Ernst & Young

Ernst & Young is one of the largest professional services firms in the world, and a Big 4 accountancy firm, along with PricewaterhouseCoopers (PwC), Deloitte Touche Tohmatsu (Deloitte) and KPMG.

History

The firm as we know it today is the result of a series of mergers of ancestor organizations. The oldest originating company was founded in 1849 in England as Harding & Pullein. In that year the company was joined by the American Frederick Whinney. He was made a partner in 1859 and with his sons in the business it was renamed Whinney, Smith & Whinney in 1894. In 1903, the firm of Ernst & Ernst was established in Cleveland by Alwin and Theodore Ernst and in 1906 Arthur Young & Company was set up in Chicago.

In 1965, Whinney, Smith & Whinney merged with Brown, Fleming & Murray to form an accounting and consultancy firm named Whinney Murray. Whinney, Smith & Whinney had been closely allied with Ernst & Ernst since the 1940s, and in 1979 Whinney Murray, Ernst & Ernst, and Turquands Barton Mayhew joined together as Ernst & Whinney, creating the fourth largest accountancy firm in the world. In 1989, the number four merged with the then number five, Arthur Young, to create Ernst & Young ("EY").

The firm has its global headquarters in London, UK, and New York. EY is led by James S. Turley.

EY currently has about 5,000 staff in China, and hopes to have 15,000-20,000 people in the next decade.

Service lines

EY has three main service lines:

Assurance and Advisory Business Services. Globally, EY has the highest revenues of the Big Four in this area and this service line accounts for 70% of its revenues. This comprises Audit, Risk Advisory Services, and Finance & Performance Management services.

Tax Services

Transaction Advisory Services

Acquisitions and divestitures

In October 1997, EY announced plans to merge their global practices with KPMG to create the largest professional services organization in the world, coming on the heels of another mega-merger plan announced in September 1997 by Price Waterhouse and Coopers & Lybrand. The merger plans were abandoned in February 1998 due to client opposition, antitrust issues, cost problems and perceived difficulty of merging the two diverse companies and cultures.

The partnership built up its consultancy arm heavily during the 1980s and 90s. The U.S. Securities and Exchange Commission and members of the investment community began to raise increasing concerns about potential conflicts of interest between the consulting and auditing work. In May 2000, EY was the first of the Big Four firms to formally and fully separate its consulting practices via a sale to the French IT services company Cap Gemini for $11 billion, largely in stock, creating the new consulting firm of Cap Gemini Ernst & Young, which was later renamed Capgemini.

In 2002, EY merged with most of the ex-Arthur Andersen practices around the world, although notably not those in the USA or UK. This allowed EY to grow its global revenues by over 30% in that year, closing the gap with PwC.

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Significant audit clients

EY is the auditor for a large number of major global corporations, including the following:

Retail & Consumer Products: Wal-Mart, Target, Coke, Marriott, Amazon.com, McDonalds, eBay Next, Intercontinental Hotels, Hilton, Starwood
Travel: American Airlines, Delta Air Lines, Northwest Airlines, British Airways, Singapore Airlines, China Airlines
Technology: Oracle, Sun Microsystems, Google, Intel, Hewlett-Packard, Baidu
Media: Time Warner, EMI, Vivendi Universal, Warner Music, News Corporation, ntl:Telewest
Telecoms: Verizon, Telefonica, AT&T, Global Crossing, Telstra, France Telecom, Orange
Energy: BP, Total, ConocoPhillips, Kazakhmys, Xstrata, CNOOC
Industrial Products: LVMH, Lafarge, Thales Group, Hanson, FedEx, Eli Lilly, Porsche
Financial Services: UBS, Piper Jaffray, Aviva, Lehman Brothers, ABN AMRO, Société Générale, ICBC
Real Estate: Emaar, Nakheel, Cushman & Wakefield, Westfield Group, Mapeley Plc, Brixton Plc, Hines
Government: Royal Mail

Publicity

EY is famous for its worldwide Entrepreneur of the Year program, run in 35 countries ^*. Previous Entrepreneur Of The Year winners include Jeff Bezos of Amazon.com, Pierre Omidyar of eBay, Sergey Brin and Larry Page of Google, Howard Schultz of Starbucks, Catherine L. Hughes and Alfred Liggins of Radio One, and Jim McCann of 1-800-Flowers.com.

EY UK is also famous for sponsoring big name art exhibitions, eg Cezanne, Picasso, Bonnard and Monet in the 20th Century. This year's exhibition ^* will be Rodin at the Royal Academy of Arts. Ernst & Young UK is based at More London

EY Australia has recently added to the city skylines of Sydney and Melbourne moving into new offices at the Latitude (building) Sydney and in Exhibition Street, Melbourne.

Of recent note, EY has been involved in some minor scandals involving laptops containing customer information that have been stolen from employees.

Diversity

EY's global culture and PeopleFirst policy emphasizes diversity.

In the US, minorities make up 24% of its workforce, up from 16% in 1996. The firm's nondiscrimination policy now includes gender identity. The firm is consistently named as one of the 100 Best Companies To Work For (and the highest among the Big Four) by Fortune Magazine. The firm was also named as one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.

In the UK, EY has the highest proportion of women partners amongst the Big Four (17%), and the firm is taking visible action to improve the proportion of ethnic minorities in senior positions.

External links