Why EY and its rivals may eventually break up, after all

“WHOEVER SAID don’t question things? We say question everything.” So began the television commercial that EY aired in 2021 during the Super Bowl, a sports extravaganza known as much for its pricey ads as for the American football they interrupt. On April 11th, under a little too much questioning from its American branch, the professional-services giant decided to delay indefinitely plans for a separation of its audit and advisory businesses. A big sticking-point was the division of the tax practice, coveted by both auditors and advisers. Plans to publicly list the advisory business and load it with debt to pay off audit partners also looked cleverer when the deal was conceived in 2021, amid low interest rates and frothy share prices.

This suspension is a huge blow to EY’s global bosses, who underestimated just what an uphill climb “Project Everest”, the unfortunately codenamed break-up project, would prove. To EY’s split-averse professional-services rivals in the so-called “big four”, Deloitte, KPMG and PwC, it looks like vindication. Joe Ucuzoglu, Deloitte’s global chief, insists the “multidisciplinary model” is the “foundation” of his firm’s success. Bill Thomas, his opposite number at KPMG, says his firm’s decision in the early 2000s to list its advisory arm (since regrown) was “not the right thing”. Bob Moritz, who leads PwC, insists keeping the businesses together is central to his firm’s ability to recruit and retain talent.