EY

Ernst & Young works in audit, taxation, transaction support and consulting.

The company has 190,000 employees worldwide (July 2014).

Performance indicators

2011

Ernst & Young's revenues for the fiscal year ended June 30, 2011 amounted to $22.9 billion. USA, and the total number of employees working in 144 countries of the world - 152,000 people.

2007

Revenue in fiscal year 2007 amounted to $21.1 billion (in 2006 - $18.4 billion).

Structure and Guidance

It is a global partnership of national audit companies (the largest of which operates in the United States).

Chairman and CEO - Mark Weinberger

Quarry ladder

• Partner
• Director - Optional
• Senior Manager
• Manager
• Senior Expert (Senior)
• Consultant or Expert (Advanced staff)
• Associate Consultant or Specialist (Staff)
• Intern

Business in Russia

Main article: Ernst & Young (CIS)

History

2023

Reduction of 10% of U.S. partners due to collapse in consulting demand

On December 11, 2023, the international audit and consulting corporation EY, which owns a network of companies around the world, announced its intention to significantly reduce the number of partners in the United States. This is due to a sharp decrease in demand for certain services, a crisis and a difficult macroeconomic situation in general.

The changes were announced by Yang Shim, head of technology consulting at EY in the Americas. According to him, the corporation is forced to revise its activities in those areas "where growth has noticeably slowed down and where excess resources have formed." It is reported that the cuts will affect approximately 10% of partners in consulting and about 4% in offices engaged in strategy development and transaction implementation. In addition, the reorganization will affect audit and tax offices. In total, the number of EY consulting partners will decrease by about 100, and by strategy and deals by more than 30.

EY announced its intention to significantly reduce the number of partners in the United States

These decisions were made deliberately. EY is transforming the business to focus on those areas where there is the greatest demand from customers, says the consulting corporation.

It is noted that, in addition to reducing the number of partners, EY will fire an unnamed number of its ordinary employees: these employees will receive comprehensive support. During the COVID-19 pandemic, the company actively hired people, which was facilitated by growing demand for consulting in areas such as corporate strategy and digital transformation. However, then there was a decline. In this situation, EY is looking for opportunities to reduce costs and improve its structure in the United States. According to market participants, all these measures are aimed at stabilizing operations after an unsuccessful project to divide the company into a consulting and audit business.^[1]

How artificial intelligence helps to conduct an audit

Artificial intelligence algorithms can improve audit efficiency. In particular, such tools help identify cases of fraud. This is stated in a study by the international audit consulting corporation EY, the results of which were disclosed in early December 2023. Read more here.

Reduction of 3 thousand jobs in the United States

EY (Ernst & Young) told employees in April 2023 it would cut 3,000 U.S. jobs to eliminate "excess capacity," with the axe falling mostly on the firm's consulting side.

2022

The data of thousands of employees were posted on the network. Among them - Russian

At the end of May 2022, it became known about the leakage of personal information of about 6 thousand employees of audit and consulting companies that were part of the E&Y group. The fact that such a database is being sold on the darknet is reported in the Telegram channel of Ashot Hovhannisyan, founder of the DLBI darknet intelligence and monitoring service.

The sold asset, according to the seller, contains information from about 200 partners and about 2 thousand employees of "leadership positions," including directors and managers working in companies in Russia, Kazakhstan, Armenia and Georgia. In addition to names and surnames, positions, divisions, as well as personal e-mail and phone numbers are indicated.

Data of thousands of E&Y employees posted on the network

According to Ashot Hovhannisyan, the data was obtained by a dismissed employee of the IT department or human resources department, since these departments have access to such information. A Kommersant source in the audit market says that in E&Y, before the international network left Russia, the reporting system was built so that the Russian office led the branches in the CIS, "therefore, most likely, the leak occurred from it."

According to the interlocutors of the newspaper, we can talk about the first data leak in the audit market. One of the sources of the publication in the audit market notes that any audit and consulting company has accumulated a lot of confidential client information if it could not save the data of its own employees, which can be said about the client.

