Ernst & Young (Consulting Practice) Asia

ABOUT THIS COMPANY:

The integration of five regions

Ernst & Young is one of the largest consulting firms in the world, and one of the revered “Big Four” accounting firms. It serves clients through assurance and advisory, tax, transaction services, strategic growth markets and online services. From its assurance and advisory business, Ernst & Young offers a range of consulting services including risk management, fraud and investigation. The firm's specialty advisory services cover areas such as employee benefit plans, global treasury advisory, government contracts, health sciences, insurance and actuarial, national cash management and structured finance.

Overall, Ernst & Young employs more than 135,000 people worldwide, including over 76,000 staffers in the assurance and advisory arms. The firm operates from over 700 offices in 140 countries and territories around the world. In fiscal 2008, the firm posted US$24.5 billion in revenue, representing a 16.2 percent increase over 2007. In terms of global revenue, Ernst & Young is the third-largest of the Big Four—coming in just behind PricewaterhouseCoopers and Deloitte.

The firm underwent a companywide restructuring in 2008, organizing and integrating all of its businesses into five geographic regions: the Americas; Europe, the Middle East, India and Africa (EMEIA); the Far East; Japan; and Oceania. According to EMEIA Chief Operating Officer Christoph Gross, “Our integration efforts—bringing our countries together into our Americas, EMEIA and Far East Areas—mean that we are more global in our outlook, more integrated in our thinking, and more inclusive in our approach.”

A tangled past

Ernst & Young is one of the oldest consulting firms around, with a history that winds its way back over 100 years. In 1903, two brothers, A.C. and Theodore Ernst, started their own small accounting shop in Cleveland, Ohio, and called it Ernst & Ernst. A few years later in Chicago, Arthur Young and his brother, Stanley, opened an accounting business known as Arthur Young & Company.

Both firms were pioneers in their own ways: Ernst & Ernst claims to have been one of the first firms to put forth the idea that accounting information could help businesses make better management decisions—the precursor to management accounting—while Young became involved in developing young accountants and established a staff school in the 1920s. The following decade, Young became the first firm to recruit directly from college campuses. In 1957, Ernst & Ernst merged with British firm Whinney Murray & Co. to become Ernst & Whinney. Finally, in 1989, Arthur Young and Ernst & Whinney joined forces, establishing Ernst & Young.

Back in the game

As one of the Big Four accounting firms, Ernst & Young is renowned for its corporate auditing, accounting and tax services. And, while the firm now includes a management consulting branch, in 2001 Ernst & Young was forced to spin off its previous consulting practice and for many years operated without a formal consulting business. This spin off came as a result of tightening U.S. regulations governing auditors. To comply with these toughened laws, Ernst & Young's consulting business separated and became an independent company, taking on the name Capgemini.

Ernst & Young was free to begin rebuilding its advisory services only after a five-year noncompete agreement came to an end. In a 2006 Consulting Times article, Steve Varley, head of the advisory business, stated that he envisions Ernst & Young's consulting practice filling a gap in the market between strategy consulting and "tech play" firms. He indicated that this time around, Ernst & Young's advisory services will be more integrated with the rest of the practice than the former consulting division had been. So far, the strategy seems to be working. In 2008, the assurance and advisory services brought in US$16.59 billion in revenue—a 14 percent increase from the prior year.