EY has decided to drop its split plan

Big four accountancy firm EY has called off its plan to split its auditing and consulting divisions.

The firm, formally known as Ernst & Young, announced the planned carve-up, Project Everest, last summer but now says it will no longer work on the project after its US arm vetoed the move.

The decision does not come as a surprise amid speculation in recent weeks that there was a lack of support for the plan from partners, especially those in the US.

It is understood there have been disputes over allocation of roles business and how big the payouts should be for partners left in the audit business.

There was talk of the consulting division seeking stock market listing, but a downturn in valuations has put a block on that idea.

Regulators have called for major industry reforms over conflicts of interest and poor auditing on some high profile accounts such as Carillion and Bhs. In 2021, they called for the dominance of the Big Four to be diluted.

Project Everest is estimated to have cost EY more than $100m (£80.3m) according to the Wall Street Journal.