1. Ernst & Young
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Ernst & Young (EY)
Ernst & Young Corporate Logo.svg
Type
Member firms have different legal structures, USA and UK: Limited Liability
Partnership
Industry
Professional services
Founded
1989; individual components from 1849
Headquarters
London, United Kingdom[1]
Area served
Worldwide
Key people
Jim Turley (Chairman & CEO)[2] Mark Weinberger (Chairman & CEO-elect)[3]
Services
Assurance
Tax Advisory
Consulting
Financial Advisory
Other
Revenue
Increase US$ 24.4 billion (2012)[4]
Employees
170,000 (2013) [5]
Divisions
Assurance, Advisory, Tax, Transactions
Website
EY.com
Ernst & Young (EY) is one of the largest professional service firms in the world
and one of the "Big Four" accounting firms, along with Deloitte, KPMG and
PricewaterhouseCoopers (PwC).
Ernst & Young is a global organization of member firms with 167,000 employees in
more than 140 countries, headquartered in London, England.[6] It was ranked by

2. Forbes magazine as the eigth-largest private company in the United States in
2011.[7]
Contents
[hide] 1 History 1.1 Early history
1.2 Mergers
1.3 Recent history
2 Global structure
3 Services
4 Name and branding
5 Staff
6 Criticisms 6.1 Equitable life
6.2 Anglo Irish Bank
6.3 Sons of Gwalia
6.4 Akai Holdings
6.5 Lehman Brothers
6.6 Bally Total Fitness
7 Sponsorship 7.1 Sports sponsorship
8 Notable current and former employees 8.1 Business
8.2 Politics and public service
8.3 Other
9 See also
10 References
11 External links
[edit] History
[edit] Early history
EY offices in Warsaw
Ernst & Young is the result of a series of mergers of ancestor organizations.
The oldest originating partnership was founded in 1849 in England as Harding &
Pullein.[8] In that year the firm was joined by Frederick Whinney. He was made a
partner in 1859 and with his sons in the business it was renamed Whinney Smith &
Whinney in 1894.[8]
In 1903, the firm of Ernst & Ernst was established in Cleveland by Alwin C.
Ernst and his brother Theodore and in 1906 Arthur Young & Co. was set up by the
Scotsman Arthur Young in Chicago.[8]
As early as 1924 these American firms allied with prominent British firms, Young
with Broads Paterson & Co. and Ernst with Whinney Smith & Whinney.[8] In 1979
this led to the formation of Anglo-American Ernst & Whinney, creating the fourth
largest accountancy firm in the world.[8] Also in 1979, the European offices of
Arthur Young merged with several large local European firms, which became member
firms of Arthur Young International.
[edit] Mergers
In 1989, the number four firm Ernst & Whinney merged with the then number five,
Arthur Young, on a global basis to create Ernst & Young.[9]
In October 1997, EY announced plans to merge its global practices with KPMG to

3. create the largest professional services organization in the world, coming on
the heels of another 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 difficulty of merging the
two diverse companies and cultures.[10]
EY had built up its consultancy arm heavily during the 1980s and 1990s. The U.S.
Securities and Exchange Commission and members of the investment community began
to raise concerns about potential conflicts of interest between the consulting
and auditing work amongst the Big Five and in May 2000, EY was the first of the
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 company of Cap Gemini Ernst & Young, which was later renamed
Capgemini.[11]
[edit] Recent history
In 2002, EY took over many of the ex-Arthur Andersen practices around the world,
although not those in the UK, China or the Netherlands.[12]
In 2006, EY became the only big four to have two member firms in the United
States with the inclusion of Mitchell & Titus, LLP, the largest minority-owned
accounting firm in the United States.[13][14]
In 2010, EY acquired Terco, the Brazilian member firm of Grant Thornton.[15]
In 2013, EY agreed to pay federal prosecutors $123 million to settle criminal
tax avoidance charges stemming from $2 billion in unpaid taxes from about 200
wealthy individuals advised by four Ernst & Young senior partners between 1999
and 2004.[16]
[edit] Global structure
EY is the most globally managed of the Big Four firms. EY Global sets global
standards and oversees global policy and consistency of service, with client
work being performed by its member firms.
