Update concerning recent developments in our consideration of a proposed split of the EY businesses

EY Japan (headquartered in Chiyoda, Tokyo; Chairperson & CEO: Moriaki Kida), representing all EY member firms in Japan, hereby announces the following in regard to recent developments shared regarding an internal project which aimed to explore the feasibility of splitting our current organization across two large groupings (hereinafter, Project Everest).

We are cognizant of the weight of the expectations placed on our firm as an actor in the accounting and consulting industry, and the role that we are tasked with in ensuring fairness and equity in our capital markets. We engaged in the aforementioned project with twin aims: (1) The conviction that a split of the EY businesses and the resulting separation of the Consulting business and other closely related businesses from the EY member firm network would enable us to generate enhanced audit quality, audit independence and long-term value (LTV) for our clients, regulators and various other stakeholders, particularly when conducted in the interest of better positioning our firm to provide for the social responsibilities we have undertaken; and (2) an unwavering dedication to providing our Partners and team members with additional career and development opportunities generated through the continued growth of the resulting organizations. We remain committed to exploring all possibilities for our organization how doing so can provide our clients with a greater degree of choice.

And although we remain committed to these ideals, in this instance our decision to stop work on the exploration of the possibilities related to Project Everest was made in light of our judgment that the time required to prepare the investments necessary for the proposed split of the EY businesses exceeded our initial projections.

As we move forward, we will act on the lessons learned over this past year of activity to further improve all aspects of our business. Doing so will secure for ourselves capacities to build an ever stronger organization, an aim we have independent of whether a split ever manifests. We continue to be open to the possibility of a split, and as such will continue to investigate and explore ideas such as the optimal structures necessary to provide for the expectations that the market places on our businesses, to enable ourselves to provide better client services, and to ensure that all parts of our organization continue to enjoy competitive edges in service delivery capability. With that said, no matter the nature of any business split we may envision, improving our audit quality will always remain our core priority.

Our focus on EY clients, team members and our society remains true, as does the way that we provide exceptional client services and build long-term value for all of our stakeholders through acting on the EY Purpose: Building a better working world.

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