Y’s Leadership Group is currently working on plans to centralize its European Council and administration. The purpose of this measure is to enhance cross-border cooperation and improve costs. However, according to locals, projects are not received with equal praise from all partners.
Like other Big Four offices, the EY is organized on a federal model, meaning that each country office of the organization operates relatively financially and institutionally. The advantage of this is that the responsibility for potential corruption in a country does not affect the organization beyond national borders (for example, think about accounting irregularities). One major drawback, however, is the lack of an optimal distribution of money and other resources.
By shifting to the centralized management of the organization in Western Europe, EY aims to function more efficiently and effectively. The new central organization has 25 (but not the UK, Ireland or Scandinavian) EY’s Western European and North African offices, including Germany, France, the Netherlands, Italy and Spain. Overall, these locations employ about 27,000 professionals, earning about $ 7 4.7 billion in annual revenue.
The consolidation plans were initially announced in February, and now, a few months later, the plans are facing internal opposition, the Financial Times reported. The main concern expressed? EY’s partners will have to pay for the costs of the wire card scam in Germany.
According to an insider who spoke to The Financial Times, French partners are “strongly opposed” to the plans.
EY have been auditors for the Munich-based Wirecard for many years, but last year the company went bankrupt, revealing that it had ‘lost’ about $ 1.9 billion on its balance sheet. The scandal is one of Europe’s biggest accounting scams – since then, the German audit supervisor said he suspects EY partners should have known that the 2017 wirecard was “really wrong”.
However, according to an employee involved in the restructuring plan, fears among EY partners are unfounded. “EY is divided into separate law firms in the affected countries,” the spokesman said.
