EY considering options for audit division after spin-off reports
EY confirmed to staff overnight that it is considering options for its audit division, after a report from the Financial Times suggested it was planning to spin out the operation.
The firm, more formally known as Ernst & Young, was considering a carving out of the audit division in response to ongoing criticism levelled at all of the ‘big four’ accounting firms, that their audit divisions lack independence.
According to the FT, which cited “three people with knowledge of the matter”, said the plans would see an audit-centric company separated from the rest of EY, retaining its audit and tax specialists.
On Friday morning, however, Reuters reported that an internal memo penned by EY chief executive Carmine Di Sibio overnight said “no such decisions have been made”.
“With the changing competitive, regulatory and market landscape, work is ongoing to evaluate strategic alternatives,” Di Sibio added.
Reuters quoted an EY spokesperson as saying that the company often looks at its strategic options, and that the current process was only in its early stages.
The spokesperson added that any big changes would go through a consultation process with regulators, after being voted on by partners at EY.
Reporting by Josh White at Sharecast.com.