Ernst & Young Global Ltd.

• Ernst & Young
• Ernst & Whinney
• Arthur Young & Co.

Ernst & Young Global Ltd. (EY) is worldwide accounting firm and professional service network which is the product of the 1989 merger between two large accounting firms: Ernst & Whinney and Arthur Young & Co.. 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. 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 Scotsman 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. A decade later, in 1989, Ernst & Whinney merged with the fifth largest firm globally at the time, Arthur Young & Co., to create Ernst & Young. The Ernst & Young merger created a firm with 6,100 partners and two chief executive officers, Ray Groves from Ernst & Whinney and William Gladstone from Arthur Young. In one of its first business decisions following the merger, Ernst & Young began to move into computer-aided software engineering. This step reflected Ernst & Young's diversification into management systems and strategic planning services for businesses. The process innovation services were sold worldwide, primarily to the insurance and banking industries. he 1990s, it was steeped in the controversy surrounding the crisis of the savings and loan industry. Ernst & Young's audits of 23 failed savings and loans were investigated by the Office of Thrift Supervision (OTS) under a subpoena issued in June 1991. Several judgments were rendered against Ernst & Young in connection with the investigation. In July 1992, for instance, the firm paid a fine of $1.66 million to settle accusations that it helped Charles H. Keating, Jr., deceive the federal government about the health of his failing S&L. Moreover, former Ernst & Young partner Jack D. Atchison's license was suspended for four years by the accounting board of Arizona. He was accused of helping persuade five U.S. senators to intervene with federal regulators on Keating's behalf. In connection with this settlement, Ernst & Young paid $63 million to settle charges of wrongdoing in the Keating affair. Ernst & Young did not admit guilt, however, and the claim was paid largely by insurance. In total, some $204 million in fines were paid in this civil suit. In another settlement, Ernst & Young paid $400 million to the federal government in compliance with a federal ruling against the company. To eliminate overlap created by the merger and to reduce its payroll expenses, the firm cut its staff in 1991 and eliminated many partner positions. Although revenues had fallen slightly in the late 1980s, by the early 1990s revenues were modestly but steadily rising. Ernst & Young's costly legal battles encouraged several changes in the mid-1990s. First, the firm hired a new general legal counsel, Kathryn Oberly, who reputedly made keeping costs down a higher priority than battling on principle. Second, the firm stepped up its expansion into consulting, an area much less fraught with legal responsibilities and their concomitant lawsuits than auditing. In addition to increasing its consulting in risk management, the company moved into information software products. Ernst & Young also entered new business areas in the mid-1990s by developing alliances and by acquiring smaller companies. In 1996 the firm forged an alliance with Tata Consulting, headquartered in India. The same year, its alliance with ISD/Shaw gave the firm an entree into banking industry consulting. The firm moved into the petroleum and petrochemical consulting business in 1996 when it purchased Wright Kellen & Co. Ernst & Young created a new subsidiary with the Houston-based company, which they named Ernst & Young Wright Killen. In 1997 Ernst & Young forged an agreement to merge with KPMG International, another Big Six accounting firm, but abandoned the merger plans in 1998. In 2002, Ernst & Young serviced a large chunk of the clients previously working with Arthur Andersen after their downfall in connection with the Enron scandal. In 2010, Ernst & Young acquired Terco, the Brazilian member firm of Grant Thornton. Ernst & Young announced that it had adopted EY as its global brand name on July 1, 2013. Also 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.[30] EY expanded further and acquired all of KPMG Denmark's operations. In 2014, EY acquired global strategy consulting firm The Parthenon Group. In 2015, EY opened its first global Security Operations Centre in Thiruvananthapuram, Kerala in India, and coincidentally invested $20 million over 5 years to combat the increasing threat of cybercrimes. EY is currently headquartered in New York City, NY.

New York City, NY

Accounting firm
Professional and business services
Consulting

RAD, July 2008 version. Canadian Council of Archives.

Catalogued April 2022.

1) https://en.wikipedia.org/wiki/Ernst_%26_Young
2) https://www.icaew.com/library/historical-resources/guide-to-historical-resources/firm-histories/whats-in-a-name/ernst-and-whinney
3) https://www.company-histories.com/Ernst-Young-Company-History.html
4) https://de-academic.com/dic.nsf/dewiki/403783