Ernst & Young


Ernst & Young

Infobox_Company
company_name = Ernst & Young
company_
company_type = Member firms have different legal structures, USA and UK: Limited Liability Partnership
company_slogan = Quality in everything we do
location = London, England, UK (EY Global)
foundation = 1989; individual components from 1849
key_people = Jim S. Turley, Chairman and CEO
num_employees = 135,730 (Global)
industry = Professional services
services = Audit
Tax
Financial advisory
divisions = Assurance, Advisory, Tax, Transaction
(See below)
revenue = profit$24,523 million USD (2008)
homepage = [http://www.ey.com/ 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. According to Forbes Magazine, as of year 2007 it is also the 7th largest private company in US [ [http://www.forbes.com/lists/2007/21/biz_privates07_Americas-Largest-Private-Companies_Rank.html Forbes: Largest Private Companies] ] .

Ernst & Young is a worldwide organization consisting of a number of member firms. EY Global is based in London but administered from Cleveland, Ohio. EY Global does not perform client work: rather it sets global policy and oversees global quality and consistency of service. The US firm is headquartered at 5 Times Square, New York, NY. [ [http://www.hoovers.com/free/co/factsheet.xhtml?COID=40146&cm_ven=PAID&cm_cat=BUS&cm_pla=CO1&cm_ite=Ernst_&_Young Hoovers] . Retrieved 25 November 2006.]

History

America and UK

The 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. [http://www.ey.com/global/content.nsf/International/About_EY_-_Key_Facts_and_Figures_-_History_-_Timeline Ernst & Young - History] ] 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 & Co. 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") [ [http://query.nytimes.com/gst/fullpage.html?res=950DE2DE1E38F93BA25756C0A96F948260 Reports say Arthur Young and Ernst may merge] New York Times, May 1989] .

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.

Global structure

Each EY member country is organised as part of one of five areas:
* Europe, Middle East, India & Africa (EMEIA)
* Americas
* Far East
* Oceania
* Japan

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 integrating their business models.

EY has received approval from partners to integrate all of its 87 country practices in Europe, the Middle East, India and Africa to create EMEIA on 1 July 2008 [ [http://www.ft.com/cms/s/0/74ae637a-0f02-11dd-9646-0000779fd2ac.html?nclick_check=1 Ernst & Young to form single business] ] , effective from July 1, 2008.

ervice lines and growth

EY has three main service lines:
* Assurance and Advisory Business Services (AABS). This comprises mainly financial audit (core assurance) with 54% of total revenues and advisory services with 12% of revenues in 2007. Advisory services comprise Technology and Security Risk Services "TSRS", Fraud Investigation and Dispute Services "FIDS", Business Risk Services "BRS" and specialty advisory services, such as IMAS (Information Management & Analysis Services).
*Tax Services share of total revenues in 2007 was 22% and includes Business Tax Compliance, Human Capital, Indirect Tax, International Tax Services, Tax Accounting & Risk Advisory Services, Transaction Tax.
*Transaction Advisory Services (TAS), by far the smallest service line, includes commercial, financial, real estate and tax due diligence, mergers & acquisitions, valuation & business modeling, corporate restructuring and integration services.

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 activity in the emerging markets, and the demand from Private Equity clients. Tax revenue improved by 18%, owing to demand for these services, particularly in the Far East and Americas. The continued demand for assurance and risk-based services, together with the 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. [ [http://www.ey.com/global/content.nsf/International/Media_-_Press_Release_-_Revenues_FY2007 2007 Revenues Report Ernst & Young fiscal year 2007 global revenues rise 15% to US$21.1 billion] ]

Acquisitions and divestitures

In October 1997, EY announced plans to merge its 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 [ [http://news.bbc.co.uk/1/hi/business/56509.stm Accountancy merger off] ] .

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 [ [http://query.nytimes.com/gst/fullpage.html?res=9503E6D81339F932A35750C0A9669C8B63 Cap Gemini to acquire Ernst & Young consulting business] New York Times, March 2000] .

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 [ [http://findarticles.com/p/articles/mi_qn4174/is_20030408/ai_n12919502 Ernst & Young acquires Anderson India] ] .

Audit clients

EY is the auditor for global corporations, including the following (as verified by their annual reports):

