EY, the consulting, tax and accounting firm, has given up on the plan it was devising to split up its audit and consulting businesses, after months of consideration.

The Financial Times has reported that internal disagreement and opposition from US executives has marked the discussion of the Big Four firm’s plan, code-named “Project Everest”, which would have been the most significant change in the accounting industry in more than twenty years.

The firm’s global leadership team, which seven months ago said ‘yes’ to an idea apparently now quashed by US partners, has told global partners they would have to go another way.

But there is still a commitment to a split into two companies.

The FT said the plan was seen as a way to free both sides of the business from conflict-of-interest rules that prevent consultants from selling many of their services to a firm’s audit clients.

The report said: “The independent consulting and tax advisory businesses would have been floated on the stock market. Under the break-up plan, consultants would have received shares in the new business worth up to nine times their annual pay, while audit partners would have been handed cash windfalls of up to four times their annual earnings.

“However, leaders of the US firm were unconvinced that cutting EY’s tax business down the middle was wise, and that the remaining audit-focused firm would be financially strong enough to maintain audit quality.

“Julie Boland, who runs the US firm, threw the future of the project into doubt last month by calling a “pause” to planning work.

“The split was first raised internally in 2021 when consulting businesses were experiencing historic growth on the back of a boom in corporate IT projects, due to the pandemic.

“However, consulting company valuations have since tumbled and debt costs have risen, complicating the financial projections EY was using.”

EY was said to have spent hundreds of millions of dollars on Project Everest, with more than 2,000 of its staff engaged in the planning.