The Big Four accounting firms, PWC, Deloitte, KPMG and EY, will be split up on a world wide basis over the next two years. This has all started by the moves by the UK government to address recent scandals concerning the auditing of financial statements at public companies.
In the UK, the Big Four have until June 2024 to separate their audit and consulting businesses in the UK. This is forcing the Big Four management to address this change in business model on a global basis.
This is a replay of the financial auditing crisis that lead to the passage of Sarbanes-Oxley. Back in 2002 the collapsed in the United States of Enron, World Com, Health South and others lead to three of the remaining major accounting firms to send their consulting operations packing to improve their independence. Deloitte was the only firm to keep their consulting practice. All the Big Four ultimately ended up rebuilding their consulting firms again.
It is time for all organizations to re-look at their external auditor needs and make some informed selections concerning audit services.