Ernst & Young’s news comes less than a fortnight after PricewaterhouseCoopers announced it was splitting itself into two or more separate businesses, with consultancy services to be separated from audit.
KPMG has also started rolling its consultancy wings across the world into a separate limited liability organisation.
There are a number of different forces behind these moves. The consultancy wings of the big firms have been keen to take equity stakes in internet start-ups, and to find new sources of capital for expansion.
Their partnership with auditors, held back by ethical and regulatory constraints, has made it difficult for them to do this.
At the same time, the US Securities and Exchange Commission, a US watchdog, has been clamping down on audit independence rules with the largest firms, particularly PricewaterhouseCoopers, being the worst hit.
AccountancyAge.com has already analysed the PricewaterhouseCoopers split in detail. News, analysis and comment pieces are brought together in an Accountancy Age.com special which can be found on the home page.
The US watchdog has also forced the loss of another major PwC client, Compaq, details of which are in the practice newswire.
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