EY
Eliezer Shlomo Yudkowsky (born September 11, 1979) is an American artificial intelligence researcher, decision theorist, and writer recognized for originating key concepts in AI alignment and popularizing rationalist methodologies through online communities and literature.[1][2] In 2000, he co-founded the Singularity Institute for Artificial Intelligence—later renamed the Machine Intelligence Research Institute (MIRI)—to pursue research on developing safe superintelligent systems capable of addressing existential threats while preserving human values.[3] Yudkowsky's foundational contributions include early formulations of coherent extrapolated volition as a framework for aligning advanced AI with human preferences and advancements in decision theory, such as timeless decision theory, aimed at resolving paradoxes in self-modifying agents.[4][2] Yudkowsky established the LessWrong online community in 2009 by adapting content from the earlier Overcoming Bias blog, seeding it with extended essay sequences that dissect cognitive biases, Bayesian reasoning, and epistemic humility to foster improved human judgment under uncertainty.[5] These writings, compiled as Rationality: From AI to Zombies, have influenced the effective altruism movement and broader discussions on reducing errors in forecasting and decision-making. His 2010–2015 fan fiction Harry Potter and the Methods of Rationality reimagines the Harry Potter narrative to embed lessons in scientific skepticism and probabilistic thinking, amassing millions of readers and serving as an accessible entry point to rationalist ideas.[6] Yudkowsky's advocacy emphasizes the acute risks of unaligned artificial general intelligence, arguing from analyses of instrumental convergence and the orthogonality thesis that superintelligent systems could pursue mis-specified goals catastrophically orthogonal to human survival, potentially leading to extinction-level outcomes absent robust safeguards.[2][7] He has critiqued optimistic timelines for safe AI development, urging international shutdowns of large-scale training runs, positions that have drawn both acclaim for highlighting underexplored failure modes and rebuttals from industry figures prioritizing rapid capability gains.[8][7] Despite lacking formal academic credentials, his self-directed research trajectory underscores a commitment to first-hand technical exploration over institutional consensus.[9]History
Origins of predecessor firms
Arthur Young, a Scottish-born accountant who emigrated to the United States, established Arthur Young & Co. in Chicago in 1906 after acquiring the interest of a prior partner and joining forces with his brother Stanley Young.[10] The firm pioneered approaches to auditing and positioned itself as a business advisor beyond traditional bookkeeping, responding to the demands of industrial expansion in the early 20th century.[11] By the end of the 1910s, it had opened offices in key U.S. cities such as New York, Kansas City, and Milwaukee, facilitating growth tied to corporate auditing needs during economic booms.[12] Concurrently, brothers Alwin C. Ernst and Theodore Ernst launched Ernst & Ernst in Cleveland, Ohio, in 1903 with an initial capital of $500, operating initially from the Schofield Building.[13] The partnership emphasized rigorous audit standards and client-focused services, including specialized offerings that distinguished it amid rising demand for reliable financial verification in manufacturing and rail sectors.[14] Expansion followed industrial urbanization, with new U.S. offices established by the 1920s and early international ties formed through correspondent relationships.[11] These firms evolved independently through the mid-20th century via organic growth and strategic partnerships. Ernst & Ernst merged with the UK-based Whinney, Smith & Whinney in 1979 to create Ernst & Whinney, forming the fourth-largest accountancy network globally at the time and enhancing transatlantic capabilities.[15] Arthur Young & Co. pursued U.S. consolidations and global affiliations, including European integrations by the late 1970s, bolstering its audit and advisory footprint without diluting core practices.[14]1989 merger and early growth
In 1989, Ernst & Whinney, the third-largest accounting firm in the United States with headquarters in New York, merged with Arthur Young & Co., the sixth-largest U.S. firm based in Cleveland, to form Ernst & Young.[16][17] The merger, announced in May and effective in October, combined revenues of approximately $4.3 billion and created a global network with over 500 offices across more than 80 countries, positioning the new entity as one of the largest professional services firms worldwide.[18][19] This union was driven by intensifying market competition in the auditing sector, where firms faced pressure to scale up to serve multinational clients demanding integrated global services, amid a broader wave of consolidations among the Big Eight that reduced their number to the Big Six.[12][20] Post-merger integration presented challenges, including harmonizing distinct firm cultures and operational systems, though executives emphasized minimal office closures or staff reductions to preserve talent.[21][14] The combined firm initially operated from New York as its primary U.S. hub, leveraging the strengths of both predecessors to streamline audit and advisory practices.[13] These efforts focused on efficiency gains, such as shared resources for large audits, which studies later attributed to cost reductions benefiting major clients without evident anticompetitive effects.[20] In the early 1990s, Ernst & Young experienced steady revenue growth, with sales rising modestly from late-1980s levels through expanded consulting and risk management services, amid increasing demand for international capabilities.[14] The firm capitalized on global expansion by deepening its presence in emerging markets and enhancing cross-border operations, solidifying its Big Six status before subsequent industry mergers further consolidated the sector.[22] This period marked initial stabilization, with emphasis on auditing technology-driven enterprises as computing and data systems proliferated, though growth was tempered by the mature U.S. audit market's competitive dynamics.[12][23]Rebranding and global expansion
