EY Taiwan, the local branch of global accounting firm Ernst & Young, yesterday said it would not take part in plans to break the firm into two entities, but would continue to offer multidisciplinary professional services based on its existing organizational structure.
The announcement came after Ernst & Young’s top leaders reached an agreement to advance plans to create a US$20 billion audit firm and a separate publicly traded consulting business with an estimated value of US$100 billion.
More than 13,000 partners worldwide would have the final say on whether the firm should become two distinct, multidisciplinary organizations. Voting is slated to begin late this year and extend into next year, it said.
Photo: Reuters
“We are unable to participate in the separation as proposed by EY Global at this juncture, considering the business environment and development stage within which we operate,” EY Taiwan said, adding that member firms are locally owned and managed by separate entities.
EY Taiwan said it has been providing professional services in the local market for more than 53 years and is proud of its legacy.
Decoupling EY’s consulting arm from its audit practice would give the firm an advantage over competitors and secure a larger market share, EY Global said after a strategic business review.
It would address pressure from regulators, from the US to India, to keep audit and advisory clients separate and avoid conflicts of interest that could undermine corporate financial reporting.
As all member firms in the EY global network operate in distinct markets and regulatory landscapes, individual member firms can decide whether to participate in the separation pursuant to its governance processes, the local office said.
EY Taiwan said it would continue to be a member firm of the EY global network and integrate its global resources to serve local clients.
“We will stay true to our commitment to be the most trusted professional services organization, and help drive sustainable growth with best-in-class talent, innovation, entrepreneurship and corporate responsibility,” it said.
EY Global leadership has been working on a restructuring strategy since November last year. If completed, the move would represent one of the largest shake-ups in the accounting industry.
Such a separation would allow audit and consulting businesses to compete freely for work and unshackle them from strict limits in the US and elsewhere on the types of advisory services that firms can provide to audit clients, EY Global said.
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