![]() Selling advice on digital consulting and M&A has helped drive the big four’s revenues to record levels, but their advisory arms face competitors that are not constrained by audit conflicts.Īccenture, which became independent from auditor Arthur Andersen in 2000, reported revenues of $US51 billion last year, almost double EY’s advisory sales.ĭespite tightening the sale of advice to audit clients, the big four still face questions over the quality of their audits. “Most non-auditors would love to be free from the independence restrictions on what work we can do,” says one EY partner not involved in the restructuring planning. I imagine that every other firm is looking into too.” Rationale for a break-upįor big four advisory practices, restrictions on working for audit clients are a drag on growth, while investments in audit improvement have sapped capital investment from their consulting businesses. “It’s becoming increasingly difficult for any accounting firm to offer a multidisciplinary service, which includes audit. ![]() “It surprises me that it’s taken this long,” says Fiona Czerniawska, chief executive of consulting sector analyst Source Global Research. Under the plans being drawn up by EY, its business would be split into an audit-focused partnership and a separately owned advisory operation.ĭi Sibio and his most senior colleagues are weighing a historic separation of EY’s audit and advisory businesses after years of criticism over perceived conflicts of interest between the two.Īuditors are tasked with holding companies’ management to account and resisting pressure to sign off on numbers without proper evidence, while their advisory colleagues prefer to keep clients on side to generate fees in areas such as tax, deals and consulting. Sitting aboard EY One, as the Bombardier jet is known within the accounting firm, the auditor was steering a plan to break up the big four that would reshape the oligopoly that has dominated professional services since their rival Arthur Andersen was brought down in 2002 by the collapse of US energy group Enron. When EY’s global chief Carmine Di Sibio boarded the accounting firm’s private jet out of Davos in the early hours of Thursday morning, the Italian-American executive had already embarked on a more daring journey.
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