Ernst & Young Leaders Expected to Approve Plan to Split Accounting Company
Decision to push ahead with proposal to spin off consulting arm could lead to firm splitting in late 2023
Ernst & Young’s leaders are expected this week to give the green light to splitting its auditing and consulting businesses, paving the way for the biggest shake-up in the accounting profession in more than 20 years, according to people familiar with the matter.
The accounting giant’s global executive committee, which oversees the firm’s 312,000-person worldwide network, met on Labor Day to put the finishing touches to the plan for a worldwide breakup, the people familiar with the matter said. The committee is expected to approve the plan later this week, which will trigger votes on the deal by EY’s roughly 13,000 partners, who stand to make windfalls averaging more than a million dollars each.
The split, penciled in for late next year, would separate EY’s accountants who check the books of companies such as Amazon Inc. from its faster-growing consulting business of advising on technology, deals and other issues.
EY’s move could radically reshape the accounting landscape if it goes to plan, industry watchers said.
An EY spokeswoman said discussions were ongoing and that “at this time, no decision has been made on moving to the next phase.”