Big four consulting giant Deloitte has come out denying it was considering splitting its business, following media reports.
The Wall Street Journal (WSJ) quoted “people familiar with the matter” after Deloitte reached out to investment bankers Goldman Sachs. Deloitte CEO Punit Renjen said the WSJ report was categorically untrue and it remained committed to its multi-disciplinary model.
This was in the lead up to recent reports that Goldman Sachs along with JPMorgan Chase are advising Ernst & Young (EY) on a possible restructuring, looking at whether it should split its audit and consulting units worldwide.
Among the big four consulting firms including KPMG and PwC, globally, regulators have raised concerns about potential conflicts of interest arising around auditing and advising the same companies, and whether or not this undermines their ability to conduct independent reviews.
What an EY split will actually look like beyond breaking up its audit and consulting units hasn’t been detailed. EY generated US$40 billion in global revenue in 2021 with US$13.6 billion attributed to its audit work.
In order to gain any approval for any potential split up plan, EY will need to win over its 12,000 global partners across 140 countries.
At the time of releasing its results, EY said it was investing US$10 billion into people, technology and quality management systems with US$2.5b invested in technology over the next three years.
EY is placing a strong focus on artificial intelligence (AI), trusted data fabric and disruptive technologies, as well as the wider EY ecosystem of strategic alliances.
It will also build out of the global client technology platform that underpins its services and solutions, which is being used by more than one million EY clients and processes a volume of 250 million transactions daily through the deployment of hybrid and multi-cloud capabilities across 200 countries.
EY also plans to attract technology and data specialists, which currently exceeds 44,000 technologists and 22,000 data professionals – including a neurodivergent engineering team.
The Big Four have been active in the Australia and New Zealand (A/NZ) technology acquisition space in particular, alongside other key markets in Asia Pacific. EY has recently purchased companies such as Blackdot, SecureWorx, Aleron and Open Windows.
Deloitte on the other hand has been spending on companies including Intellify, Entrago, Blended Digital, New Republique, Venntifact, Oracle partner Magia Solutions and Sliced Tech. KPMG has snapped up the likes of Brisbane's Rubicon Red and Certus APAC. While PwC has bought WebSecure.