Category: EY

It Sounds Like KPMG Is *ThisClose* to Jumping Ernst & Young in Revenues

Not sure how we missed this story but thanks to the random commenter who brought it to our attention. New KPMG Global Chairman Michael Andrew was recently interviewed by The Australian and it sounds like KPMG had a pretty kickass fiscal 2011.

We’re still waiting for the official revenue numbers (I’m guessing they’ll be out next week) but Drew kinda spilled the beans already:

New KPMG global chairman Michael Andrew revealed to The Weekend Australian yesterday that the company had recorded a 10.1 per cent increase in revenue in the past financial year, to $22.7 billion. The numbers are due to be released officially later this month.

“If we had not had the Japanese earthquake, I suspect we would have gone past Ernst & Young. Japan is a good market for us. We had really good growth in the Americas and really good growth in tax,” he said yesterday.

FUCKING JAPAN AND YOUR EPIC NATURAL DISASTER! You just cost one of the premier professional services firms on EARTH the chance to leave a rival in the dust. Since there was enormous death and destruction, I guess everyone at the firm will let this go but they’re trying really hard not to throw out some pro forma numbers just for the sake of argument. ANYWAY, for those of you scoring at home, the $22.7 bil puts the House of Klynveld slightly behind E&Y who racked up $22.9 billion for FY ’11. It will also make for the second straight year of a bumper crop of Omaha Steaks for the employees at the firm.

But despite earthquakes and actual hard numbers, Mike is calling it like he sees it:

“We are basically equal No 3. There is still a big gap to PwC and Deloitte, which have been buying large consulting practices in the systems implementation area.”

In other words, if all things were equal, KPMG would probably be the largest firm. They’re just keeping their heads about it.

KPMG grows to match rival Ernst & Young [The Australian]

Latest Madoff Lawsuit Filed Against Ernst & Young Is Refreshingly Brief

Bloomberg reports, that E&Y was sued for “negligence, malpractice and breach of contract in connection with audits of financial statements over a five- year period,” which sounds like the standard fair in these matters. The pleasant surprise being the brevity of the suit. “The two-page filing doesn’t provide any details of the allegations against Ernst & Young,” which may cause you to wonder if it’s really just a one-page lawsuit (unthinkable, I know) with the second page simply stating, “This page is intentionally left blank.” Of course the downside here (aside from another lawsuit being lumped on the pile) is that E&Y’s lawyers won’t get a chance to rack up many billable hours just yet. Which is to say, there is no downside. [Bloomberg, Earlier]

Future Ernst & Young Associate Can’t Stop Talking About PwC

If you haven’t already, please read Adrienne’s post on submitting questions to the site. I applaud her for hitting every damn nail on the head, and I want to echo her bottom line: we love hearing from you; the advice columns keep this place buzzing; but please check to see if we answered your question last week. I’d also like to add that the details you can provide (practice lines, office location, level, etc.) make it easier for us to offer more precise feedback. Keep ‘em coming.

In the meantime, consider this post as Example A as to what will happen when a lazy ass individual seeks advice they can find right under their noses. With thistried to find some shred of a question to answer, but instead I found myself screaming at my monitor. If this is the product of Helicopter Parenting, we as a society are screwed. Nevertheless, we’ll get right to it:

Hey GC, how’s it going? I am writing about making a decision between EY’s FSO practice and their TAS practice. Right now there is a lot of squawk about PWC’s FSR and EY’s FSO practices. These are both very hot topics and I believe relevant to readers, as seen after the EY FSO Assurance article [this one].

First off, you’re making a decision between two different options at EY, yet refer to the “hot topic” of PwC’s FSR practice (Financial Instruments, Structured Products and Real Estate). Let’s spell out some definitions for people here who are not familiar:


1. EY FSO – Not a practice but rather a term that stands for Financial Services Office. Per their website (which I Googled like any child can do) EY’s FSO practice includes all three lines of business: assurance, tax, and advisory. It’s a go-to-market philosophy/marketing strategy/organizational hierarchy more than anything else. Go to the website to learn more, if you’re so inclined.

2. EY TAS – Transaction Advisory Services – an advisory practice by name, includes a variety of services (due diligence, restructuring, valuation, etc.). Without splitting hairs here, a TAS associate will work on FSO clients (e.g. valuing insurance claims at AIG). Said associate could also work on a transaction involving a factory in Topeka, Kansas.

3. PwC FSR – Most closely related to EY TAS as it would fall under TAS if it were at EY. But it’s not. It’s at PwC, where you don’t have an offer. Again, not relevant.

Many students have accepted or are contemplating offers from the big 4, and there are rumors circulating that FSR and FSO employees work banker hours and get paid like consultants.