In July 2013, Ernst & Young rebranded to EY, shortening its name to project a more modern image and underscore its expansion beyond core accounting into integrated professional services, including assurance, consulting, tax, and transactions.[24] The change, effective July 1, coincided with the appointment of Mark Weinberger as global chairman and CEO, aiming to align the firm's identity with its growing advisory focus amid competitive pressures in the professional services sector.[24][25] EY pursued geographic diversification in the mid-2000s to 2010s, particularly in emerging markets, forming a dedicated Asia-Pacific Area that drove revenue expansion through organic growth and targeted hires.[26] In fiscal 2010, this region achieved 9.0% revenue growth, outpacing some mature markets and reflecting EY's adaptation to rising demand for services in high-growth economies like China and India.[26] This expansion supported overall firm revenues, which benefited from globalization trends increasing cross-border advisory needs. To strengthen its strategy consulting arm, EY acquired The Parthenon Group in September 2014, integrating roughly 300 specialists across offices in Boston, London, Mumbai, San Francisco, and Shanghai.[27] The deal enhanced EY's capabilities in corporate strategy, performance improvement, and transactions, positioning it to compete more effectively with pure-play consultancies.[28] Complementing this, EY responded to post-Enron reforms like the 2002 Sarbanes-Oxley Act by advancing audit technologies and processes to ensure compliance with internal control standards under Section 404, thereby elevating overall audit quality and investor confidence.[29]Key developments since 2010
In 2014, EY acquired The Parthenon Group, a Boston-based strategy consulting firm, to establish EY-Parthenon as its dedicated arm for mergers and acquisitions advisory, corporate strategy, and transactions support, adding approximately 350 consultants to bolster capabilities in these areas.[30] This move expanded EY's non-audit services amid a shift toward higher-growth consulting, where revenues from strategy and transactions reached US$6.2 billion in fiscal year 2025, contributing to overall service diversification.[31] The COVID-19 pandemic prompted EY to accelerate adoption of remote auditing technologies and digital tools for financial reporting, enabling continued operations amid lockdowns while emphasizing supply chain resilience and internal audit adaptations for distributed workforces.[32][33] Consulting revenues subsequently outpaced audit growth, with a 5.2% increase in local currency terms for fiscal year 2025 (to US$16.4 billion), offsetting slower assurance expansion amid regulatory scrutiny on traditional audit practices.[34][35] In response to evolving technological demands, EY launched the EY.ai Agentic Platform in March 2025, developed in partnership with NVIDIA, integrating domain-specific AI models for enhanced risk management, tax compliance, and finance operations across sectors.[36] This initiative, alongside collaborations with Microsoft for AI skills development and Databricks for scalable AI models, positioned EY to address AI-driven risks in audit and advisory while driving operational efficiencies.[37][38] EY also undertook structural adjustments for cost efficiency, including in its German operations where personnel-focused reductions and non-personnel cost measures were implemented starting in 2023 to align with economic pressures, alongside a global reorganization under CEO Janet Truncale in 2025 that streamlined sectors from eight to six.[39][40] Concurrently, EY expanded EY-Parthenon in March 2025 by unifying strategy and transactions practices, enhancing its position in global M&A amid subdued deal activity.[41]Services
Assurance and audit
EY's assurance and audit services form the foundation of its operations, delivering independent verification of financial statements to enhance trust in capital markets. These services encompass statutory audits for public companies, ensuring compliance with regulatory standards such as the Public Company Accounting Oversight Board (PCAOB) requirements in the United States and International Financial Reporting Standards (IFRS) internationally.[42] [43] Auditors apply professional skepticism, analytics-driven methodologies, and multidisciplinary approaches to assess financial reporting risks and controls.[44] In fiscal year 2025, EY reported global revenues of US$53.2 billion, with assurance services contributing significantly through audits of thousands of public entities worldwide. The firm maintains a substantial presence in initial public offerings (IPOs), capturing 27% to 28% of global IPO audit market share in recent years, underscoring its role in high-profile listings and capital market entry.[34] [45] As part of the Big Four accounting firms, EY collectively audits 100% of Fortune 500 companies alongside peers, dominating the market for large-scale public company engagements.