Each EY member country is organised as part of one of four areas.[17] This is
different from other professional services networks which are more centrally
managed.
EY Global Talent Hub in Bangalore, India (A major office in the EMEIA region).
The four areas are:
EMEIA: Europe, Middle East, India and Africa
Americas
Asia-Pacific
Japan
Each area has an identical business structure and one management team that is
led by an Area Managing Partner is part of the Global Executive board. The aim
of this structure is to effectively cater for an increasingly global clientele,
who have multinational interests.
[edit] Services
EY has four main service lines and share of revenues in 2011:[18]
Assurance Services (46%): comprises Financial Audit (core assurance), Financial
Accounting Advisory Services, Fraud Investigation & Dispute Services, and
Climate Change & Sustainability Services.
Tax Services (26%): includes Business Tax Compliance, Human Capital, Customs,

4. Indirect Tax, International Tax Services, Tax Accounting & Risk Advisory
Services, Transaction Tax.
Advisory Services (19%): consisting of four subservice lines: Actuarial, IT Risk
and Assurance, Risk, and Performance Improvement.
Transaction Advisory Services (TAS) (9%): deals with companies' capital agenda –
preserving, optimizing, investing and raising capital.
[edit] Name and branding
The firm's name arises from the global merger between Ernst & Whinney and Arthur
Young in 1989.[8] The motto of the firm is "Quality In Everything We Do".[19]
[edit] Staff
Ernst & Young was ranked No. 1 in the Forbes Magazine's The Best Accounting
Firms to Work For in 2012, claiming that EY treats its employees better than
other big firms.[20]
The firm was ranked No. 1 in BusinessWeek's annual list of Best Places To Launch
a Career for 2008.[21]
The firm was ranked No. 44 in the Fortune list of 100 Best Companies to Work
For, and the highest among the Big Four, for 2009.[22]
Ernst & Young was ranked 4th in Universum's America's Ideal Employers list
2011[23] and 3rd in its Global Top Employers list.[24]
The firm was No. 34 in ComputerWorld's 100 Best Places To Work For In IT for
2009.[25]
The firm was also placed among the top 50 places in the Where Women Want to Work
awards for 2007.[26]
The firm was named as one of the 10 Best Companies for Working Mothers by
Working Mothers magazine in 2006.[27]
In April 2009, Reuters reported that Ernst & Young launched an initiative
encouraging its staff in China to take 40 days of low-pay leave between July
2009 and June 2010. Those who participate get 20 percent of regular salary plus
benefits of full-time employee. It applies to employees in Hong Kong, Macau and
mainland China where the firm employs 8,500 in total.[28]
In early 2012, it was reported that Ernst & Young has 10,000 staff in mainland
China and Hong Kong, which has quadrupled in a decade. It has about 11,200 staff
in the UK.[29]
In 2012, the firm was ranked number 1 in the Stonewall Top 100 Workplace
Equality Index, a list of Britain's top 100 gay-friendly employers. In 2013, the
firm was ranked number 6 in the same Workplace Equality Index. [30]
In the year 2013, Fortune Magazine ranked it among the 100 best companies to
work for.[31]
[edit] Criticisms
[edit] Equitable life
In April 2004, Equitable Life, a UK life assurance company, sued EY after nearly
collapsing following a House of Lords judgement that it had to pay guaranteed
annuities held by its policyholders. Equitable claimed that EY neglected its
duty as auditor and demanded £2.6bn in compensation. Equitable abandoned the
case in September 2005 and each side agreed to pay their own legal costs. EY
described the case as "a scandalous waste of time, money and resources for all
concerned."[32]

5. [edit] Anglo Irish Bank
In January 2009, in the Anglo Irish Bank hidden loans controversy, EY was
criticised by politicians[33] and the shareholders of Anglo Irish Bank for
failing to detect large loans to Sean FitzPatrick, its Chairman, during its
audits. The share price fell by almost 99% and the Irish Government had to
subsequently take full ownership of the Bank.[34][35] The Irish Chartered
Accountants Regulatory Board appointed John Purcell, former comptroller and
auditor general, to investigate into the "circumstances around the issue of
inappropriate directors' loans at Anglo Irish"[36] and into the performance of
its auditors, EY.[37][38] EY said it –fundamentally disagrees– with the decision
to initiate a formal disciplinary process." and that "there has been no adverse
finding made against Ernst & Young in respect of the audit of Anglo Irish Bank."
