Ernst & Young
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| Ernst & Young | |
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| Type | Member firms have different legal structures, USA and UK: Limited Liability Partnership |
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| Founded | 1989; individual components from 1849 |
| Headquarters | New York, New York US Firm, London, UK, EY Global |
| Industry | Professional services |
| Products | Accounting Professional advisory services |
| Revenue |  $18.4 billion USD (2006) |
| Employees | 114,000 |
| Slogan | Quality in everything we do |
| Website | www.ey.com |
Ernst & Young is one of the largest professional services firms in the world, and one of the Big Four auditors, along with PricewaterhouseCoopers (PwC), Deloitte Touche Tohmatsu (Deloitte) and KPMG. Ernst & Young is a global organization consisting of many member firms.
Ernst & Young Global is based in London and the firm has its US headquarters at 5 Times Square, New York, NY.[1]
Contents |
[edit] History
[edit] America and UK
The company 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 by the Scotsman Arthur Young in Chicago.
As early as 1924 these American firms allied with prominent British firms. Young with Broads Paterson & Co., and Ernst with Whinney Smith and Whinney. In 1979 this led to the formation of anglo-american 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").
[edit] Rest of the world
EY ancestor firms opened offices around the world in order to service their international clients. In 1979 the European offices of Arthur Young joined several large local European firms, which themselves became member firms of Arthur Young International. The big merger in 1989, creating Ernst & Young, was effected by mergers between Ernst & Whinney offices and Arthur Young member firms in all countries involved.
EY has about 5,000 staff in China.
[edit] Globalisation
The firm is currently undergoing a process of globalisation. Each member country in EY Global is now part of an Area. There are seven Areas:
- Americas
- Northern Europe, Middle East, India & Africa
- Central & Eastern Europe
- Continental Western Europe
- Far East, Oceania and Japan
Each Area has a single management team that is lead by an Area Managing Partner who sits on the Global Executive. All Areas are currently integrating their business models, including partner pay.
[edit] 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 accounts for 65% of its revenues. This comprises assurance (audit), risk, advisory services and business advisory service.
- Tax Advisory Services
- Transaction Advisory Services
[edit] 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 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.
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 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. Recently, Ernst & Young has started building a significant finance & performance management advisory services practice.
In 2002, EY merged with most of the ex-Arthur Andersen practices around the world, although not those in the USA, UK or the Netherlands.
[edit] Significant audit clients
EY is the auditor for major global corporations, including the following (as verified by their annual reports):
- Energy: Atmos Energy, BP, CNOOC, ConocoPhillips, Gazprom, Kazakhmys, Total, Westinghouse Electric Corporation, Xstrata
- Financial Services: ABN AMRO, Aviva, Bank of New York, ICBC, ING Group, Lehman Brothers, Piper Jaffray, Société Générale, TD, UBS, US Bank , SunTrust Bank, Regions Financial Corp, Unum Provident
- Government: Royal Mail, Department of Immigration and Citizenship, Royal Australian Mint
- Healthcare: HCA, Caremark, Lifepoint
- Industrial Products: Delphi Corporation, Eaton Corporation, Eli Lilly, Hanson, Lafarge, LVMH, Porsche, Thales Group, Allegheny Technologies
- Media: EMI, News Corporation, ntl:Telewest, Time Warner, Warner Music, Vivendi Universal
- Real Estate: Brixton Plc, Cushman & Wakefield, Emaar, Mapeley Plc, Nakheel, Westfield Group
- Retail & Consumer Products: Amazon.com, Hilton, Intercontinental Hotels, Marriott, McDonalds, Next, Starwood, Target, Coke, Wal-Mart, AutoZone, Chico's, Dollar General
- Technology: AMD, Baidu, Google, Hewlett-Packard, Intel, Oracle, Sun Microsystems, Research in Motion
- Telecoms: AT&T, France Telecom, Global Crossing, Orange, Telefonica, Telenor, Telstra, Verizon
- Travel/Transportation: American Airlines, British Airways, China Airlines, Delta Air Lines, JetBlue Airways, Northwest Airlines, Pinnacle Airlines, Scania, Singapore Airlines, Southwest Airlines, FedEx
[edit] Publicity
Ernst & Young's publicity activity includes its worldwide Entrepreneur of the Year program, run in 35 countries.[2] 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 also publicizes itself by sponsoring big name art exhibitions, eg Cezanne, Picasso, Bonnard and Monet. This year's exhibition will be Rodin at the Royal Academy of Arts.[3] Ernst & Young UK is based at More London.