According to Alexei Terekhov, managing partner of the FBK audit company, reputation risks entail the risk of losing customers, so companies are sensitive to their safety, especially strategically significant. However, according to him, usually auditors store information, both personal and auditing, including reporting, in various information storage systems, using most often cloud technologies, while these systems have different degrees of security.^[2]

Purchase of T-Plus Consulting

In early February 2022, EY bought the consulting company T-Plus Consulting, specializing in M&A transactions. The financial component of the transaction of the company did not disclose. Read more here.

2021

ServiceNow Partner Purchase by SuMO IT Solutions

In mid-September 2021, Ernst & Young acquired ServiceNow's partner, SuMO IT Solutions. The financial terms of the transaction were not disclosed. Read more here.

Investing $100 million in blockchain and crypto projects

At the end of May 2021, EY announced an investment of $100 million in research on blockchain technologies and crypto assets, as well as in the development of various blockchain-based solutions and services, including tools for analyzing smart contracts.

One of EY's offerings is the EY Blockchain Analyzer toolkit, which includes three services: the smart contract testing tool Ethereum, the blockchain browser and the tax calculator. As part of the updates, the company introduced the second generation of the Smart Contract & Token Review tool. A new version of the tool has a testing platform that allows you to simulate the launch of smart contracts for decentralized financing (DeFi) applications.

Errors in smart contracts pose large security risks to private and public blockchains that do not provide the ability to cancel transactions. Therefore, users require a comprehensive testing service for all smart contracts in the public block chain.

EY invests $100 million in blockchain and crypto projects

The new version of the product supports many new capabilities that will be used in complex DeFi ecosystems. It offers a combination of compliance tests with traditional code review, supports customizable smart contract tests and transaction simulation in the core blockchain network, the company said in a statement.

The new service has already used the SolidBlock tokenized platform. Users noted the benefits and convenience of the new tool. Also, the EY developers added their code to the public compiler of zero-disclosure protocols. Previously, the company developed the Starlight protocol, which, thanks to zero disclosure, solved the problems of maintaining the confidentiality of commercial information in the common network.^[3]

Buying British tech company Pythagoras

In early May 2021, EY announced the acquisition of British technology company Pythagoras, which is Microsoft's "gold" partner and provides professional services and solutions using technology platforms including Microsoft Azure, Dynamics 365, SharePoint and Power Platform. The financial terms of the deal were not disclosed. Read more here.

2020

Sign up with KfW

At the end of September 2020, it became known that the third largest bank in Germany, KfW, decided to abandon the audit services of the consulting company Ernst & Young, which failed to recognize the lack of 1.9 billion euros from the scandalous fintech startup Wirecard.

KfW is owned by the state, and the German government is considering preventing EY from entering a new tender for audit services. Commerzbank and DWS Group have already pulled out of EY's cooperation following the completion of existing contracts with the audit firm. City University of London accounting and finance professor Atul Shah expects more companies to start replacing auditors as managers took EY's blunders seriously.

It seems to me that the matter is on the board of directors. As a last resort, they will always be able to say they have done everything they can to protect the company and shareholders, "Shah said.

Representatives of EY call the scandal with the loss of 1.9 billion euros "carefully thought out" fraud, which could remain undetected even with a very thorough investigation. The company says account manager Wirecard tried to "cheat the auditor" and could provide "fake cash balance data." The company's problems with the audit began back in 2019: then it was reported that Wirecard employees overestimated the sales and profits of its divisions in Dubai and Dublin and misled auditors from EY.

As a result, Wirecard hired another audit company, KPMG, in 2019 to conduct a special audit. KPMG staff were unable to track the huge number of transactions behind Wirecard's profits between 2016 and 2018. Due to difficulties with the audit, the company has postponed the publication of reports for 2019 three times since March.^[4]

Deloitte and EY cut payments to partners by 20%

Deloitte's competitors have also begun cutting payments to partners. EY cut them by the same 20% in order to provide "additional flexibility and financial stability during a pandemic." Also, these steps should contribute to the long-term success of the company, they said.

EY claims that they did not reduce the number of personnel in Britain, where about 17 thousand people work. Salaries to employees also decided not to reduce.