*Energy: Atmos Energy, Tesoro, BP, CNOOC, ConocoPhillips, Rosneft, Ferrexpo, Kazakhmys, Total, Westinghouse Electric Corporation, Xstrata, Woodside, Hess, Talisman Energy, Pakistan State Oil
*Financial Services: 3i, ABN AMRO, Aviva, ING, Rabobank, ICBC, ING Group, Lehman Brothers, Piper Jaffray, CIBC, Scotiabank, Manulife, Man Group, Morgan Stanley, VTB, TD, UBS, US Bank , SunTrust Bank, Regions Financial Corporation, Unum Provident, National Australia Bank, AMP Ltd, Babcock and Brown, National City Corp., Key Bank, Endurance Reinsurance Corp, Chubb Corporation, Renaissance Capital, Pioneer Natural Resources
*Government: United States Postal Service, Royal Mail, Department of Immigration and Citizenship, Royal Australian Mint, Tennessee Valley Authority
*Healthcare: HCA, Caremark, Lifepoint, Cleveland Clinic, CSL Limited, UPMC
*Industrial Products: ABB, Delphi Corporation, Eaton Corporation, Eli Lilly, Syngenta, TetraPak, Hanson, Lafarge, LVMH, Porsche, Thales Group, Allegheny Technologies, Sherwin-Williams, Bombardier, Magna International
*Media: Time Warner, Virgin Media, Vivendi, Warner Bros. Records, Endemol, Gannett, News Corporation
*Real Estate: Bouwfonds, Brixton plc, Cadogan Estates, Curzon Global, Cushman & Wakefield, Emaar, GTP Halverton, Heron, ING Real Estate, J.E. Robert Company, Mapeley, Nakheel, Simon Property Group, VK Real Estate Group, Westfield Group, RioCan
*Retail & Consumer Products: Amazon.com, Hilton, Intercontinental Hotels, Marriott, McDonalds, Next, Starwood, Target, Coke, Wal-Mart, Tyson Foods, Whole Foods Market, AutoZone, Chico's, Dollar General, Canon Inc., Staples Inc., American Greetings, Pilgrim's Pride, Hastings Entertainment, Inc.
*Technology: AOL, AMD, ASUS, Baidu, Dell, Google, Hewlett-Packard, Intel, Oracle, Philips Electronics, Sun Microsystems, Research in Motion, Texas Instruments, Toshiba, Unisys, Facebook
*Telecoms: AT&T, France Telecom, Deutsche Telekom, Global Crossing, Orange, Telefonica, Telenor, Telstra, Verizon, Turk Telekom, Bharti Airtel, ArmenTel
*Travel/Transportation: American Airlines, British Airways, China Airlines, Continental Airlines, Delta Air Lines, FedEx, JetBlue Airways, Northwest Airlines, Pakistan International Airlines, Pinnacle Airlines, Scania AB, Singapore Airlines, Southwest Airlines

Publicity

Ernst & Young's publicity activity includes its worldwide Entrepreneur of the Year program, run in 39 countries. [ [http://www.ey.com/global/content.nsf/US/EGCS_-_Entrepreneur_of_the_Year_Awards_-_Overview Ernst & Young Entrepreneur of the Year Awards] ] 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. [ [http://www.royalacademy.org.uk/?lid=1596 Royal Academy] ] 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." [BBC News (2005). [http://news.bbc.co.uk/1/hi/business/4271048.stm Equitable drops High Court action] . Retrieved 26 August 2006.]

People

The firm was ranked No.1 in BusinessWeek's annual list of Best Places To Launch a Career for 2008. [ [http://images.businessweek.com/ss/08/09/0904_first_jobs/1.htm BusinessWeek: The Best Places to Launch a Career] ]

The firm is No.25 in the Fortune list of 100 Best Companies To Work For (and the highest among the Big Four). [ [http://money.cnn.com/magazines/fortune/bestcompanies/2007/full_list/ Fortune: 100 Best companies to work for] ] The firm was also placed among the Top 50 Places in the Where Women Want to Work awards for 2007. [ [http://www.timesonline.co.uk/tol/life_and_style/career_and_jobs/top_50_women/table/ Times-on-line: Where women want to work] ]

The firm was named as one of the 10 Best Companies for Working Mothers by Working Mothers magazine in 2006. [ [http://www.workingmother.com/web?service=direct/1/ViewArticlePage/dlinkFullArticle&sp=88&sp=94 Working Mother] ]

Notable current and former employees

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 Telekom Austria Czech Republic (2006-present)
*William C. Rhodes III - Chairman and CEO of AutoZone (2006-present)
*David Sambol - President and COO of Countrywide Financial Corporation (Ernst & Whinney)
*Arthur Blank - co-founder of Home Depot, Owner of The Atlanta Falcons
*Louis Rosen - Professor at the University of Maryland

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)
*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)
*John Howell - Member of the British Parliament (2008-present)
*Mark Olson - Chairman of the Public Company Accounting Oversight Board
*Hugo Schiltz - Belgian Senator (1992-95)
*Johnathan Wu - General Counsel for the U.S. Department of Housing and Urban Development (2005-2006)
*Zulfiqar Ali Bhutto - President of Pakistan (1971-1973), Prime Minister of Pakistan (1973-1977)
*Siegbert Alber - Advocate General of the European Court of Justice and founder of leading EU lobbying law firm Alber & Geiger
* Cesar Purisima - former country manager of EY's Philippine practice (known as Sycip, Gorres and Velayo & Company or "SGV & Co.") who became that country's finance minister under President Gloria Arroyo (2004-2005)

Other

*Kimberly Clarice Aiken - Miss America 1994
*Bill Capodagli - business writer
*Maris Martinsons - management professor and consultant
*Edward Psaltis - yachtsman

References

External links

* [http://www.ey.com Ernst & Young main website]
* [http://www.ey.com/global/content.nsf/International/EGC_-_Events_-_EoY Entrepreneur of the Year Homepage]
* [http://ilovebig4.com/category/ernst-young/ ILoveBig4.com] - Weblog with news about Ernst & Young and other Big Four auditors.


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