Business

Upgrading EY Europe worries partners over Wirecard damage


Accounting Group EY should concentrate its strength on the new European executive team, pooling resources in the region, but expressing concern that any financial blow Wirecard scandal can he share?

The overhaul is interrupted by the Big Four corporate business model in an attempt to cut management costs by half, empowering the centralized team to decide on partner pay, according to the people nominated by the program.

Some partners fear that the new structure could lead to the distribution of Wirecard penalties outside the German team that did the work. EYE: audit the payment group a decade before it turned into a fraudulent scandal last year.

“Our French counterparts are ballistic because they say, ‘Why should we pay for the Wirecard mess now?'” Said one of the company ‘s close associates.

Another source close to the issue said that “there is not much transparency” as to whether any of the Wirecard lawsuits or regulatory action would be a financial blow to the sharing of partners in other countries.

However, one EY official involved in setting up the new structure said such concerns were “unfounded”, adding that separate legal entities would be retained in each country. The Big Four traditionally protect themselves from the responsibility that extends to their global business by using separate partnerships in each country where they operate.

In February, EY announced that it was creating a new Europe-West region without giving details about the consequences. The regional group, which includes 27,000 staff և $ 4.7 billion in annual revenue, will include Germany, France, the Netherlands, Italy, Spain and 20 other Western European և North African countries և and is scheduled to launch on 1 July. It does not include the United Kingdom, Ireland or Scandinavia.

Industry leaders say EY և its three main competitors, Deloitte, KPMG և PwC, have thwarted their traditional business model, in which profits and resources are heavily backed by nationally owned companies or small sub-regions.

Under the EY program, business lines such as consulting և M&A consulting will be included in a single income statement. The extent to which the audit and the tax can be combined is limited by the regulations.

Integration will last longer than existing inter-regional payments that reflect work sent from one country partner to another. At the moment, partners in each country invest a small portion of the proceeds to finance general international investments, such as technology and the salaries of international executives.

European leaders will decide on the salaries of partners in each country, although some consultation with local authorities will take place, say people familiar with the programs. In more profitable countries, partners are likely to retain most of their profits.

One of his close colleagues said that it was “a strange time” to reconcile German actions with actions in other countries.

Big Four avalanche of lawsuits in Germany և lost a number of dignitaries customer audit In Europe’s largest economy, including Deutsche Telekom և Commerzbank.

The restructuring of EY, part of the NextWave strategy, which began before the collapse of Wirecard, aims to reduce costs, improve customer service by reducing silo behavior, and allow teams across the country to work seamlessly, the program said.

International integration and staff exchange are especially important during consulting.

“That’s what all these firms are trying to break,” said another former Big Four Firm global executive. “It simply came to our notice then. “If they can deliver it, it’s better for the customers, it’s a competitive advantage.”

The new Europe-West sub-region will replace the three smaller sub-regions to halve management costs, said the person involved in the planning.

EY declined to comment.



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