KPMG said the company had "frank conversations" with its partners about what actions it needs to take during the pandemic. Details on this matter were not disclosed.^[5]

2019

Accidental loss of 100 bitcoins of customers

By August 2019, former users of the collapsed crypto exchange QuadrigaCX began to lose patience - despite the fact that the court appointed the audit company Ernst & Young to return the missing funds, it accidentally lost another 103 (bitcoin the cost of which is more than $1 million). Now the victims are demanding to explain how this happened, and are also considering the possibility of finding a new legal representative. More. here

C Centric CRM Solution Developer Purchase

On July 25, 2019, Ernst & Young (EY) announced the acquisition of CRM solutions developer C Centric, but did not name the value of the transaction. Read more here.

2014: Appointment of 675 new partners, growth of staff to 190 thousand people

On July 3, 2014, EY announced the appointment of 675 new partners, their number increased by 33% compared to 2013, which is the highest figure in the history of the company.

"We are proud of our new partners and I would like to congratulate them all on their appointment," says Mark Weinberger, Chairman of the Board and Chief Executive Officer of EY Global. - Each of them has made a huge contribution to the work of our company, aimed at providing extremely high quality services, strengthening the position in the market, creating the most effective teams of specialists and promoting the improvement of the business environment. EY employs many talented professionals, and such a noticeable increase in the number of new partners this year indicates EY's commitment to the professional growth of its employees. We are confident in the successful development of our organization in the future, as well as in long-term and fruitful cooperation with our clients. "

The number of new partners increased by 295 people in America (240 new partners in 2013, an increase of 23%), 237 people in the EMEIA region (162 new partners in 2013, up 46%), 115 people in Asia-Pacific (80 new partners in 2013 , an increase of 44%) and 28 people in Japan (27 new partners in 2013 , an increase of 4%).

"We continue to develop teams of specialists in all countries where our company operates. We are especially pleased to note the increase in the number of partners in emerging economies, says Mark Weinberger. "They accounted for 28% of all appointments, which indicates the high professional level of EY employees in these countries, their achievements and great potential for further growth."

As for the areas of services, the most appointments were made by employees of the audit services practice - 37% of all appointments (253 people). Further on the list are tax services (27%, or 183 people), consulting services (24%, or 159 people), transaction consulting services (10%, or 64 people). 16 employees of business support departments (2%) also became new partners.

We are also pleased to announce that 26% of new partners are women, two of whom have joined EY's global executive committee, the organisation's key governing body.

We have long had a policy of equal opportunity for career development, and our company is one of the leaders in terms of the number of women in leadership roles. Our experience is that the benefits of such policies are clear, "says Mark Weinberger

In fiscal 2014, the global EY organization's total workforce increased from 175,000 to 190,000 .

"Attracting highly skilled professionals is key to our success," says Mark Weinberger. - We actively invest in the development of their potential and form new generations of leaders. Taking into account our plans to increase the volume of services provided, we will continue to expand the staff of the company by attracting highly qualified specialists. "

Mark Weinberger says: "The appointment of such a significant number of new partners a year after the name change of our brand to EY and the adoption of the new mission" Improving the business, improving the world, "testifies to the dynamic development of the company."

2013: Weinberger leads the company. 509 new partners

On July 2, 2013, EY announced the induction of Mark Weinberger as its Chairman of the Board of Directors and Chief Executive Officer.

On July 12, 2013, EY named 509 employees who became new partners of firms in the global organization.

Mark Weinberger, Chairman of the Board of Directors and Chief Executive Officer of the global organization EY, noted:

"I would like to congratulate all our new partners appointed in 2013. We live in an interesting time in which we set large-scale tasks for our organization. And our new partners will be the people who lead EY along the way to achieve these tasks. I am also pleased to inform you that 26% of our new partners are fair sex. This is the highest number in the history of our company and a significant breakthrough compared to 2008, when the share of female partners was 19%. However, much remains to be done. We will continue to make every effort to build highly effective project teams by building leaders who will be guided by the principles of openness, as well as by creating an environment where a variety of experiences and cultures are encouraged and different opportunities are created. "

John Ferraro, EY's chief operating officer, noted:

"These appointments were the result of meticulous selection, which took into account the contribution that each candidate made to the successful development of EY. They also show that we are confident in the leadership qualities of the new partners. "

1989: Creation of Ernst & Young

1989 - Arthur Young merges with Ernst & Whinney. Ernst & Young (Ernst & Young) is created.