[39]
[edit] Sons of Gwalia
On 4 September 2009, EY, the former auditors of Sons of Gwalia, agreed to a
$125m settlement over their role in the gold miner–s collapse in 2004. Ferrier
Hodgson, the company's administrator, had claimed EY was negligent over the
accounting of gold and dollar hedging contracts. However, EY said that the
proposed settlement was not an admission of any liability.[40]
[edit] Akai Holdings
On 11 October 2009, EY reached a legal settlement where they agreed to pay
US$200 million to the liquidators of Akai Holdings. It was alleged that EY
falsified court documents to avoid negligence charges which led to police
raiding the Hong Kong office.[41]
[edit] Lehman Brothers
The Valukas Report by bankruptcy court examiner, Anton R. Valukas, issued on 11
March 2010,[42] charged that Lehman Brothers engaged in a practice known as repo
105 and that Ernst & Young, Lehman's auditor, was aware of it. New York
prosecutors, headed by Governor-elect Andrew Cuomo, announced on 21 December
2010[43] that they have sued the firm for fraud charges related to repo 105 and
the collapse of Lehman Brothers. The firm said that its last audit of Lehman
Brothers was for the fiscal year ending 30 November 2007 and that, Lehman–s
financial statements were fairly presented in accordance with Generally Accepted
Accounting Principles (GAAP).[44][45][46]
In 2010 EY, in a letter to the firm's key clients, defended its audit work for
Lehman Brothers.[47] In June 2012 the Accountancy & Actuarial Discipline Board
concluded that no action should be taken against Ernst & Young or any
individuals in connection with the auditing of the Wall Street firm before it
collapsed in September 2008.[48]
[edit] Bally Total Fitness
Following allegations by the Securities and Exchange Commission (SEC) that Ernst
& Young had committed accounting fraud in its work auditing the books of Bally
Total Fitness, Ernst & Young reached two settlements, in 2008 for concerns
related to the period 1997 and 2003 and in 2009 for the period of 2001 to 2003.
The latter settlement included an agreement to cease and desist from violating
securities laws and a fine of $8.5 million which was at the time among the
highest such settlements that an accounting firm had ever paid the SEC.[49]
[edit] Sponsorship
Ernst & Young's publicity activity includes its worldwide Entrepreneur Of The
Year program, run in 50 countries.[50]

6. EY UK also publicizes itself by sponsoring exhibitions of works by famous
artists, such as Cézanne, Picasso, Bonnard, Monet, Rodin and Renoir. The most
recent of these was Maharaja: the Splendour of India's Royal Courts at the
Victoria and Albert Museum.[51]
In addition, EY publicizes itself by sponsoring the educational children's show
Cyberchase on PBS Kids under the PBS Kids GO! television brand, in an effort to
improve mathematics literacy in children.[52]
EY sponsors the ITEM club.[53]
[edit] Sports sponsorship
On 8 September 2011, Rio 2016 made the announcement that Ernst & Young will be a
tier 2 official sponsor of the XXXI Olympic Summer Games to be held in Brazil,
as the exclusive provider of professional services – consulting and auditing –
for Rio 2016 organizing committee.[54] Ernst & Young also has a longstanding
relationship with the 2011 Tour de France winner Cadel Evans.[55]
[edit] Notable current and former employees
[edit] Business
Arthur Blank–co-founder of Home Depot, owner of the Atlanta Falcons
Jim Balsillie–co-CEO of Research In Motion (1992–2012)
Andrew Gould–Chairman and former CEO of Schlumberger (2003–2011)[56]
Ed Grier–Dean of VCU School of Business, Former President of the Disneyland
Resort (2009–present)
Chris Kubasik–COO of Lockheed Martin (2001–2012)
Sean Wise–venture capital commentator
