|Member firms have different legal structures, USA and UK: Limited Liability Partnership|
|Founded||1989 through the merger of Ernst & Whinney and Arthur Young & Co. Oldest component from 1849|
|Headquarters||London, United Kingdom|
|Revenue||US$ 27.4 billion (2014)|
Number of employees
|Divisions||Assurance, Advisory, Transaction Advisory Services, Tax|
|Slogan||"Building a better working world"|
Ernst & Young Global Limited (known as EY) is a multinational professional services firm headquartered in London, United Kingdom. It is one of the "Big Four" audit firms and is the third largest professional services firm in the world by aggregated revenue in 2014.
The organization operates as a network of member firms which are separate legal entities in individual countries. It has 190,000 employees in over 700 offices around 150 countries in the world. It provides assurance (including financial audit), tax, consulting and advisory services to companies.
The firm dates back to 1849 with the founding of Harding & Pullein in England. The current firm was formed by a merger of Ernst & Whinney and Arthur Young & Co. in 1989. It was known as Ernst & Young until 2013, when it underwent a rebranding to EY. The acronym "EY" was already an informal name for the firm prior to its official adoption.
EY 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.
As early as 1924, these American firms allied with prominent British firms, Young with Broads Paterson & Co. and Ernst with Whinney Smith & Whinney. In the year 1979, this led to the formation of Anglo-American Ernst & Whinney, creating the fourth largest accountancy firm in the world. Also in 1979, the European offices of Arthur Young merged with several large local European firms, which became member firms of Arthur Young International.
In 1989, the number four firm Ernst & Whinney merged with the then number five, Arthur Young, on a global basis to create Ernst & Young.
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.
EY had built up its consultancy arm heavily during the 1980s and 1990s. 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.
21st century: Expansion and FutureEdit
In 2006, EY became the only big four to have two member firms in the United States with the inclusion of Mitchell & Titus, LLP, the largest minority-owned accounting firm in the United States.
In 2013, EY agreed to pay federal prosecutors $123 million to settle criminal tax avoidance charges stemming from $2 billion in unpaid taxes from about 200 wealthy individuals advised by four Ernst & Young senior partners between 1999 and 2004.
In 2013, EY changed its brand name from Ernst & Young to EY and tagline to "Building a better working world".
In 2013, the Pope of the Roman Catholic church hired EY to help review Vatican City State's finances and help “verify and consult” the institution’s administration, including the museums, post office and tax-free department store.
In 2013 EY expanded further and acquired all of KPMG Denmark's operations including its 150 partners, 1500 employees and 21 offices. 
In year 2013, EY launched "Vision 2020."
EY is the most globally managed of the Big Four firms. EY Global sets global standards and oversees global policy and consistency of service, with client work being performed by its member firms.
The four areas are:
Each area has an identical business structure and one management team that is led by an Area Managing Partner who 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.
EY has four main service lines and share of revenues in 2014:
- Assurance (41%): comprises Financial Audit (core assurance), Financial Accounting Advisory Services, Fraud Investigation & Dispute Services, and Climate Change & Sustainability Services.
- Tax (26%): includes Transfer Pricing, International Tax Services, Business Tax Compliance, Human Capital, Customs, Indirect Tax, Tax Accounting & Risk Advisory Services, Transaction Tax.
- Advisory (24%): consisting of four subservice lines: Actuarial, IT Risk and Assurance, Risk, and Performance Improvement.
- Transaction Advisory Services (TAS) (9%): deals with companies' capital agenda – preserving, optimizing, investing and raising capital.
In 2014 tax arrangements negotiated by EY for The Walt Disney Company, Koch Industries, Skype and other multinational corporations became public in the so-called Luxembourg Leaks. The disclosure of these and other tax arrangements led to controversial discussions about tax avoidance.
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.
The firm was also placed among the top 50 places in the "Where Women Want to Work" awards for 2007.
In April 2009, Reuters reported that EY 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% 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.
In early 2012, it was reported that EY has 10,000 staff in mainland China and Hong Kong, which has quadrupled in a decade. It has about 11,200 staff in the UK.
In 2012, the firm was ranked number 1 in the "Stonewall Top 100 Workplace Equality Index", a list of Britain's top 100 gay-friendly employers. In 2013, the firm was ranked number 6 in the same Workplace Equality Index.
In the year 2013, EY earned 100% rating on the "Human Rights Campaign Corporate Equality Index".
In the year 2013, EY was ranked 4th in "Universum Top 100 IDEAL™ Employer".
In the year 2014, EY was ranked 2nd in Universum World's Most Attractive Employers.
