The big four giant is reevaluating its relationship with Sidat hyder which means that there is a possibility that EY will sever its ties with its local partner. Rumors of this happening have been circulating in the industry since January there is apparently cause of alarm amongst accountants and partners at the local affiliates of the global big four accounting firm. The reason for all these rumors are because of the results of an internal compliance audit of Ford Rhodes Sidat Hyder by Ernst and Youngs global offices. The compliance audit found significant deficiencies within the practices of Ford Rhodes Sidat Hyder and have thus caused the reevaluation to begin.
The exact reasons that caused the audit firm to reconsider are still unknown and insiders have declined to provide details on what exactly has happened to cause E&Y to reconsider. However the unwillingness of anyone to specifically state what the problem is was unsurprising as big audit firms like these value integrity over everything.
Whatever the issue may have been there are signs that the problem has been festering for some time and had remained obscured from the view of the global partnership in large part owing to Pakistan (Karachi’s) poor security situation. The annual compliance audits were not typically conducted by randomly assigned partners at the firm but specifically by Pakistani accountants working out of the EY offices in the UAE. This meant that many of these officers that had previously worked at the offices of E&Y would tip off their colleagues on the scope of the incoming audit which let ford Rhodes paper over their deficiencies. However, post 2018 E&Y was comfortable sending non-Pakistanis to do the audit which didn’t give ford Rhodes enough time to cover over their deficiencies. This has ended up in difficult conversations taking place and senior management being kept in the dark of many practices.