• 2000 - Ernst & Young becomes an international organization with offices around the world.
• 2007 - The Ernst & Young Association of Practices in North, Central and South America.

• 2008 - Association of Ernst & Young practices in the EMEIA region (Europe, Middle East, India and Africa) and in the Far East.

• On January 19, 2012, Mark Weinberger was selected as the next Chairman and CEO of Ernst & Young, a global organization. Mark Weinberger will replace in this role the current chairman and chief executive, James Turley, who has led Ernst & Young since 2001 and recently announced his intention to leave his post on June 30, 2013. Mark Weinberger's candidacy was unanimously supported by members of the Global Executive Committee, Ernst & Young's top governing body, and members of the Global Advisory Council, the top corporate governance body.

James Turley, head of Ernst & Young from 2001 to 2013, supported the organization's successful efforts to move to a global approach in the provision of professional services, as well as investments in new and emerging markets. Under the leadership of James Turley, the annual revenues of the global organization Ernst & Young increased from $10 billion to $23 billion. The number of its employees has doubled, and the company itself has become the most globally integrated company in the provision of specialized professional services in terms of its corporate worldview, structure and activities. James Turley advocated the formation of a developed personnel culture in the organization, which was most clearly manifested in the policy of diversity and openness, the successes of which were repeatedly noted by independent organizations.

1849: Harding & Pullein founded

• 1849 - Harding & Pullein was founded in England. Frederick Winnie comes to the company.
• 1859 - Winnie becomes a partner in the firm.
• 1864 - Thomas Clarkson opens a trust and external management firm in Toronto.
• 1894 - Harding & Pullein renamed Whinney, Smith & Whinney.

Arthur Young founded his firm Stuart and Young in Chicago. Arthur Young was born in Glasgow in Scotland. He graduated from the Faculty of Law, but soon showed interest in banking and investment. In 1890, Arthur moved to the United States to pursue a career in accounting.

• 1903 - Brothers Alvin and Theodore Ernst founded Ernst & Ernst in Cleveland (USA). Alvin Ernst was born in Cleveland in the United States. After graduation, he worked as an accountant.

• 1906 - Arthur Young founded Arthur Young in Chicago with his brother Stanley.

Arthur Young and Alvin Ernst were pioneers in their business and attached great importance to the quality of work. Ernst was the first to propose using accounting as a basis for making business decisions that could affect the development of customer companies. It encouraged the efficient performance of its employees aimed at improving the quality of services. Arthur Young viewed himself as a business consultant, not just an accountant.

Both firms recognized how important employees play a role in the development of any case. Ernst & Ernst's charter, adopted in 1920, stated: "The success of Ernst & Ernst depends entirely on the business qualities, abilities and hard work of the people working in the organisation." Arthur Young was actively involved in the training of specialists. In the 1920s, he founded a school for staff. In the 1930s, the company was the first to practice personnel selection among university students.

The companies quickly entered global markets.

• 1924 - Arthur Young merges with the English company Broad Paterson & Co.

Ernst & Ernst merges with Whinney, Smith & Whinney.

• 1939 - Thomas Clarkson's company merges with Woods Gordon & Co, exploring the direction of management consulting.
• 1944 - Clarkson Gordon & Company merges with Arthur Young & Co
• 1948 - Alvin Ernst and Arthur Young were not destined to meet during their lifetime. Both died in 1948, a few days apart, but the companies they founded continued to exist.
• 1979 - Ernst & Whinney is formed, the company is one of the four largest accounting firms in the world.

Arthur Young's branches in Europe are merging with several major European firms.

Company Reports

2012

The impact of the 2014 FIFA World Cup on Brazil's socio-economic development

Awards

In 2008, the company was awarded the first place by BusinessWeek magazine in the annual list of "The Best Places to Launch a Career."

In 2009, the company was ranked 44th in Fortune's list of "100 Best Companies to Work For" and the highest place among the Big Four.

Notes