Ernst & Young

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.