The FT noted this morning that:
EY has scrapped plans to break up its audit and consulting businesses after months of internal disagreement and opposition from executives in the US.
They added:
The Big Four firm's plan, codenamed Project Everest, would have represented the biggest shake-up to the accounting industry in more than two decades.
Let's put this another way, as I have done to quote a number of journalists since this episode began. It was all about the consultants being free from the risk of the auditors and about both wanting to quote their businesses to take maximum cash now in case the whole Big 4 audit firm edifice collapsed.
As it is, a firm that likes to think it can advise on strategy proved that it was unable to develop a workable plan for itself, with the net consequence being a massive loss of face amidst internal strife that will remain for the rest of the working lives of those involved.
EY might have come up with a better plan for destroying its brand's value than this failed demerger, but it is hard to work out how.
In the meantime, the mess that auditing is in continues.
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What goes around comes around… these debates are decades old!! I wonder if other firms will attempt to follow suit or abandon the attempt after this debacle?
I’m no expert on these matters but auditing seems to have been destroyed by the very forces it was supposedly developed to keep in check.
The first being greed.
I mean, who is actually keeping an eye on these matters? It’s more like the Klondike than a rational system.
Oh! no poll!!! No worries, just like the idea of “casting my vote” and “being heard” since no b****er else does. 🙂
Sorry…
…. though since writing that (about there being no poll) it’s also become clear that having a poll sometimes is better than all the time.
Do please ignore.
I think occasional use is best
Chartered Accountants, Johnston Carmichael LLC, quitting as auditors of the Scottish National Party is currently ‘talk o’ ra steamie’ as we say in Glasgow (‘hot gossip’ to posh people). Seems the firm had a review of their client portfolio last September but nobody in the SNP thought to make that resignation public knowledge. From my reading of ‘Standing on Quicksand’ (article linked below) it would appear that Johnston Carmichael LLC acted honourably & timeously… as far as could be within their regulatory constraints. Your proposal for ‘other stakeholders’ to be considered by the accountancy profession may have averted this crisis. Now, everybody’s comments are constrained because the likely cause of those auditors dumping SNP as a client is subject to investigation by Police Scotland.
https://wingsoverscotland.com/standing-on-quicksand/#more-136909
i would have thought you would have been in favour of a pure audit firm with no conflicts…….. as has been discussed on here many times before, a pure audit only business is not profitable enough to support itself, and thats what EY discovered when they attempted to cut the business up – they wanted more of the tax practice to try and support the audit business, most of the tax business wanted to go with consulting – speaking as an ey tax partner.
I am in favour of a pure audit firm
But EY were nowhere near offering that because the audit partners would not tolerate it so the plan fa8led