Global accounting firm Ernst & Young has canceled plans to split its audit and consulting divisions into two separate operating units.
The proposed split was meant to address regulatory concerns over potential conflicts of interest at Ernst & Young, which is commonly known as “EY.”
The privately held company, which is one of the Big Four global accounting firms, announced plans to separate its audit and consulting units last September after regulators raised concerns about conflicts of interest between the audit and consulting units.
But the plan, code-named “Project Everest,” faced internal resistance at EY and among its partners. The company said its U.S. Executive Committee decided to cancel the split.
Had the split occurred, it would have been the biggest change in the accounting industry since the 2002 collapse of Arthur Andersen, the auditor that was involved in the Enron scandal.
Regulators in the United Kingdom have asked all Big Four accounting firms to separate their auditing units as a standalone business by June 2024. It is not clear how EY, and the other firms, plan to address that request made in Britain.