The current EY logo was introduced in July 2013, to coincide with the firm changing its trading name from Ernst & Young to EY.
Ernst and Young has been in accounting scandals - 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) and Olympus Corporation (2011).
Equitable Life (2004)Edit
In April 2004, Equitable Life, a UK life assurance company, sued EY after nearly collapsing but abandoned the case in September 2005. EY described the case as "a scandalous waste of time, money and resources for all concerned."
Bally Total Fitness (2008)Edit
Following allegations by the Securities and Exchange Commission that EY had committed accounting fraud in its work auditing the books of Bally Total Fitness, EY reached two settlements in 2008, including a fine of $8.5million.
Anglo Irish Bank (2009)Edit
In 2009, in the Anglo Irish Bank hidden loans controversy, EY was criticised by politicians and the shareholders of Anglo Irish Bank for failing to detect large loans to Sean FitzPatrick, its Chairman, during its audits. The Irish Government had to subsequently take full ownership of the Bank at a cost of €28 billion. The Irish Chartered Accountants Regulatory Board appointed John Purcell to investigate. EY said it "fundamentally disagrees with the decision to initiate a formal disciplinary process" and that "there has been no adverse finding made against EY in respect of the audit of Anglo Irish Bank."
Sons of Gwalia (2009)Edit
In 2009, EY, the former auditors of Sons of Gwalia, agreed to a $125m settlement over their role in the gold miner’s collapse in 2004. Ferrier Hodgson, the company's administrator, had claimed EY was negligent over the accounting of gold and dollar hedging contracts. However, EY said that the proposed settlement was not an admission of any liability.
Akai Holdings (2009) and Moulin Global Eyecare (2010)Edit
In 2009, EY agreed to pay US$200m out of court to settle a negligence claim by the liquidators of Akai Holdings. It was alleged that EY falsified dozens of documents to cover up the theft of over US$800m by Akai's chairman, James Ting - in some cases documents had been painted over with correcting fluid and then written over by hand. In a separate lawsuit a former EY partner, Cristopher Ho, made a "substantial payment" to Akai creditors in his role as chairman of the company that had bought Akai just before it went bust in 2000. Police raided the Hong Kong office and arrested an EY partner who had been an audit manager on the Akai account from December 1997, although audit documents had been doctored dating back to 1994. The EY partner for the Akai account between 1991 and 1999, David Sun Tak-kei, faced no charges and went on to become co-managing partner for EY China. A few months later EY settled a similar claim of up to HK$300m from the liquidators of Moulin Global Eyecare, an audit client of the Hong Kong affiliate between 2002 and 2004. The liquidators described the Moulin accounts as a "morass of dodginess".
Lehman Brothers (2010)Edit
The Valukas Report issued in 2010 charged that Lehman Brothers engaged in a practice known as repo 105 and that EY, Lehman's auditor, was aware of it. New York prosecutors announced in 2010 that they have sued the firm. EY said that its last audit of Lehman Brothers was for the fiscal year ending 30 November 2007 and that Lehman’s financial statements were fairly presented in accordance with Generally Accepted Accounting Principles. In March 2015, EY settled Lehman-related lawsuits in New Jersey and California.
Standard Water (2013)Edit
EY Hong Kong resigned from the audit of Standard Water when it emerged that although they had signed off the audit, it had been effectively outsourced to the affiliate in mainland China, who had received 99.98% of the fee. This was important because shareholders have less confidence in mainland auditors, and audit papers on the mainland are subject to state secrecy laws and can be withheld from outside regulators. EY's quality and risk management leader (Greater China) even testified in the Court of First Instance that he was not sure if there was any formal agreement covering the relationship between the two EY entities. The court case in 2013 came as US regulators were taking an interest in similar cases of accounting fraud in mainland China.
Corporate affairs and cultureEdit
EY's publicity activity includes its World Entrepreneur Of The Year program, held in over 60 countries.
EY UK also publicizes itself by sponsoring exhibitions of works by famous artists, such as Cézanne, 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.
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.
EY in the UK has set up the National Equality Standard, an initiative developed for business which sets clear equality, diversity and inclusion (EDI) criteria against which companies are assessed. The National Equality Standard (NES) is currently the only industry recognised national standard for EDI in the UK.
EY in the UK has set up EY Foundation, a new UK charity set up to support young people and entrepreneurs.
On 8 September 2011, Rio 2016 made the announcement that EY will be an official sponsor of the XXXI Olympic Summer Games to be held in Brazil, as the exclusive provider of professional services – consulting and auditing – for Rio 2016 organizing committee.
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