Accounting firm EY calls off 'Project Everest' to break up firm

Accounting firm EY has called off its plan to break up its auditing and consulting divisions.

The firm, formally known as Ernst & Young, announced it was "stopping work on the project" because its US arm decided to not to move forward.

The Big Four - Deloitte, EY, KPMG and PwC - dominate the global accounting market share.

The plan came as regulators called for major industry reforms over conflicts of interest and poor working practices.

Had the deal - called "Project Everest" internally - gone through, it would have been the biggest shake-up in the accountancy industry for more than two decades.

EY's announcement ends a year-long battle to build internal support to split the units.

"We acknowledge the challenges with separating some of our businesses that have the deepest technical expertise in a way that gives both organisations the capabilities they need to compete in the market effectively," according to an internal note seen by the BBC.

"We also recognise that we need more time to make the necessary investments to prepare the businesses for a separation."

The project cost the firm more than $100m (£80.3m) according to the Wall Street Journal.

Earlier this month, Germany's accounting watchdog fined and banned EY for its handling of audits for Wirecard, the insolvent electronic payment processor.

The company owes creditors almost $4bn, after admitting large sums never existed on its books as part of a global fraud operation.

The ban forbids EY from conducting audits on certain companies for two years.

In 2021, UK regulators called to reduce the dominance of the Big Four after high-profile accounting failures such as Carillion and BHS.