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June 9, 2022

Deloitte denies audit split

By Joe Pickard

Deloitte has denied the possibility of a separation of its audit practice from the rest of its business, following rumours which emerged yesterday.

A spokesperson for Deloitte said that this speculation was ‘categorically untrue’ and that Deloitte remains ‘committed to our current business model’.

Speculation surrounding such splits is perhaps unsurprising, as rumours began to circulate at the end of May that EY is planning to split its audit practice from the rest of its business.

Last month, IAB looked at what a potential EY split would mean for the audit market and found that a separate EY audit practice would still be the 5th largest network in the world with a total fee income of $13.5bn based on FY21 results.

EY commented at the time: As the most globally integrated professional services organization, we regularly conduct scenario planning and review EY businesses on a global basis to determine that we have the optimal strategy, structure and footprint to focus on delivering high quality audits and exceptional service to all clients across EY service lines. 

 “We routinely evaluate strategic options that may further strengthen EY businesses over the long-term. Any significant changes would only happen in consultation with regulators and after votes by EY partners.

In light of the EY rumours, a spokesperson for PwC said: We are fully committed to our strategy which we announced last year and don’t comment on our competitors.  Our view continues to be that access to a wide range of expertise and competencies is essential to serving our clients and all other stakeholders and delivering high quality services. We are always ready to respond to changes in the regulatory and competitive environment if that becomes necessary, but have no plans to change course."

Additionally, in the UK, the government has announced plans to overhaul the UK audit market through legislation which will allow for Financial Reporting Council (FRC) the ability to transition into the more robust Audit, Reporting and Governance Authority (ARGA), along with greater accountability for big business, and action on Big Four dominance.

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