[46] Beyond financial statement audits, EY extends assurance to non-financial areas, including sustainability reporting and internal control effectiveness. These engagements involve independent procedures over environmental, social, and governance (ESG) disclosures to verify transparency and reliability, often aligned with frameworks like COSO for internal controls.[47] [48] In 2025, EY advanced audit quality through a US$1 billion technology investment, integrating artificial intelligence (AI) capabilities into its global assurance platform for enhanced risk assessment, anomaly detection, and process efficiency. This includes AI-powered tools under the EY.ai initiative to accelerate audit transformation while maintaining independence and objectivity.[49] [50] PCAOB inspections highlight EY's ongoing efforts to refine audit practices, with the firm targeting a deficiency rate below 10% in its 2025 report through investments in training and quality controls, despite historical findings in areas like revenue recognition and internal controls testing.[43] These measures aim to sustain empirical rigor in verifying financial integrity amid complex global regulations.[51]Tax advisory
EY's tax advisory services encompass corporate tax planning, transfer pricing, and international compliance, enabling clients to optimize fiscal positions amid evolving regulations. These services include developing transfer pricing policies aligned with business strategies and risk profiles, as well as preparing documentation to support intercompany transactions.[52] EY publishes annual Worldwide Transfer Pricing Reference Guides summarizing rules across jurisdictions to aid multinational enterprises in compliance.[53] In response to post-2015 BEPS initiatives, EY advises on global tax reforms, particularly BEPS 2.0 Pillar Two, which imposes a 15% minimum effective tax rate on multinational groups with annual revenue exceeding €750 million.[54] This includes assessing impacts on Country-by-Country Reporting and implementing processes for global minimum taxation compliance effective from late 2023 in many jurisdictions.[55] EY provided guidance on the U.S. Tax Cuts and Jobs Act of 2017, analyzing its effects such as the corporate rate reduction from 35% to 21% and changes to international taxation, including modifications to base erosion provisions.[56] For emerging digital taxes, EY supports clients in navigating digital services taxes and extraterritorial rules, including readiness for new reporting under digital economy taxation frameworks.[57][58] In finance operations, EY's employment tax advisory identifies compliance gaps and cost-saving opportunities, such as optimizing payroll tax practices, while Work Opportunity Tax Credit services have enabled credits ranging from $2,400 to $9,600 per eligible hire for clients targeting specific worker groups.[59][60]Consulting and advisory
EY's consulting and advisory services emphasize operational improvements, risk mitigation, and technology integration to enhance client efficiency and resilience. These offerings include supply chain optimization, digital transformation, and risk management, which aim to streamline processes and reduce vulnerabilities through data-driven interventions and automation. For instance, EY's supply chain consulting addresses end-to-end operations to protect against disruptions and foster growth by redesigning logistics and inventory models, leading to measurable cost reductions and agility gains.[61] EY Managed Services provide outsourced solutions for non-core functions, transforming routine tasks into value-generating activities via automation and analytics. These encompass technology, risk, cybersecurity, and sustainability managed services, enabling clients to focus on core competencies while EY handles operational execution, often resulting in faster decision-making and lower overhead costs.[62] In risk management, EY advises on embracing disruptions by building agile frameworks that convert potential threats into competitive edges, including enterprise risk assessments and third-party risk oversight. Digital transformation consulting accelerates business evolution by aligning technology with operational goals, mitigating risks like legacy system failures and seizing efficiencies from cloud migrations or process automation. Cybersecurity advisory covers strategy, compliance, and resilience, helping organizations strengthen defenses against evolving threats through incident response planning and posture assessments.[63][64][65] EY has prioritized AI and cybersecurity amid shifting demands, with AI consulting driving significant growth. In fiscal year 2025, ending June 2025, EY's consulting revenues reached $16.4 billion, up 5.2%, bolstered by a 30% increase in AI-related work focused on enterprise transformations and governance frameworks, which offset declines in transaction advisory due to market slowdowns. This expansion reflects causal links between AI adoption and operational efficiencies, such as predictive analytics reducing downtime in manufacturing.[66][67] Industry-tailored solutions underscore these capabilities. In healthcare, EY's financial sustainability advisory integrates cost reduction with efficiency enhancements, targeting administrative burdens and care delivery to improve margins without compromising quality. For oil and gas, digital operations consulting leverages platforms like EY DEEP to optimize upstream and midstream activities, using data analytics for production boosts and sustainability, thereby lowering costs and emissions through precise resource allocation.[68][69]Strategy and transactions
