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Ernst & Young (trading as EY) is a multinational professional services firm

headquartered in London, United Kingdom. It is one of the "Big Four" audit


firms[6][7] and is the third largest professional services firm in the world by
aggregated revenue in 2014, after PwC and Deloitte.

The organization operates as a network of member firms which are separate legal
entities in individual countries. It has 212,000 employees in over 700 offices
around 150 countries in the world. It provides assurance (including financial
audit), tax, consulting and advisory services to companies.[8]

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.[9] 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.[10]

As of 2015, EY was the 11th largest privately owned organization in the United
States.[11]
Early history[edit]
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.[12]
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.[12]

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.[12]

As early as 1924, these American firms allied with prominent British firms, Young
with Broads Paterson & Co. and Ernst with Whinney Smith & Whinney.[12] In the
year 1979, this led to the formation of Anglo-American Ernst & Whinney, creating
the fourth largest accountancy firm in the world.[12] Also in 1979, the European
offices of Arthur Young merged with several large local European firms, which
became member firms of Arthur Young International.

Mergers[edit]

In 1989, the number four firm Ernst & Whinney merged with the then number
five, Arthur Young, on a global basis to create Ernst & Young.[13]

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.[14]

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.[15]

21st century: Expansion and Future[edit]

EY offices in Warsaw, Poland.

Ernst & Young Plaza in Los Angeles, California.


In 2002, EY took over many of the ex-Arthur Andersen practices around the
world, although not those in the UK, China, or the Netherlands.[16]

In 2006, EY became the only member of the 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.[17][18]

In 2010, EY acquired Terco, the Brazilian member firm of Grant Thornton.[19]

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.[20]

In 2013, EY changed its brand name from Ernst & Young to EY and tagline to
"Building a better working world".[21]

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 institutions
administration, including the museums, post office and tax-free department
store.[22] EY expanded further and acquired all of KPMG Denmark's operations
including its 150 partners, 1500 employees and 21 offices. [23]

In 2015, EY opened its first ever global Security Operations Centre at


Thiruvananthapuram, Kerala in India and will invest $20 million over 5 years to
combat increasing threat of cybercrimes.[24]

Global structure[edit]
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
performed by its member firms.

Each EY member country is organized as part of one of four areas.[25] This is


different from other professional services networks, which are more centrally
managed.

The four areas are:

EMEIA: Europe, Middle East, India and Africa


Americas
Asia-Pacific
Japan

Ernst & Young, Saudi Arabia (Riyadh Office at Al Faisaliyah Tower, Riyadh)

Each area has an identical business structure and a management team, which 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.

Services[edit]
EY has four main service lines and share of revenues in 2014:[26]

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.
Tax avoidance[edit]
In 2014 tax arrangements negotiated by EY for The Walt Disney Company, Koch
Industries, Skype, and other multinational corporations became public in the socalled Luxembourg Leaks. The disclosure of these and other tax arrangements
led to controversial discussions about tax avoidance.[27][28][29]

Staff[edit]
EY was ranked No. 1 in Forbes magazine's "The Best Accounting Firms to Work
For" in 2012, claiming that EY treats its employees better than other large firms
do. It was ranked 57 overall.[30]

The firm was ranked No. 1 in BusinessWeek's annual list of "Best Places To
Launch a Career" for 2008.[31]

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.[32]

EY was ranked 4th in Universum's America's "Ideal Employers" list 2011[33] and
3rd in its Global Top Employers list.[34]

The firm was No. 34 in ComputerWorld's "100 Best Places To Work For In IT" for
2009.[35]

The firm was also placed among the top 50 places in the "Where Women Want to
Work" awards for 2007.[36]

The firm was named as one of the "10 Best Companies for Working Mothers" by
Working Mothers magazine in 2012 for the 7th straight year.[37]

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 participated got 20% of regular salary plus benefits of full-time
employee. The initiative applied to employees in Hong Kong, Macau and
mainland China, where the firm employs 8,500 in total.[38]

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.[39]

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.[40]

In 2013, EY earned 100% rating on the "Human Rights Campaign Corporate


Equality Index".[41]

In 2013, EY was named one of DiversityInc magazine's Top 50 companies for


diversity.[42]

In 2013, EY was ranked 4th in "Universum Top 100 IDEAL Employer".[43]

In 2014, EY was ranked 2nd in Universum World's Most Attractive Employers.[44]