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Old 19-08-2022, 01:25 AM
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Another slide states that if there is a split, the auditing arm, AssureCo, will have estimated revenue of $US18 billion and be 100 per cent owned by partners staying in that business, while the consulting arm, NewCo, will have estimated revenue of $US24 billion and be a new corporate entity majority-owned by EY partners moving to the new standalone advisory business.

Not mentioned is how the firm’s existing legal woes will be dealt with. EY’s overseas operations have been at the centre of a string of high-profile audit failures.

EY was the auditor of Wirecard, a German payment processor that filed for insolvency in 2020 after admitting that €1.9 billion of cash on its books probably never existed. EY also audited Luckin Coffee, a Chinese coffee chain that filed for bankruptcy amid allegations its executives inflated income, costs and expenses.

Thoughts? Consulting trying to ditch audit arm to fend for itself. If EY splits up it's consulting arm, the auditors are screwed!
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