EY acquired The Parthenon Group, a boutique strategy consultancy founded in 1991, in July 2014 to bolster its high-end strategy and transaction capabilities, integrating it into the Transaction Advisory Services unit while retaining initial branding independence.[28] This merger established EY-Parthenon as the firm's dedicated platform for transformative strategy, emphasizing corporate finance, M&A advisory, private equity portfolio optimization, and deal execution.[70] By March 2025, EY-Parthenon absorbed the broader Strategy and Transactions team, scaling to approximately 25,000 professionals focused on ecosystem redesign, portfolio reshaping, and value-accretive reinvention.[71] EY-Parthenon delivers transaction lifecycle support, including M&A strategy formulation, divestment planning, financial valuations, and advanced decision modeling to quantify deal impacts.[72] Corporate finance services integrate capital markets analytics with scenario-based modeling to guide funding structures and risk-adjusted returns.[73] Due diligence processes identify enterprise value drivers, refine deal terms, and uncover synergies or liabilities, with methodologies prioritizing empirical outcomes over optimistic projections.[74] In recent years, emphasis has shifted toward sustainable investments, incorporating ESG due diligence to reduce execution risks and elevate long-term value in private equity transactions, as evidenced by improved investment performance metrics in ESG-integrated deals.[75] EY research demonstrates that serial M&A participation correlates with superior total shareholder returns and enterprise value expansion, with frequent acquirers outperforming peers by aligning deals to core competencies and executing post-merger integrations rigorously.[76] For fiscal year 2024, Strategy and Transactions generated revenue growth of 2.8% in USD terms amid a firm-wide increase to $51.2 billion, providing a counterbalance to uneven assurance performance through elevated demand for deal advisory during economic stabilization.[77] This segment's focus on verifiable value creation—via synergy capture frameworks and data-driven valuations—has sustained contributions exceeding 20% of total revenues in recent periods, offsetting regulatory pressures on traditional audit lines.[78]Operations and structure
Global network and governance
EY operates as a global network of independent member firms, each a legally separate entity affiliated with Ernst & Young Global Limited (EYG), a UK-registered company headquartered at 1 More London Place in London.[79][80] This decentralized structure limits cross-liability among firms, as liabilities incurred by one member do not automatically extend to others, promoting localized accountability while enabling coordinated global operations.[81] EYG serves as the central coordinating body, responsible for establishing unified methodologies, quality standards, and risk management frameworks that member firms must implement, though operational decisions remain autonomous to comply with local regulations and client needs.[82] The network encompasses more than 700 offices across over 150 countries and territories, facilitating service delivery tailored to regional markets under a shared brand.[83] Governance is led by a global executive, including the Global Chair and CEO, with Janet Truncale appointed to the role on July 1, 2024, following an election by EY's global partners.[84] This leadership enforces consistency in ethical standards and professional practices amid the firms' independence, with periodic elections ensuring alignment with partner interests in the partnership model.[85] In response to regulatory pressures on auditor independence, EY pursued Project Everest, a plan to separate its audit and consulting arms announced in September 2022, but abandoned it in April 2023 after internal opposition, particularly from U.S. partners concerned over profit dilution and client conflicts.[86][87] The decision preserved the integrated model, arguing it better supports holistic client advisory while maintaining internal checks on conflicts through firm-level autonomy and global oversight.[88]Workforce and corporate culture
As of 2025, EY employs approximately 400,000 people across more than 150 countries, supporting its operations in assurance, consulting, tax, and strategy services.[89][90] The firm emphasizes workforce development through structured upskilling initiatives, including the EY Virtual Academy, which provides eLearning in finance, analytics, and ethics with hands-on components.[91] In July 2025, EY launched the AI Academy to equip enterprise workforces, including its own employees, with generative AI skills via targeted training modules.[92] These programs align with broader efforts, such as delivering 24 million hours of AI mastery training to enhance proficiency and integration in daily operations.[93] EY's stated corporate purpose is "building a better working world," which informs its internal culture focused on long-term value creation for clients, employees, and society through trust-building and talent growth.[94] This ethos supports flexible work arrangements post-COVID-19, with internal surveys indicating that 90% of employees desire such options, and over half globally would consider leaving without them.[95] The firm promotes autonomy in hours and location as key motivators for retention, alongside initiatives addressing belonging, though a 2023 global survey revealed 45% of workers cited flexibility as their top factor, while many reported discomfort in fully sharing personal identities at work.[96] Diversity efforts include tracking representation metrics, but external critiques note persistent challenges, with 63% of employees in one poll preferring employers prioritizing inclusion.[97] In October 2024, EY terminated dozens of U.S. employees after discovering they had attended multiple online training sessions simultaneously, deeming it a violation of company policy on ethical conduct and professional development requirements.[98][99] The incident, involving continuing professional education courses, highlighted tensions between workload pressures and strict adherence to single-session focus, prompting internal debate on multitasking in virtual learning environments.[100][101] EY described the actions as necessary to uphold integrity standards, amid broader Big Four scrutiny over talent retention amid high demands.[102]Technology and innovation initiatives
