When EY moved into its new headquarters in New York’s Hudson Yards last year, staff looking for a publicity stunt tried to convince global boss Carmine Di Sibio to star in a video scaling the exterior of a nearby skyscraper. But the prospect of dangling from a rope more than 1,200 feet above the ground was too much for Di Sibio, who smiles as he recalls refusing to go along with the plan.

A year later, Di Sibio has embarked on a bold venture of a different kind, plotting a break-up of the Big Four firm’s audit and advisory businesses that would reshape the accounting industry. The plan, codenamed Everest, caught people at EY and its competitors by surprise.

I didn’t see Carmine as a likely instigator of such huge change”

“I was shocked!” says one person who worked with 59-year-old Di Sibio. “He’s an auditor, both by training and temperament . . . I didn’t see Carmine as a likely instigator of such huge change.” After moving from near Napoli in Italy to New York aged three, he became the first in his family to graduate from college and would help his parents to translate mortgage documents and tax forms.

Now Di Sibio is plotting a split that would take his industry “back to the future”, says a senior auditor at a rival firm, recalling the rush by four of the Big Five to spin off their consulting businesses at the turn of the century. That flurry of disposals came as accountants faced pressure to address conflicts of interest between their audit and consulting divisions that were brutally exposed by the collapse of Enron and the US energy group’s auditor, Arthur Andersen.

The surviving Big Four rebuilt their advisory practices in the two decades that followed, but tighter restrictions on selling advice to audit clients have been a drag on growth and have lumbered their consultants with part of the bill for regulatory fines and legal claims over audit failures.

“We’ve invested a lot of money in technology to manage conflicts but as these firms get bigger and bigger, those become harder and harder to manage,” says Di Sibio. That “stunts opportunity”, he says.

The separation, still being debated by EY’s top executives, would strip back the firm’s audit business to its core functions and liberate its consultants to win work from audit clients. It would also put distance between the consultants and the steady stream of scandals that have emanated from the audit division, including Wirecard and NMC Health.

A split would probably involve an IPO of the advisory business but would be unlikely to happen before autumn 2023. Any listing would “most likely” be in the US, says Di Sibio.

The advisory business, dubbed “NewCo” for now, would be 70 per cent owned by the partners. It would have about $25bn of revenues and would aim for strong double-digit percentage growth, says Di Sibio.

A split is “not a defensive move”, because EY does not need more capital, Di Sibio says. But as a corporate entity rather than a partnership, NewCo would be able to raise funds to compete with the likes of Accenture for tech consulting and managed services contracts for companies that want to outsource part of their operations, he adds.

The new company would compete with McKinsey, BCG and Bain on strategy and management consulting as well as with mid-tier tax and transaction advisers that “have been born only because of the conflicts the Big Four had”, says Di Sibio.

The break-up plans incorporate $1.5bn in cost cuts, including the axing of “middle layers” of management as the advisory business shifts from a network of national partnerships to a single company, says Di Sibio. “We don’t envision a lot of job cuts,” he says, adding that some partners in management roles would be pushed back into client work.

Di Sibio says he wants to emulate Goldman Sachs, a former client and now an adviser to EY on its separation planning, by keeping a partnership culture in the advisory business. Like Goldman, he wants to keep promoting partners, though possibly every two years instead of the current annual process.

A spin-off would hand multimillion dollar windfalls to partners — cash for the auditors and shares in the new venture for the consultants.

Competitors are refusing to follow suit. KPMG boss Bill Thomas told his partners that selling its consulting businesses would “monetise the goodwill of our firm that has been created for over a hundred years, at the expense of the next generation”.

“This has happened before, so it’s not 100 years,” says Di Sibio, his voice rising when asked for his reaction. “There will be more and more opportunity to make partner over the next couple of years,” he says, pointing to the demand for new partners to win new business previously blocked by conflicts.

Alternatives to an IPO are still on the table — including a “strategic buyer” that could use a deal to become “a major player” in professional services, says Di Sibio. Private equity firms are also interested in taking a stake but EY’s size means “it would have to be a consortium”, he adds.

Rivals say a split would leave behind a “boring”, low growth audit firm that would not have the expertise required to check the accounts of complex multinationals but Di Sibio disagrees. Initially, auditing would account for about 70 per cent of the business, with the rest consisting of tax and accounting advisers as well as EY’s fast-growing sustainability practice.

The audit business, dubbed “AssureCo” in EY’s plans, will start with revenues of $18bn and have “very aggressive growth projections” of 7 per cent per year, he says. Revenues in EY’s audit arm grew by a total of 27 per cent in the nine years to 2021 compared with 93 per cent growth in tax and advisory.

Di Sibio says the audit business would increase its market share if it did not have to worry about consulting conflicts. Rebuilding the firm’s advisory capabilities will also drive growth after non-compete restrictions expire, he says.

Rivals say combining audit and consulting is crucial to attracting staff. Di Sibio counters that the opportunity to build new consulting divisions will make the independent audit business more attractive to work for, recalling his own time building a regulatory advisory unit after the $11bn disposal of EY’s then consulting practice to Capgemini in 2000.

When he was appointed as EY’s chair and chief executive in 2019, some colleagues saw Di Sibio as a “caretaker”.

Current and former colleagues say Di Sibio, though rarely excitable, is a master of building consensus. One recalls “huge games of rock-paper-scissors” he used as an icebreaker at a meeting of EY’s roughly 120 most senior partners.

But his gregarious exterior masks a ferocious work ethic and toughness, the colleagues add. “You need to have balls of steel to do that job,” says a former colleague.

Before Di Sibio can try to convince EY’s 13,000 partners to back the split, he must first win the agreement of its top executives, a process he hopes will conclude in a “couple of weeks”.

If he pulls off the biggest shake-up of a Big Four firm in a generation, the caretaker moniker will be shed for good.