The plan to separate EY’s auditing services from its faster-growing consulting area has been put on hold after U.S. leaders expressed concerns about how it would affect the tax practice.
This is according to The Wall Street Journal, which reported that Julie Boland, who leads EY in the U.S., said in a partner call Wednesday that the firm was pausing the split to reconsider how the tax practice would be divided, although she still believes in the breakup. The Financial Times initially reported on the delay.
The division of the tax practice between the auditing and consulting areas has turned out to be a sticking point. The Journal reported that nearly a quarter of the firm’s staff work in tax, a lucrative practice that generated $11.4 billion of the firm’s $45 billion in revenue in the last fiscal year.
The dramatic change in the business model for the Big 4 firm had been planned for many months, and the Journal reported that nearly all the 13,000 partners had been assigned to one or the other division. A formal partner vote to approve the split was expected next month though it was six months later than planned. This development further slows progress in the complicated process.