EY Netherlands is Partner in Sport of NOC-NSF, the Dutch Olympic Committee. The sponsoring includes advice to top sport professionals as well as national and local sports associations and clubs.
EY Australia recently moved into new offices in Sydney and Melbourne at the World Square (building) Sydney and in Exhibition Street, Melbourne.
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 £4bn in compensation. Equitable abandoned the case in September 2005 and paid EY's legal costs. EY described the case as "a scandalous waste of time, money and resources for all concerned."[4]
[edit] Ratings from interest groups
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 was also named as one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.
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. In January 2007, Ernst & Young moved up to #25 from its previous ranking of #67; it has been on the list for 9 consecutive years. Employee satisfaction polls are responsible for over 60% of the ratings.
In the UK, EY has the highest proportion of women partners amongst the "Big Four" (15%), and the firm claims it is taking visible action to improve the proportion of ethnic minorities in senior positions. It recently appointed a senior partner to lead its diversity efforts and won a place in the 2006 Top 50 Places Where Women Want to Work awards [2]
[edit] Notable current and former employees
[edit] Business
- Karan Bilimoria, Baron Bilimoria - founder of Cobra Beer
- Andrew Gould - chairman and CEO of Schlumberger (2003-present)
- Ed Grier - president of the Disneyland Resort (2006-present)
- Chris Kubasik - CFO of Lockheed Martin (2001-present)
- Sean Wise - venture capital commentator
- Patricia A. Woertz - CEO of Archer Daniels Midland (2006-present)
- Clemens Wohlmuth - chairman and CEO of Czech On Line (2006-present)
- William Rhodes - chairman and CEO of AutoZone (2006-present)
- Jim Cantalupo - former CEO of McDonalds (1991-2004)
- David Sambol - President and COO of Countrywide Financial Corporation (Ernst & Whinney)
- Jessica Perna - Mayor of Bloomfield, NJ Tax Professional
[edit] Politics and public service
- John Campbell - 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)
- Gerard Ee - President of the Singaporean National Council of Social Service
- Sheila Fraser - Auditor General of Canada (2001-present)
- Cheryl Gillan - Member of the British Parliament (1992-present)
- George McCarthy - Chief Secretary of the Cayman Islands (2004-present)
- Edward H Ntalami - CEO of the Kenyan Capital Markets Authority (2002-present)
- Mark Olson - Member of the Board of Governors of the U.S. Federal Reserve (2001-06)
- Mark Olson - Chairman of the Public Company Accounting Oversight Board
- Hugo Schiltz - Belgian Senator (1992-95)
- Keith Gottfried - General Counsel for the U.S. Department of Housing and Urban Development (2005-2006)
[edit] Other
- Kimberly Clarice Aiken - Miss America 1994
- Bill Capodagli - business writer
- Maris Martinsons - academic
- Edward Psaltis -yachtsman
[edit] Notes
- ^ Hoovers [1]. Retrieved 25 November 2006.
- ^ Ernst & Young Entrepreneur of the Year Awards
- ^ http://www.royalacademy.org.uk/?lid=1596
- ^ BBC News (2005). Equitable drops High Court action. Retrieved 26 August 2006.
[edit] External links
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| Deloitte Touche Tohmatsu | Ernst & Young | KPMG | PricewaterhouseCoopers | |
