EY assessing strategic options to improve audit quality, says CEO
Ernst & Young is weighing options to improve the quality of its audit, chief executive Carmine Di Sibio said in an internal memo seen by Reuters on Thursday, at a time when the Big Four accounting firms are often blamed for their lack of independence.
The memo was sent in response to a report by the Financial Times that the accountancy firm was considering splitting up its audit and consultancy operations worldwide.
“No such decision has been made,” Sibio said in the memo, while referring to media coverage of the spin-off plans. A spokesperson for EY told Reuters the company regularly assesses strategic options, but the process is still in its early stages.
A split, if it were to take place, would create an audit-focused business separate from the rest of the business, but the exact structure of the overhaul remains under discussion, according to the FT report.
London-based EY is one of the big four accountancy firms along with Deloitte LLP, PricewaterhouseCoopers and KPMG that audit companies, which also pay fees for consultancy and consultancy work.
The companies have already drawn criticism from regulators over their conflicts of interest that undermine the ability to conduct independent reviews.
In the United States, the country’s securities regulator is investigating conflicts of interest at the nation’s largest accounting firms, The Wall Street Journal reported in March.
CEO Sibio said in the note to the company’s partners that “with the evolving competitive, regulatory and market landscape, work is underway to evaluate strategic alternatives.”
The EY spokesperson said any meaningful changes would only happen in consultation with regulators and after votes from EY partners.
(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)