The firm, formally known as Ernst & Young, announced they were "stopping work on the project" because its US arm decided not to move forward, BBC reported.
The Big Four - Deloitte, EY,
The plan came as regulators called for major industry reforms over conflict of interest and poor working practices, BBC reported.
Had the deal gone through, it would have been the biggest shake-up in the accounting industry for more than two decades.
Officials initially flagged concerns that the audit arm of the company could not do a fair job for its client who also used its consultancy services. EY's announcement ends a yearlong battle to build internal support to split the units.
"We acknowledge the challenges with separating some of our businesses that have the deepest technical expertise in a way that gives both organisations the capabilities they need to compete in the market effectively," according to an internal note seen by the BBC. "We also recognise that we need more time to make the necessary investments to prepare the businesses for a separation."
The project cost the Big Four more than $100m (£80.3m) according to the
Earlier this month, Germany's accounting watchdog fined and banned EY for its handling of Wirecard's audits, the insolvent electronic payment processor. It owes creditors almost $4bn after admitting a 1.9 never existed on its books as part of a global fraud operation. The ban forbids EY from conducting audits on certain companies for two years, BBC reported.
In 2021, the UK regulators called to reduce the dominance of the Big Four after high-profile accounting failures such as Carillion and British Home Stores (BHS). PwC, the US retail chain's former auditor, was fined a record $8m after signing off accounts the industry watchdog, the Financial Reporting Council (FRC), called "incomplete, inaccurate and misleading" in its report into the aftermath of the collapse, BBC reported.
In the US last year, the
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