EY narrows US management race to 3 candidates

Unlock the Editor’s Digest for free

Three candidates are vying to lead EY in the US as the Big Four accounting firm seeks to turn the page on a period of strategic infighting and sluggish growth.

The head of EY’s Americas audit practice, the leader of its financial services business and a veteran tech sector accountant are on a shortlist presented to the firm’s 3,000 US partners, according to people familiar with the matter.

The eventual winner will become arguably the most powerful figure inside EY’s global network, which was thrown into turmoil two years ago when current US leader Julie Boland vetoed a plan to split the firm in two and float its consulting business on the stock market.

Unlike multinational corporations, EY is structured as a network of locally owned partnerships that share a common brand, IT systems and quality standards. The structure has repeatedly led to friction between the US and global bosses, creating intense interest throughout the group over who the US firm will win favour to replace Boland.

Dante D’Egidio, Americas vice-chair for assurance, is regarded by partners as an early frontrunner because he has overseen improvements in audit quality as measured by US regulators in annual inspections.

EY has ranked worst among the Big Four for three consecutive years in the number of deficiencies identified by the Public Company Accounting Oversight Board, but the firm last week said fewer than 10 per cent of audits inspected last year contained flaws, down from 28 per cent a year ago and 46 per cent two years before that.

D’Egidio is joined on the shortlist by Shawn Smith, who was appointed 18 months ago as the head of EY’s financial services organisation in the Americas, overseeing all its work with financial institution clients. The FSO represents a powerful faction inside the group, having spawned its last two global chief executives, including current boss Janet Truncale.

A dark horse is Alex Bender, an assurance partner who runs EY’s audit of telecoms company Verizon Communications and has previously been the lead auditor of Netflix, Facebook and Pinterest, according to PCAOB records.

The all-male short list will be whittled to a single candidate by the governing board of EY US before partners are asked to ratify the choice in the coming months. The winner will take over from Boland when her four-year term expires at the end of June. Boland will hit EY’s mandatory retirement age of 60 next year.

EY on Monday said the governing board was leading the succession process with “rigour, objectivity and transparency”.

The US accounts for about two-fifths of EY’s global revenue and has struggled with a slowdown in demand in consulting, in part because of sluggish mergers and acquisitions activity. It has pushed for the early retirement of some partners and offshored secretarial and human resources jobs in the past year to save costs, said people familiar with the moves.

Revenue growth at EY’s Americas region, dominated by the US firm, was 2.2 per cent in the year to June 2024, compared to 3.8 per cent globally. EY is yet to publish 2025 fiscal year figures.

EY’s global leaders had hoped that splitting the firm in two — a plan dubbed Project Everest — would produce a growth spurt for both halves of the business, because conflict of interest rules currently prevent the consulting arm from entering sales alliances with technology firms audited by the group’s accounting practice. Boland and the US leadership feared the audit business would be weakened by a split and vetoed the plan in April 2023.

Source link