Deloitte, one of the “big four” audit companies, is exploring the possibility of separating global auditing and consulting practices after Ernst & Young (EY), writes The Wall Street Journal, citing informed sources.
According to them, Deloitte sought advice from investment banking specialists at Goldman Sachs Group Inc. (NYSE:GS) after news of a potential separation of EY operations. Goldman and JPMorgan Chase & Co (NYSE:JPM). EY is being advised on a possible restructuring, sources tell the WSJ.
The study of this scenario at Deloitte is at a very early stage, the company has not made specific decisions about the separation at the moment.
Meanwhile, the company itself denies information about the relevant plans. Responding to requests from foreign media, Deloitte called it “categorically wrong.”
“As previously reported, we remain committed to the current business model,” a company representative said.
Earlier, other representatives of the “big Four”, KPMG and PricewaterhouseCoopers (PwC), published statements in support of their current business models, providing consulting services and services in the field of taxation along with audit work.
As reported, EY is considering the possibility of separating the audit and consulting divisions against the background of increased attention of regulators to potential conflicts of interest. As a result of the separation, it is planned to create two large professional companies. Last year, EY’s global revenue amounted to $40 billion, of which $13.6 billion was for audit work.
Regulators around the world have increased concerns about the quality of auditing carried out by accounting companies that are increasingly dependent on sales of consulting and tax services that bring higher margins and greater potential for growth than the audit business.
Securities and Exchange Commission (SEC) The United States is investigating the possibility of a conflict of interest between the Big Four companies and a number of mid-ranking audit firms.
Deloitte in Russia
Deloitte in Russia and Belarus will resume its activities from May 24, but under the new name “Business Solutions and Technologies”. This was stated by the organization itself.
Deloitte, along with many other foreign organizations, began massively suspending their activities on the territory of the Russian Federation and Belarus. Thus, KPMG temporarily left the Russian market in March, in which more than 4.5 thousand people from two countries work in total, In the same month, one of the largest audit and consulting companies PwC also announced the termination of its activities