EY has invested in the EY.ai platform, a unifying system that integrates artificial intelligence with human expertise to support risk assessment and operational processes across client engagements.[50] The platform includes the EY.ai Agentic Platform, launched on March 18, 2025, in partnership with NVIDIA, which deploys domain-specific AI reasoning models for tasks in tax, risk, and finance, enabling automated analysis of complex datasets to reduce manual review time.[36] Complementary tools like the EY Trusted AI Platform quantify risks in AI deployments by evaluating data sources and model behaviors, prioritizing verifiable inputs over untested assumptions.[103] In data management, EY established a Databricks Center of Excellence on September 2, 2025, within its Global Delivery Services in Mexico City, extending capabilities from its U.S.-based counterpart to provide nearshore support for AI-driven analytics and scalable data solutions.[104] This hub focuses on deploying Databricks technologies for processing structured and unstructured data, facilitating efficient querying and model training without reliance on overhyped scalability promises.[105] For audit-specific applications, EY utilizes blockchain tools such as the Blockchain Analyzer Reconciler, updated in its fourth generation as of February 2023, to reconcile off-chain client records with on-chain transactions via API-based querying, minimizing discrepancies in digital asset verification.[106] [107] The accompanying Explorer and Visualizer components allow auditors to search and map blockchain addresses, blocks, and transactions, enhancing detection of anomalies through direct data extraction rather than intermediary summaries.[108] Data analytics platforms like EY Helix further embed statistical modeling into audits, processing terabyte-scale datasets to identify patterns in financial records with programmable logic for reproducible outcomes.[109] These initiatives emphasize partnerships with established vendors like Databricks and NVIDIA to ground technology adoption in operational workflows, such as accelerating transaction reconciliation in audits by automating cross-ledger validations.[110] Empirical efficiency gains stem from reduced data handling latency, as evidenced by the platforms' capacity to handle real-time blockchain protocol evaluations without custom coding for each engagement.[111]Financial performance
Revenue trends and growth drivers
Ernst & Young (EY) reported global revenues of US$53.2 billion for the fiscal year ending June 30, 2025 (FY25), reflecting a 4.0% increase in local currency terms from the prior year.[34] This marked a continuation of steady expansion, with FY24 revenues at $51.2 billion, up 3.9% from FY23.[112] Historically, EY's revenues have shown resilience post-2008 financial crisis, achieving compound annual growth rates exceeding 8% over the subsequent decade, including peaks like 11.6% in FY15 to $28.7 billion—the fastest pace since 2008.[113] More recently, FY23 saw 14.2% growth to nearly $50 billion, underscoring recovery and adaptation amid varying economic cycles.[114] Key growth drivers in recent years include expansion in consulting services, which rose 5.2% to $16.4 billion in FY25, outpacing overall firm growth and comprising roughly 31% of total revenues.[66] Artificial intelligence (AI)-related engagements surged 30% year-over-year, fueled by demand for enterprise transformations, governance frameworks, and integration projects that address regulatory and operational challenges.[34] Tax services also contributed, with increased complexity from global compliance and digital taxation driving demand, helping offset softer areas like transaction advisory amid economic uncertainty.[115] Over the five-year period FY20–FY25, consulting achieved an 11.3% compound annual growth rate, compared to 8.2% firm-wide, highlighting a strategic pivot toward higher-margin advisory amid audit market saturation and regulatory scrutiny.[31] Regionally, Asia-Pacific revenues reached $7.4 billion in FY25, with a 2.3% gain, though historical trends show stronger performance, including double-digit growth rates in periods like FY18 driven by emerging market demand.[31] [116] This diversification has sustained momentum into FY25 despite macroeconomic headwinds, such as subdued dealmaking, by leveraging technology-enabled services that align with client needs for efficiency and risk management.[66]Profitability and partner compensation
