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Viewsroom

Big four breakup plan, America’s big spenders

Viewsroom

Reuters

News

4.458 Ratings

🗓️ 2 June 2022

⏱️ 16 minutes

🧾️ Download transcript

Summary

EY is considering splitting its audit unit from its fast-growing consulting practice. In this Viewsroom podcast, Breakingviews columnists debate a possible $60 bln valuation and why the plan may create few winners. Also, inflation is creating a murky economic picture stateside. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0

Hear that? It's your big McDonald's hunger calling, because the Big Arch is back, and this time it's here to stay with juicy beef, cheddar cheese and that Big Arch sauce.

0:09.9

Hungry, you are now. Order delivery on the McDonald's app.

0:15.0

Serve from 11am, upcharges and fees apply to delivery orders. Subjects availability, price and participation may vary.

0:20.3

The views expressed on this podcast are those of the participants, not of Roalders' News.

0:27.0

Big Four Split, America's mysterious shoppers.

0:36.2

Welcome back to the Views Room. I'm your host, Amy Donnellan, a columnist of breaking views

0:41.0

coming to you from London. One of the big four accountancy firms could be headed for Splitsville.

0:47.0

Late last week, reports suggested that Ernst & Young, otherwise known as EY, was looking to break

0:52.4

off its audit business from its consulting unit.

0:55.0

It's an interesting idea and one that regulators and governments have long viewed as a means of reducing conflicts of interest

1:01.0

and even avoiding busts like Carillion in Britain and Wirecard in Germany.

1:05.0

The upside for the accountancy giant is creating a consulting business that could be worth $60 billion if it were valued like $198 billion rival Accenture.

1:15.6

Plus, surging inflation is putting a dampening mood on US consumers, but not their spending power.

1:21.6

Bills for restaurants and bars are up 20% and although it would seem that such a rising tide should lift all ships, it turns

1:28.7

out luxury brands like Tiffany and LVMH have more insulation than Walmart and Target. And that's

1:34.4

because the latter's cash-strapped lower-income customers are opting for cheaper items and the

1:39.6

companies are facing rising expenses. First up, my colleague Peter Tall Larson and I chat about EY's plan to hive off its audit practice from its faster growing consulting unit.

1:49.5

Next, Gina Chon is beamed in from Washington, D.C. to talk about the mysteries of America's robust spending power amid rampant inflation.

2:07.2

Welcome back. It's Peter Tharlarsen here in London, joined by Amy Donnellan.

2:13.9

Hi, Amy. Hi, Peter. I've been to chat to you. And to you. And this week, we are talking about big news in the world of professional services, particularly accounting firms, because

2:20.3

EY, one of the big four accounting firms, is apparently considering splitting its audit business

2:27.3

from its consulting practice, which is something that I feel like we have talked about for years,

...

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