Ernst & Young
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Categories: Companies based in New York City | Companies based in London | Privately held companies of the United States | Privately held companies of the United Kingdom | Companies established in 1849 | Accountancy firms of the United States
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. According to Forbes Magazine, as of year 2007 it is also the 7th largest private company in US[1]. Ernst & Young is a global organization consisting of many member firms. Ernst & Young Global is based at London, UK and the US firm is headquartered at 5 Times Square, New York, NY.[2]
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EY offices in New York.
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EY offices in London, at More London Place near Tower Bridge.
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EY offices in Sydney.
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EY offices in Detroit at Campus Martius Park.
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EY offices in Warsaw.
America and UKThe company (partnership) is the result of a series of mergers of ancestor organizations. The oldest originating partnership was founded in 1849 in England as Harding & Pullein. 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. 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 & 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")[3]. Rest of the worldEY 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. GlobalizationThe firm is currently undergoing a process of globalization. Each EY member country is now part of one of seven Areas:
Each Area has a single management team that is led by an Area Managing Partner who sits on the Global Executive Board. All Areas are currently integrating their business models, including partner pay. Service lines and GrowthEY has three main service lines:
As of 2007, TAS led the service line growth, achieving a 29% revenue increase, reflecting Ernst & Young's involvement in some of the largest deals over the period, including significant activity in the emerging markets, and the exceptional demand from Private Equity clients. Tax revenue improved by 18%, owing to strong demand for these services, particularly in the Far East and Americas. The continued steady demand for assurance and risk-based services, together with the growing call for business advisory services, enabled AABS revenue to grow by more than 16%. In the seven Areas, US dollar growth has been as follows: 10% in the Americas; 22% in Northern Europe, Middle East, India and Africa; 16% in Central Europe; 17% in Continental Western Europe; 27% in the Far East; 16% in Oceania, and 21% in Japan. Notably, in places where strategic investments have been made — such as China, India and Russia — growth in excess of 30% has been achieved. [4] Acquisitions and divestituresIn 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[5]. EY 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 amongst the Big Five. 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 consulting firm of Cap Gemini Ernst & Young, which was later renamed Capgemini[6]. In 2002, EY merged with many of the ex-Arthur Andersen practices around the world, although not those in the USA, UK or the Netherlands[7]. Significant audit clientsEY is the auditor for major global corporations, including the following (as verified by their annual reports):
PublicityErnst & Young's publicity activity includes its worldwide Entrepreneur of the Year program, run in 39 countries.[8] 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 exhibitions were Rodin at the Royal Academy of Arts and Renoir at the National Gallery.[9] Ernst & Young UK is based at More London. 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."[10] StaffThe firm has been named as one of the 10 Best Companies for Working Mothers by Working Mothers magazine[11]. 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[12]. 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. [13]. Notable current and former employeesBusiness
Politics and public service
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