EY's global network operates as a partnership structure, with profits from member firms distributed primarily to equity partners based on factors such as individual performance, firm contributions, and regional results. This model incentivizes efficiency and value creation by tying compensation directly to profitability, fostering accountability among the approximately 10,000 equity partners worldwide. Profit per partner serves as a key internal metric, reflecting operational discipline amid competitive pressures in assurance, tax, and consulting services.[117] In the UK, average partner profit distributions increased 9% to £787,000 for the fiscal year ended June 27, 2025, following leadership changes and operational revamps aimed at enhancing margins despite market challenges. This uplift demonstrates the model's resilience, with distributions sustained through targeted cost management and revenue stabilization in core practices. Globally, however, partner profit shares faced downward pressure, declining around 5% in 2024 as firms navigated slower consulting growth and inflationary costs.[118][119][120] Cost controls have played a pivotal role in maintaining profitability metrics, as evidenced by restructuring efforts in key markets. In Germany, EY reduced partner and staff headcount to bolster margins post-scandals like Wirecard, with ongoing adjustments including the elimination of 30 partner positions in early 2025 amid sliding consulting profits. These measures prioritize lean operations, enabling profit per partner to remain competitive relative to Big Four peers, where average distributions hovered around $938,000 in 2024, underscoring EY's focus on stakeholder-aligned incentives over expansive hiring.[39][121][122]Controversies and regulatory issues
Audit failures and client scandals
Ernst & Young (EY) encountered significant scrutiny for its role in the Wirecard scandal, where the German fintech firm collapsed in June 2020 after revealing that €1.9 billion in purported cash reserves in Asian trusts did not exist. EY had served as Wirecard's statutory auditor since 2009, issuing clean audit opinions for the years 2016 through 2018 despite whistleblower warnings as early as 2015 about fraudulent activities and failure to independently verify the disputed balances with third-party custodians. German prosecutors and regulators determined that EY auditors neglected basic professional skepticism, overlooked inconsistencies in escrow confirmations, and relied excessively on management representations, contributing to the undetected inflation of assets by billions of euros.[123] In April 2023, Germany's audit oversight authority, Apas GmbH, imposed a two-year ban on EY from auditing public-interest entities, fined the firm €500,000, and barred two lead auditors from the profession for two years, citing "serious and systematic" deficiencies in risk assessment and evidence gathering during the 2016–2018 audits.[124] In the case of Luckin Coffee, EY conducted a forensic review in early 2020 that contributed to the Chinese coffee chain's disclosure of fabricated transactions totaling over $300 million in sales from April 2019 to January 2020, leading to a Nasdaq delisting and SEC charges against the company for misleading investors post its May 2019 IPO.[125] Although EY was not the primary IPO auditor, its subsequent examination highlighted internal control weaknesses and fictitious revenues generated through fabricated vouchers and reimbursements, prompting Luckin to restate 2019 financials and pay a $180 million SEC penalty in December 2020.[126] The incident underscored challenges in auditing high-growth firms with aggressive expansion tactics, though EY's involvement was limited to post-fraud verification rather than ongoing statutory audits.[127] EY also faces an ongoing investigation by the UK's Financial Reporting Council (FRC) into its audits of Post Office Limited's consolidated financial statements for the periods ending March 2015 through March 2018, during the Horizon IT scandal.[128] The Horizon system, implemented in 1999, generated erroneous accounting shortfalls that led to over 900 wrongful prosecutions of sub-postmasters for theft between 1999 and 2015, with potential liabilities exceeding £1 billion in compensation claims.[129] The FRC probe, announced on April 16, 2025, assesses whether EY adequately evaluated risks from known software bugs, contingent liabilities for sub-postmaster disputes, and disclosures in the Post Office's accounts amid internal awareness of system flaws since at least 2010.[130] As of October 2025, the investigation remains active, focusing on compliance with auditing standards for impairment testing and fraud risk in a state-owned entity.[131] These cases represent exceptions amid EY's audit of thousands of entities annually; for instance, PCAOB inspections of EY's U.S. practices in 2024 identified audit deficiencies in only 37% of sampled engagements, down from prior years, indicating overall adherence to standards in the vast majority of work.Internal ethics violations
In 2022, the U.S. Securities and Exchange Commission (SEC) imposed a record $100 million penalty on Ernst & Young (EY) after determining that a significant number of its audit professionals had cheated on the ethics component of Certified Public Accountant (CPA) exams over multiple years, including through unauthorized sharing of exam answers via internal messaging systems.[132] The misconduct, which began as early as 2012, also involved exploiting software flaws in EY's continuing professional education (CPE) testing platform, affecting over 200 professionals in one period alone by allowing passage without properly answering questions.[133] EY admitted the underlying facts but was further charged with misleading regulators by withholding internal reports of ongoing cheating during the SEC's investigation, including false assurances that no current issues existed despite evidence to the contrary.[132] The scandal prompted the resignation of EY's U.S. General Counsel, Ann Cook, in July 2023, amid an internal probe into the firm's handling of the matter and scrutiny over failures to disclose misconduct promptly.