PracticeConsultingAudit independence rules force world’s largest firm to split

Audit independence rules force world's largest firm to split

PricewaterhouseCoopers today confirmed it is splitting into two or more separate businesses, throwing into jeopardy its position as the world's largest accountancy and professional services firm.

The confirmation, announced in a statement this afternoon, follows mounting speculation that the firm was considering a break-up and moves by the US Securities and Exchange Commission to enforce audit independence rules more strictly.

The proposed restructuring would see the firm’s audit and business advisory services along with the tax practice remain as PwC.

But the management consultancy, business process outsourcing, human resources consulting practices and certain corporate finance activities will be developed into one or more separate businesses.

PwC chief executive James Schiro said: ‘These businesses will be able to seek the financial partners, strategic alliances and joint ventures, and access to capital markets on which their future success will depend – all of which are now largely prohibited by auditor independence requirements. It is expected that these businesses will become several separate entities.’

He added:’Our merger dramatically altered the competitive landscape two and a half years ago. It gave PricewaterhouseCoopers the market leadership and critical mass that are the prerequisites for the comprehensive restructuring we propose to undertake.’

Last November the firm announced it was undertaking a review of its organisation and that it intended to develop a structure to best enable it to ‘maintain the sort of professional independence that is necessary to ensure healthy capital markets.’

PricewaterhouseCoopers denies that reorganisation plans have been finalised

World’s biggest firm considering splitting into three

AccountancyAge.com special: PwC partner forced out of job as US audit clampdown hits UK

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