Patricia A. Woertz–CEO of Archer Daniels Midland (2006–present)
Michael T. Strianese–CEO of L-3 Communications (2006–present)
Karan Bilimoria, Baron Bilimoria–Founder of Cobra Beer
[edit] Politics and public service
Jan Peter Balkenende–Prime Minister of the Netherlands (2002–2010)[57]
John B. T. Campbell III–Member of the U.S. House of Representatives
(2005–present)
Jun Choi–Mayor of Edison, New Jersey (2006–present)
Christopher Chope–Member of the British Parliament (1983–92; 1997–present)
Sheila Fraser–Former Auditor General of Canada (2001–2011)
Cheryl Gillan–Member of the British Parliament (1992–present)
Edward H Ntalami–CEO at his Kenyan Capital Markets Authority (2002–present)
John Howell–Member of the British Parliament (2008–present)
Hugo Schiltz–Belgian Senator (1992–1995)
Jeff McWaters–Member of the Virginia State Senate (2010–present)
Tin Pei Ling-Member of Parliament for Marine Parade GRC, Singapore
(2011–present)
[edit] Other
Kimberly Clarice Aiken Miss America 1994
Geneviève Brame – author
Jeff Moss (born c. 1975) founder of the DEF CON and Black Hat technology
conferences and member of the Homeland Security Advisory Council
Joyce Carol Vincent[58] - employee in London, notable for the circumstances of
her unexplained death
[edit] See also
Portal icon Companies portal
Accounting networks and associations
Professional services networks
[edit] References

7. 1.^ "Facts & Figures". Ernst & Young. 30 June 2011. Retrieved 8 December 2011.
2.^ "Ernst & Young: Jim Turley". Ernst & Young. Retrieved 9 July 2011.
3.^ [1]. Ernst & Young. Retrieved 23 April 2013.
4.^ "Ernst & Young". Ernst & Young. Retrieved 2 October 2012.
5.^ Ernst & Young difference: high-performing teams delivering exceptional
client service - Ernst & Young - United States
6.^ "Facts and Figures". Ernst & Young. Retrieved 21 February 2013.
7.^ DeCarlo, Scott; Murphy, Andrea D. (3 November 2011). "America's Largest
Private Companies". Forbes. Retrieved 3 February 2012.
8.^ a b c d e f "Ernst & Young – History". Ernst & Young. Retrieved 9 July 2011.
9.^ "Reports Say Arthur Young and Ernst May Merge". The New York Times. May
1989.
10.^ "Accountancy Merger Off". BBC News. 23 February 1998. Retrieved 9 July
2011.
11.^ "Cap Gemini to Acquire Ernst & Young Consulting Business". The New York
Times. March 2000.
12.^ "Ernst & Young Acquires Anderson India". Findarticles. 8 April 2003.
Retrieved 9 July 2011.
13.^ "Maintaining a Diverse Culture". Ernst & Young. Retrieved 9 July 2011.
14.^ "Mitchell & Titus Joins Ernst & Young Global as a Member Firm". Prnewswire.
Retrieved 9 July 2011.
15.^ Grant Thornton confirms departure of Brazilian member firm Grant Thornton,
3 August 2010
16.^ Bowers, Simon (3 March 2013). "Ernst & Young to pay US regulators $123m
over tax avoidance schemes". The Guardian. Retrieved 23 March 2013.
17.^ "Ernst & Young Consolidates Global Structure". Webcpa. Retrieved 9 July
2011.
18.^ "Facts and Figures". EY Global Review. Retrieved 4 February 2012.
19.^ Ernst & Young Website. Ernst & Young. Retrieved 9 July 2011.
20.^ "The Best Accounting Firms to Work For". Forbes. Retrieved 27 April 2012.
21.^ "BusinessWeek: The Best Places to Launch a Career". BusinessWeek. Retrieved
9 July 2011.
22.^ "Ernst & Young LLP Named to Fortune's '100 Best Companies to Work For' List
for the 12th Year in a Row". Ernst & Young. 21 January 2010. Retrieved 9 July
2011.
23.^ "America's Ideal Employers 2011". Universum.
24.^ "The World's Most Attractive Employers 2010". Universum.
25.^ "100 Best Places to Work For in IT". Computerworld. 26 June 2008. Retrieved
9 July 2011.
26.^ "Where Women Want to Work". The Times. Retrieved 9 July 2011.
27.^ Working Mother
28.^ Chen, George (16 April 2009). "Ernst & Young China Staff to Take Low-Pay
Leave". Reuters.
