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"Big Four" accountancy firms, along with Deloitte, KPMG and PricewaterhouseCoopers (PwC). Ernst & Young is a global organization of member firms in more than 140 countries, headquartered in London, UK.[4] It was ranked by Forbes magazine as the 9th largest private company in the United States in 2010.[5]
[edit] History
[edit] Early history
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.[6] 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.[6] 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.[6] As early as 1924 these American firms allied with prominent British firms, Young with Broads Paterson & Co. and Ernst with Whinney Smith & Whinney.[6] In 1979 this led to the formation of Anglo-American Ernst & Whinney, creating the fourth largest accountancy firm in the world.[6] 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.[7] 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.[8] EY had 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 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.[9]
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.[15] Ernst & Young offices
EY offices in Sydney
EY offices in Detroit
EY offices in Munich
EY offices in Toronto
EY offices in Lima,Peru
[edit] Services
EY has four main service lines and share of revenues in 2010:[16]
Assurance (47%): comprises Financial Audit (core assurance), Fraud Investigation & Dispute Services and Climate Change & Sustainability Services. Advisory Services (17%): consisting of four subservice lines: Actuarial, IT Risk and Assurance, Risk, and Performance Improvement. Tax Services (27%): includes Business Tax Compliance, Human Capital, Customs, Indirect Tax, International Tax Services, Tax Accounting & Risk Advisory Services, Transaction Tax. Transaction Advisory Services (TAS) (9%): deals with companies' capital agenda preserving, optimizing, investing and raising capital.
[edit] Staff
The firm was ranked No. 1 in BusinessWeek's annual list of Best Places To Launch a Career for 2008.[18] 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.[19] Ernst & Young was ranked 4th in Universum's America's Ideal Employers list 2011 [20] and 3rd in its Global Top Employers list.[21] The firm was No. 34 in ComputerWorld's 100 Best Places To Work For In IT for 2009.[22] The firm was also placed among the top 50 places in the Where Women Want to Work awards for 2007.[23] The firm was named as one of the 10 Best Companies for Working Mothers by Working Mothers magazine in 2006.[24]
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.[25]
[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."[26]
[edit] Sponsorship
Ernst & Young's publicity activity includes its worldwide Entrepreneur of the Year program, run in 50 countries.[45] EY UK also publicizes itself by sponsoring exhibitions of works by famous artists, such as Czanne, 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.[46] 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.[47] EY sponsors the ITEM club.[48]
provider of professional services - consulting and auditing - for Rio 2016 organizing committee.[49]