[134] This incident highlighted tensions in EY's high-pressure environment, where demands for certifications and billable hours may incentivize shortcuts, though the firm maintained mandatory ethics training programs for all employees to reinforce compliance.[135] In October 2024, EY terminated dozens of U.S.-based staff for simultaneously attending multiple online training sessions, deeming the practice a violation of internal ethics policies prohibiting concurrent credit for professional development courses.[98] Employees involved argued the action stemmed from multitasking necessitated by heavy workloads, but EY classified it as an integrity breach, echoing sensitivities from prior scandals and underscoring ongoing cultural pressures around efficiency in a competitive audit sector.[136]Responses and reforms
In response to the 2022 U.S. Securities and Exchange Commission (SEC) charges regarding employee cheating on ethics examinations, Ernst & Young LLP (EY) agreed to a $100 million civil penalty, the largest ever imposed by the SEC on a public accounting firm, while admitting the underlying facts and committing to extensive remedial measures.[132] These measures included enhancements to ethics monitoring systems, stricter protocols for professional training and assessments to prevent unauthorized answer sharing, and mandatory ethics training reinforcements across the firm.[137] Similar settlements followed in other jurisdictions, such as a $164,000 fine and probationary oversight from Connecticut regulators in 2024 for related licensure exam issues, emphasizing probationary compliance monitoring without further admissions of liability.[138] As of 2025, no public data indicates recidivism in exam integrity violations at EY, though long-term causal effectiveness remains unverified due to the recency of implementations.[139] Following audit-related sanctions, such as the 2023 two-year prohibition in Germany on accepting new public interest entity clients imposed by the Audit Oversight Body (APAS) over the Wirecard audits—without EY admitting fault—the firm pursued regulatory compliance through fines and operational adjustments rather than structural splits like the aborted Project Everest.[124] In parallel, EY allocated approximately $2 billion over three years starting in 2021 to bolster audit quality firm-wide, focusing on advanced analytics, data visualization tools, and risk assessment methodologies to address deficiencies highlighted in scandals.[140] This investment extended to a $1 billion commitment in 2022 for a next-generation assurance technology platform aimed at enhancing transparency and trust in audit processes through automated evidence gathering and anomaly detection.[141] Subsequent phases of technology integration, including large-scale AI capabilities rolled out in 2025 within the global assurance platform, prioritize real-time data processing and predictive risk modeling to mitigate audit failures empirically linked to human oversight in complex financial environments.[49] EY has defended these reforms by citing industry-wide systemic risks—such as aggressive client accounting practices and regulatory gaps—evidenced by low overall audit failure rates across Big Four firms (typically under 1% of engagements per PCAOB inspections), positioning firm-specific enhancements as proportionate rather than isolated fixes.[43] However, independent assessments note that while investments have increased audit efficiency metrics, such as reduced manual review times by up to 40% in piloted tools, verifiable reductions in material misstatement rates post-reform await longitudinal regulatory data.[142]Impact and reception
Achievements and industry role
Ernst & Young (EY) operates as one of the Big Four professional services firms, providing assurance, tax, transaction, and advisory services that facilitate trust in global capital markets and support efficient resource allocation across industries.[94] With a stated purpose of "building a better working world," EY emphasizes delivering insights and services that enhance long-term value for clients, people, and society, as evidenced by its global network serving thousands of public and private entities.[94] This role extends to enabling economic activities through rigorous financial reporting and compliance, contributing to market stability and investment decisions.[143] EY has demonstrated leadership in initial public offering (IPO) audits, engaging a significant share of non-SPAC IPO clients historically, with 23% market penetration among such issuances in 2021 as reported by industry analytics.[144] In sustainability reporting, EY has advanced integrated reporting practices, earning recognition through its annual Excellence in Integrated Reporting Awards and partnerships yielding tools for ESG performance management, such as its 2024 Microsoft Partner of the Year Award for Sustainable Changemaker.[145] [146] These efforts position EY as a key provider of verifiable sustainability disclosures amid rising regulatory demands. In innovation, particularly AI adoption, EY reported a 30% increase in AI-related revenue for its 2025 fiscal year, reflecting accelerated client implementations in consulting services.[147] The firm has received multiple accolades, including the 2025 Newsweek AI Impact Award for its Responsible AI framework promoting transparency and the AI Breakthrough Award for AI applications in agriculture via collaboration with Bayer Crop Science.[148] [149] EY's investments, totaling $3.6 billion in fiscal year 2023 for audit quality, technology, and innovation, underscore its commitment to scaling these capabilities.[15] EY's workforce of approximately 400,000 professionals globally supports job creation and economic contributions by delivering services that aid client growth and capital deployment, with the firm's operations spanning over 150 countries to foster business expansion and market access.[94] [89] This scale enables EY to influence broader economic outcomes, such as improved capital allocation strategies for corporate clients navigating volatile conditions.[150]Criticisms and alternative viewpoints