29.^ Jones, Adam (25 January 2012). "China Headcount to Overtake UK at Top
Firms". Financial Times.
30.^ "Stonewall Workplace Equality Index 2013". Stonewall.
31.^ 100 Best Companies to Work For
32.^ "Equitable Drops High Court Action". BBC News. 2005. Retrieved 26 August
2006.
33.^ "Where Were the Auditors?". Shane Ross. 12 January 2009. Retrieved 9 July
2011.
34.^ "The Cost of Anglo-Irish Bank". The Irish Times. 12 August 2010. Retrieved
9 July 2011.
35.^ "Anglo's board and auditors criticised at egm Shareholders Told Kyle
Swartzlander Owed Bank a Total of –129M in 2007". The Irish Times. 1 January
2009. Retrieved 9 July 2011.
36.^ "Drumm Resigns as Chief Executive of Anglo Irish". The Irish Times. 12
December 2008. Retrieved 9 July 2011.
37.^ "Press Release Further appointments for Purcell". Chartered Accountants
Regulatory Board. 25 March 2009.
38.^ "Accountancy watchdog seeks to widen inquiry into Anglo Irish". 26 March
2009. Retrieved 1 March 2010.
39.^ "E&Y Faces Probe on Anglo Irish Bank Audit". Financial Times. 14 September

8. 2011.
40.^ "Ernst & Young Agrees to $125m Sons of Gwalia Settlement". The West
Australian 4 September 2009. Retrieved 4 September 2009.
41.^ "Ernst & Youngs US$200m snag". South China Morning Post (Hong Kong). 12
October 2009. Retrieved 12 October 2009.
42.^ "Lehman Directors Did Not Breach Duties Examiner Finds". DealBook (blog of
The New York Times). 11 March 2010. Retrieved 9 July 2011.
43.^ "Attorney General Cuomo Sues Ernst & Young for Assisting Lehman Brothers in
Financial Fraud". New York Attorney General. 21 December 2010.
44.^ "Lehman Cooked Books before Collapse, Report Finds". CBS News. 12 March
2010. Retrieved 9 July 2011.
45.^ Court-Appointed Lehman Examiner Unveils Report. DealBook (blog of The New
York Times). 11 March 2010. Retrieved 9 July 2011.
46.^ "Lehman Smoking Gun Leaves E&Y Facing Questions". Accountancy Age.
Retrieved 9 July 2011.
47.^ Ernst & Young defends its Lehman work in letter to clients.
accountingweb.com. Retrieved 30 May 2012.
48.^ Treanor, Jill (22 June 2012). "Lehman Audit Investigator Takes No Action
Against Ernst & Young – Accountant Will Not Be Penalised for Role in Auditing
European Banking Arm of Lehman Brothers, After 18-Month Investigation". The
Guardian. Retrieved 22 August 2012.
49.^ Norris, Floyd (18 December 2009). "Ernst to Pay the S.E.C. $8.5 Million".
The New York Times. Retrieved 21 April 2011.
50.^ "Ernst & Young Entrepreneur of the Year Awards". Ernst & Young. Retrieved 9
July 2011.
51.^ "Maharaja: The Splendour of India's Royal Courts". Victoria and Albert
Museum. 20 July 2009. Retrieved 9 July 2011.
52.^ Cyberchase – PBS Kids Official PBS Kids Website with corporate
sponsorships.
53.^ Ernst & Young Item Club appoints new Chief Economist. Prnewswire.co.uk 16
June 1997. Retrieved 9 July 2011.
54.^ "Rio 2016 Unveils Ernst & Young as Tier 2 Sponsor". Aroundtherings.com.
Retrieved 8 December 2011.
55.^ Ernst & Young renews relationship with Cadel Evans
56.^ "Schlumberger CEO to Retire, Remains as Chairman". Forbes. Retrieved 1
August 2011.[dead link]
57.^ [dead link] (Dutch) "Former Dutch PM to Be Partner in Accountancy Firm".
Bloomberg.
58.^ "Joyce Carol Vincent: How could this young woman lie dead and undiscovered
for almost three years?". The Guardian. 2011-10-09. Retrieved 2013-02-14.
[edit] External links
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