential conflicts of interest.
In a letter sent to its 13,000 partners worldwide yesterday, EY’s global executive, led by Carmine Di Sibio, the chairman and chief executive, said that senior US partners had “decided not to move forward" with the plan.
In the memo, EY acknowledged the challenges of dividing its consulting and accountancy businesses, including the time needed to make necessary investments preparing both divisions for separation.
It also highlighted the difficulties of splitting the units in a way that gives each “the capabilities” needed to compete in the market.
The firm announced its plans for a split in September after regulators voiced concerns that the audit arm would not do its job fairly for its client if it also employed EY as a consultant.
But the plan, code-named "Project Everest", faced resistance from some of EY's partners.
EY’s global executive, its US executive committee and other member firms will begin taking further steps based on the project’s findings over the past year.
These will be “actions that will both benefit our businesses today and better prepare us for a new transaction,” the firm added.