With so much potential for conflict of interest and scandals, it could be a good idea.
👉 Background: Ernst & Young (AKA EY) is one of the world’s biggest accounting and consulting firms. Since its launch back in 1989, the firm has grown to have over 310,000 employees worldwide.
👉 What happened: EY provides consulting, law, tax and strategy services to other companies, as well as auditing services. But providing both auditing services and other services to the same company is a big conflict-of-interest-no-no.
👉 What else: So now, EY is considering splitting off its audit arm and either listing it on the stock exchange or selling it. This ain't great for staff, who are currently in limbo.
💡 Professional services firms like EY, PwC, Deloitte and KPMG are facing a crossroads as to how to grow their business moving forward.
💡The non-audit side of these big four firms was collectively worth $115 billion last year. The audit side? Just $52 billion. Buuut here's the thing: when the audit side of a firm like EY gets a new client, it becomes tricky for the consulting side of the business to provide services to that same client.
💡It's the same sitch vice versa, by the way. So, by limiting the opportunities for the consulting side of the business, the firm is also limiting its growth opportunities as a whole.
Sign up for Flux and join 100,000 members of the Flux family
