For its part, EY is under particular pressure due to its auditing of collapsed German payments firm Wirecard AG – although it’s not clear that a break-up would rid it of any liabilities arising from that failure. Perhaps EY is preempting tougher regulation.Or perhaps it just sees an opportunity to monetise some of it assets.
A possible split of EY into separate audit and consulting firms must confront the problem faced by all break-ups: How do you create attractive businesses out of both when one is likely to be seen as inferior?
Here, that would be the newly established standalone auditor. EY – or any Big Four accounting firm that attempts such a separation – has its work cut out to make pure-play audit a success.
