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EY global follows India footsteps, to rejig global consulting, audit biz units to avoid regulatory flags

“The next steps include ongoing engagement with partners to provide them with more information in advance of the voting process. We expect this phase to continue through the end of the year, with voting expected to begin on a country-by-country basis in late 2022 and conclude in early 2023.”

EY global follows India footsteps, to rejig global consulting, audit biz units to avoid regulatory flags
EY has decided to split its audit and consulting units into two companies. Image: Reuters

Global consulting and audit firm EY has decided to split its two businesses into two distinct, multidisciplinary organisations, following partner votes approving the call. This will separate its audit operations from consulting in certain jurisdictions into two separate organisations. The firm is looking to ease regulatory concerns over potential conflicts of interest. “The next steps include ongoing engagement with partners to provide them with more information in advance of the voting process. We expect this phase to continue through the end of the year, with voting expected to begin on a country-by-country basis in late 2022 and conclude in early 2023,” EY said in a statement.

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Carmine Di Sibio, Global Chairman and CEO, EY, said in a LinkedIn post: “By becoming two strong, standalone organizations we will create an even more focused independent multidisciplinary assurance network with the capability to deliver high-quality audits and serve the public interest. The network will be able to take advantage of new technologies to advance audit quality and provide an enhanced set of services around growing client needs like sustainability and governance, and we will contribute to increased transparency and trust in the capital markets.” The announcement was made on a global call on Thursday evening.

In India, a distinction between audit and non-audit practices already exists with statutory audits being performed by another entity, SRBC & Co LLP. The implications of the global decision for EY’s operations in India is still to be known. During the last few months, Indian audit partners have been assured that in case of a decision on the split, they will be offered full support during the transition period and small teams of tax, forensics and IT will be transferred to the audit firm to help them deliver quality audit services, recent media reports said.

With over 700 office locations in over 150 countries, EY offers services through its four integrated service lines — Assurance, Consulting, Strategy and Transactions, and Tax. As of July 2022, EY has more than 312,250 employees in more than 150 countries around the world. The company had, during the same time, announced 1,033 new partner promotions worldwide.

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