EY, previously known as Ernst & Young, is a multinational professional services network based in London, England.[5] Along with Deloitte, KPMG and PwC, it is one of the Big Four professional services firms. The EY network is composed of member firms of Ernst & Young Global Limited, a UK company limited by guarantee.[5]
EY is one of the largest professional services networks in the world.[6] It primarily provides assurance, tax, information technology services (including managed services in areas like Cybersecurity, Cloud, Digital Transformation and AI), consulting, and advisory services to its clients.[7]
Ernst & Young Global Limited operates as a network of member firms structured as separate legal entities. As of mid-2024, it employs approximately 393,000 people across more than 700 offices in over 150 countries and territories.[4] The firm's current partnership was formed in 1989 by a merger of two accounting firms: Ernst & Whinney and Arthur Young & Co.[8] It was named Ernst & Young until a rebranding campaign officially changed its name to EY in 2013,[9] although this initialism was already used informally prior to its sanctioning adoption. In 2023, EY was the seventh-largest privately owned organization in the United States,[10] and EY has for 25 years been continuously ranked on Fortune magazine's list of the 100 Best Companies to Work For, longer than any other accounting firm.[11] The firm has, however, repeatedly come under scrutiny for systemic issues in their training, hiring, and work culture.
History
Early history and mergers
EY resulted from several mergers of ancestor firms over the last century and a half, the oldest of which was founded in 1849, in England, as Harding & Pullein. That same year, this firm was joined by an accountant named Frederick Whinney, who, a decade later, became a partner. After his son joined the firm, it was later renamed Whinney, Smith & Whinney, in 1894.[12]
In 1903, the firm Ernst & Ernst was founded in Cleveland, Ohio, by Alwin C. Ernst, and his brother, Theodore Ernst. In 1906, Arthur Young & Co. was set up by a Scottish accountant, Arthur Young, in Chicago. Starting in 1924, these two American firms became allied with prominent British firms; Young with Broads Paterson & Co.; and Ernst with the aforementioned Whinney Smith & Whinney. The latter of these two mergers spawned Anglo-American partnership Ernst & Whinney in 1979, then the fourth largest accountancy firm in the world.[12]
A decade later, in 1989, Ernst & Whinney merged with the fifth largest firm globally at the time, Arthur Young & Co., to create Ernst & Young.[13]
Global structure
The firm is organized geographically into three areas: Europe, Middle East, India and Africa; the Americas; and Asia-Pacific.[48]
In 2018, the company underwent a transformation of some of its region borders, primarily the union of its CIS region (operating in the former Soviet Union) and the CEE region (Eastern Europe) to create the CESA block.[49]
Services
Over the course of its operations, EY has transformed its business model and diversified its pool of offered services. Over the course of the last decade EY has substantially altered its business approach to offer a more comprehensive scope of services. This is mainly attributed to an intensified competition in the existing market of professional services, and competition in new markets: investment banking and strategic consultancy. According to the latest published data, the company has the following four main service lines:[50]
- Assurance: comprises Financial Audit, Financial Accounting Advisory Services, CCaSS (Climate Change and Sustainability services) and Forensic & Integrity Services.
- Tax: Transfer Pricing, International Tax Services, Business Tax Compliance, Global Trade, Indirect Tax, Tax Accounting & Risk Advisory Services, Tax Technology and Transformation, Transaction Tax.
- Consulting: comprises three sub-service lines – Business Consulting, Technology Consulting, and People Advisory Services.
- Strategy and Transactions (SaT): deals with companies' capital transformation – including Valuation, Modelling, and Economics (VME); Transactions Due Diligence; Real Estate Advisory; M&A; Turnaround &
Litigation and disputes
Audit practices
EY has been involved in many accounting scandals: Bank of Credit and Commerce International (1991), Informix Corporation (1996), Sybase (1997), Cendant (1998), One.Tel (2001), AOL (2002), HealthSouth Corporation (2003), Chiquita Brands International (2004), Lehman Brothers (2010), Sino-Forest Corporation (2011), Olympus Corporation (2011), Stagecoach Group (2017),[51]
Employment culture
Sexist training program
In October 2019, HuffPost broke a story about a New Jersey "Power-Presence-Purpose" training seminar purportedly to empower female employees, but which was, as characterized by HuffPost, "full of out of touch advice".[106] Women were told to concentrate on their appearance, not to show too much skin, and not to speak too much. One participant said it was basically a "women bashing" exercise. "You have to offer your thoughts in a benign way...You have to be the perfect Stepford wife... It felt like they were being turned into someone who is super-smiley, who never confronts anyone" she said.[107] In 2021, EY agreed to pay the state of New Jersey $100,000 and set up a $500,000 scholarship following its investigation of the program to resolve claims EY broke state law against discrimination.[108]
Working rights
Sponsorships
Ernst & Young is involved in many sponsorships, including its World Entrepreneur of the Year Award program, held in over 60 countries.[116]
The awards are an annual award program sponsored by Ernst & Young in recognition of entrepreneurship. Founded in 1986 in Milwaukee as a single award, the program now runs in all 50 U.S. states and in more than 60 countries.[117]
At the country and territory levels, programs begin with nomination[118] of entrepreneurs who demonstrate specific criteria. The award may be given to multiple individuals per year. For example, in the U.S. and other countries, there are multiple regional and category winners, spanning fields such as for retail and consumer products, technology, family business, energy, chemical and mining, food products and services, real estate, hospitality, and construction, financial services, digital media, and transformational ventures.[119] However, in each country, only one company and its leader(s) are recognized as the overall award recipient.
See also
- Accounting networks and associations
- Big Four accounting firms
- Clarkson Gordon & Co (Canada)
External links
References
- Ernst & Young Global Limited Companies House, retrieved 2020-07-23^
- Facts & Figures Ernst & Young, 30 June 2011, retrieved 8 December 2011^
- Janet Truncale selected as next EY Global Chair and CEO; effective July 1, 2024 EY, 15 November 2023, retrieved 16 November 2023