Critics from progressive perspectives argue that the Big Four firms, including EY, maintain an oligopolistic hold on the audit market, with over 74% global market share as of 2021, enabling high fees and conflicts of interest where lucrative consulting services compromise audit independence.[151][152] This dominance fosters client reliance on a handful of providers for complex audits, potentially stifling competition and inflating costs for stakeholders, including public companies whose shareholders bear indirect burdens through elevated service pricing.[153] EY's internal culture has also drawn scrutiny for contributing to employee burnout, exemplified by the 2024 death of a 26-year-old Indian employee attributed by her family to excessive workloads and a high-pressure environment that discourages work-life balance.[154] An independent review of EY Oceania's workplace in 2023 highlighted pervasive issues like fear of reporting misconduct due to high personal costs and eroded trust, exacerbating turnover and mental health strains among staff.[155] Alternative viewpoints emphasize the indispensable role of firms like EY in free-market verification, where external audits validate financial statements, mitigate fraud risks, and enhance investor confidence, thereby lowering capital costs for audited entities.[156] Proponents argue that high-profile audit deficiencies are overstated relative to the vast majority of successful verifications, with PCAOB inspections of Big Four audits showing deficiency rates dropping to 20% in recent years, indicating improved quality amid scrutiny.[157] Excessive regulation, such as mandatory separations of audit from advisory services, is seen as burdensome, raising operational costs and hindering efficiency without proportionally enhancing outcomes, particularly as smaller firms face disproportionate compliance loads that limit market entry.[158] Fines imposed on EY, such as the £250,000 penalty in 2024 for breaching UK non-audit fee caps, are viewed by some as taxpayer-funded recoupments when auditing public entities, yet defenders contend these penalties incentivize better practices without necessitating structural overhauls.[159] Debates on breaking up the Big Four persist, with calls from UK MPs in 2019 and analysts in 2023 advocating separation of audit and consulting arms to eliminate inherent conflicts and promote competition, arguing it would prevent enablers of corporate opacity from self-policing.[160][161] Opponents, including firm representatives like PwC, counter that such measures would erode resilience, escalate costs for clients, and fail to boost choice, as mid-tier firms lack capacity for large-scale audits, potentially concentrating risks further.[162][163] Empirical assessments suggest breakup thresholds tied to litigation exposure could destabilize individual firms if liabilities exceed $2.2 billion, underscoring trade-offs between accountability and market stability.[164]Other uses
Other companies and organizations
Etihad Airways, the flag carrier airline of the United Arab Emirates headquartered in Abu Dhabi, uses the IATA designator EY for its flights and operations. The airline, established in 2003, serves over 120 destinations worldwide with a fleet of more than 100 aircraft as of 2023. This usage of EY as an aviation code distinguishes it from professional services firms, focusing instead on air transportation and related logistics. In Finnish, "EY" abbreviates Euroopan yhteisöt, referring to the historical European Communities (a precursor to the European Union) established by treaties in the 1950s and 1960s. This governmental organization coordinated economic policies among member states until its functions were absorbed into the EU framework via the Maastricht Treaty in 1993. Smaller or regional entities occasionally adopt EY as initials, such as niche consultancies or tech firms (e.g., EY Solutions in localized markets), but these lack the global scale and prominence of the primary professional services network.[165] Such instances typically involve limited-scope operations in specific industries like software or local advisory, without overlapping in audit, tax, or multinational consulting domains.People
- Elliott Yamin (born July 20, 1978), an American singer-songwriter of Jewish descent, achieved prominence as the third-place finalist on the fifth season of American Idol in 2006, followed by the release of his debut album featuring the number-one single "Wait for You" on the Billboard Hot 100.[166][167]
- Eikichi Yazawa (born September 14, 1949), a Japanese singer-songwriter and rock icon, debuted as lead vocalist of the band Carol in 1972 before launching a solo career in 1975, selling millions of records and influencing generations in Japanese popular music.[168][169]
- Eyüp Sultan (Abu Ayyub al-Ansari, died c. 674 CE), a close companion and standard-bearer of the Prophet Muhammad, participated in the first Arab siege of Constantinople where he reportedly died, with his tomb in Istanbul's Eyüpsultan district serving as a key Islamic pilgrimage site since its identification in 1453.[170][171]