EY is reportedly set to create a new Europe West executive team in a bid to cut management costs by half.
According to the Financial Times, the structural overhaul goes against the current federated business model used by the Big Four to protect against liability spreading throughout the entire organisation.
The group announced in February that it was creating a Europe West region, which will include Germany, France, the Netherlands, Italy, Spain, and a number of other European and African countries.
In turn, the FT has reported that concerns have been raised against the pooling strategy in regards to the fallout from the Germany-based Wirecard failure.
One source reportedly told the publication that EY’s French partners held specific concerns, questioning why they should face repercussions for the Wirecard situation.
A second person claimed that there was “not a lot of transparency” on whether the financial and regulatory action would be shared by partners in other countries.
In addition to replacing three smaller subregions with the Europe West region, business lines such as consulting and M&A advice will reportedly be combined into a single income statement. However, any merger between audit and tax will be limited by regulations.
Accountancy Today has contacted EY for further comment.