EY’s partners in the Republic will “most likely” vote on the proposed split of its audit and consulting units into separate entities in the spring of 2023, the Big Four firm’s Irish managing partner, Frank O’Keeffe, has said.
Speaking to The Irish Times, Mr O’Keeffe said 115-120 partners here would be eligible to vote on the plan, which has been devised by EY’s global leadership and would involve about 70 firms potentially splitting their businesses.
“At the moment we are working through all of our partner information documents, we’re working through everything that we need to have right to present to them to make the decision. Then it’s down to them to decide if it’s something we should do in Ireland,” Mr O’Keeffe said.
EY plans to spin off its consulting business into a standalone company, which it would seek to list on the stock market. The firm has said this would fuel faster growth by liberating its consultants and tax advisers from conflict-of-interest rules that prevent them working for audit clients.
“When it comes to our client base, because of independence and conflict rules, we can’t support our clients in every area where they would like us to do that,” Mr O’Keeffe said. “If you look at our audit business, we can’t do consulting work for those clients, rightly so, especially for public interest entities and we audit a significant amount of large global tech companies that we would like to have alliance services and managed services relationships with. From a market perspective it makes huge sense for our clients because it gives them more choice, and then also for us to then collaborate and work with other entities so we can give other clients more choice.
“For other stakeholders, like regulators, they see this in the main... as a positive move forward in the profession. We also believe that we won’t be the only one to do this in the short to medium term but we believe we’ll get there first and it will change the face of professional services.”
As part of the split, the audit side of the firm would retain the EY name with the new consulting business adopting its own brand. Under the plan, the audit arm of EY would receive a payment from the consulting unit at the time of the split.
EY Israel’s partners recently voted not to split and the firm’s affiliate in greater China is also being left out of the plan.
Mr O’Keeffe declined to comment on which entity he might join if the split proceeds here, which might not be until the spring of 2024. “It’s a long way off yet. I’d happily go to either one but at this moment in time none of us in the leadership team is focused on that. We will decide that in due course, post the votes.”
His comments were made as EY published its annual transparency report, which showed that the firm increased its revenues on the island of Ireland by 26 per cent to €536 million in the year to the end of June. EY said it was now the biggest Big Four firm on the island, ahead of Deloitte, KPMG and PwC.
Globally, EY reported revenues of $45.4 billion (€45.5 billion).
Mr O’Keeffe said the revenue growth was driven by double-digit increases across its service lines of assurance, consulting, tax and law, and strategy and transactions.
EY has announced plans to create 900 jobs – 550 experienced hires and 350 graduate roles – across its seven offices on the island, with 20 per cent of those based outside Dublin. Its headcount currently stands at 4,208.
