Ernst & Young vs Deloitte

Ernst & Young traces its origins to four separate accounting practices founded in the nineteenth century — including Harding & Pullein in England (1849), Ernst & Ernst in Cleveland (1903), Arthur Young & Company in Chicago (1906), and Whinney, Smith and Whinney in London (1894). None of the founders could have imagined that their small practices would eventually merge into a single firm employing 400,000 people.

Ernst & Whinney merged with Arthur Young in 1989, creating Ernst & Young — the largest accounting merger in history at the time, creating a firm with revenues of $4.3 billion and operations in over 100 countries. The tagline "Quality In Everything We Do" would later attract considerable irony given subsequent audit failures.

EY audited Wirecard, the German payments company, for ten years while the company was conducting a €1.9 billion fraud — booking money in bank accounts that did not exist. German regulators found that EY had failed to properly verify the existence of cash balances that represented a quarter of Wirecard's claimed assets. Wirecard collapsed in June 2020. EY faced investor lawsuits seeking billions in damages and a regulatory ban from new audit engagements in Germany. The scandal became EY's defining reputational crisis.

EY announced "Project Everest" in 2022 — a plan to split the firm into two separate entities: an audit firm and a consulting firm. The rationale was that combining audit and consulting created conflicts of interest and that the consulting business was undervalued inside the partnership structure. EY spent over $100 million and took on $700 million in debt preparing for the split. In April 2023, EY's U.S. partners voted against it — 40% of global revenues giving them effective veto power. The firm that had nearly become two remained one, having spent a year and hundreds of millions of dollars to reach the same conclusion it had started with.

Janet Truncale took over as EY's global CEO in 2024, succeeding Carmine Di Sibio who had championed and then watched Project Everest collapse. EY continued cutting headcount in Germany — where Wirecard's shadow had depressed growth — and in other markets where consulting demand had softened. Germany's accounting watchdog APAS handed EY a €500,000 fine and a two-year ban from taking on new audits of public-interest companies, related to its Wirecard audit work from 2016 to 2018. The firm that had promised quality in everything it did was managing the consequences of a decade-long audit failure and a half-billion-dollar strategic miscalculation simultaneously.

William Welch Deloitte opened an accounting practice in London in 1845, at a time when the profession of accountancy barely existed as a formal discipline. His early clients included the Great Western Railway — one of the most ambitious infrastructure projects in Victorian England. The railways were the first businesses complex enough to require independent financial oversight. In 1849, Deloitte was appointed the first independent auditor of a public company in history.

Deloitte opened its first U.S. office in New York in 1893, following its British clients as they expanded into American markets. The U.S. would eventually become the firm's largest market. The transatlantic expansion established a template that the major accounting firms would follow for the next century: grow internationally by following clients, not by seeking new ones.

Deloitte Haskins & Sells merged with Touche Ross in 1989, creating Deloitte & Touche — one of the largest accounting mergers in history. The combined firm had over 60,000 employees in 100 countries. The merger was driven by the need to serve multinational clients who required consistent audit standards across borders. This consolidation dynamic would eventually reduce the global audit market to just four dominant firms.

When Arthur Andersen collapsed in 2002 following the Enron scandal, Deloitte was the only Big Five firm that did not aggressively acquire Andersen's practice. While KPMG, Ernst & Young, and Pwcabsorbed thousands of Andersen partners and clients, Deloitte grew more selectively. The restraint proved wise: the firms that grew fastest from Andersen's collapse also inherited the most regulatory scrutiny.

Deloitte reported revenues of approximately $64 billion in fiscal year 2023, making it the world's largest professional services firm — a position it retained for years afterward, ranked No. 1 by revenue by Gartner for the eighth consecutive year in 2025. The firm employed over 450,000 people across 150 countries. However, the consulting industry faced headwinds in 2024-2025: Deloitte cut advisory roles in the UK as large-scale project demand softened, and reduced U.S. government consulting headcount as federal contracts were restructured under the DOGE efficiency initiative. AI was simultaneously threatening to automate the analytical work that had made consulting firms valuable — and creating enormous new demand for AI strategy and implementation work. Deloitte was racing to position itself on both sides of that disruption.