You are clearly new to public accounting, Going Concern, and the world in general. Get paid like consultants? WTF does that even mean? And for the love of God, you’re not working at PwC. Stop talking about it. Note: At this point the contributor goes on with a list of questions; my feedback at the bottom.

I am having trouble making a decision between TAS and FSO. For staff one’s in NYC, total year one compensation with salary and signing bonus is between 60-70 thousand on average. Not bad, but with what kind of hours?

On the other hand, TAS year one salary is about 55k, no bonus. What type of hours can be expected? Being that all new hires in EY FSO start in BAP [link for those playing at home], a 4 year rotational program, does good old uncle Ernie just rotate their staff through busy season after busy season? How much travel can be expected in NYC, aren’t most financial clients located in the city? FSO and FSR new hires are earning on average about 10k more than their audit and TAS counterparts. If the hours are comparable to these service lines, why so much more money? If the hours are much longer in FSO, does the staff ever receive a bonus? There must be a hitch…

Readers should note: This contributor happened to email us from a company email address of a flailing/failing/going-down-in-flames investment bank and – in this writer’s opinion – should be thankful to have ANY job at ANY Big4 firm. Turns out this person has already worked at EY during a previous (and VERY recent) internship and assumedly had ample time/networks/professionals/resources/access to the Internet to answer the above asinine questions.

The hitch is that you don’t have an offer from PwC, so drop the comparison. It’s like comparing my ideal commute to work (jet pack, duh) to the one I currently have (6 train, running with delays). Comparing a PwC FSR offer to an EY TAS offer would at least be a bit more relevant.

I’m going to ignore all questions about busy season hours/travel because you should have asked them while going through the interview process. After all, that’s the point of the interview process. I’m also going to point out that your statement that, “FSO and FSR new hires are earning on average about 10k more than their audit and TAS counterparts” is wrong on many levels. First, FSO includes auditors. Second, new hires within FSO make different salaries (tax hires make XYZ, auditors makes ABC, etc.). Finally, STOP COMPARING EVERYTHING TO PwC’s FSR PRACTICE.

What you do have:

1. An offer in EY FSO: What group? I don’t have a f*cking clue, and you never told us.

2. An offer in EY TAS: Which sub-group? There are six spelled out on the company website.

So, back to one the question in your email that hasn’t been answered at GC a thousand times before:

Hey GC, how’s it going?

Overworked and underpaid. Ring a bell? Take a number.

Bottom line: read through EY’s website to understand their practice lines and acronyms, something you should have done before emailing us. Also, consider taking a job in a “safer” practice…because the last time we had record Black Friday sales was November 2008…and we all know that the house was on fire then…

Jim Turley Stepping Down as Chairman and CEO of Ernst & Young

~ Update includes statement from Ernst & Young

This morning we learned from a couple of sources that the big guy will be calling it a career officially on June 30, 2013 and the firm will announce a new CEO-elect at some point in early 2012.


Here’s JT’s message to the troops:

I have written to all our partners to let them know about my plans to retire from Ernst & Young on 30 June 2013.

Every year, our Global Executive (GE) considers the priorities and initiatives we feel Ernst & Young should focus on in the upcoming year, and these priorities are then approved by our Global Advisory Council (GAC), the top governance body of Ernst & Young.

Periodically, we also take a longer look at our strategy and vision, and involve the GAC in this as well. In July, we informed our partners that we were beginning such a long-term strategic review. The GE and I believe that our new strategy and leadership-succession plans are inextricably linked, and we agreed that June 2013 would be the right time for me to retire.

This is a normal process and the timing has worked out perfectly. I will be 58 years old, which is the normal early retirement age for many of our partners. By then, we will be implementing our new strategy and it’s right that a new leader should steer this implementation.

We are starting a robust process to identify the man or woman who will succeed me, in accordance with our regulations. We intend to identify a new Chairman and CEO elect during the first part of 2012. What I feel very good about is that we’re the type of organization that continually develops large numbers of great leaders, so I see many men and women who could lead Ernst & Young successfully into the future.

This is not a retirement letter or speech to you all, as there is much to do before June 2013. However, I wanted to be very open with you about our plans. Thank you for your continued support as we continue both our strategy and succession-planning process.

James S. Turley
Chairman and CEO

UPDATE: Ernst & Young provided us with the following statement:

In a communication to all Ernst & Young partners worldwide on 10 November 2011, James S. Turley, Chairman and Chief Executive Officer of Ernst & Young confirmed that he will retire as planned, aged 58, on 30 June 2013. The succession process to decide a new Chairman and CEO-elect is now underway and will conclude in early 2012, no later than April.

So after riding out Lehman, handing out a lot of trophies, and inspiring the greatest lyric in the history of Big 4 employee produced videos, (I’m sure there are other accomplishments too) Jimbo will ride off into the Black and Yellow sunset. This seems like an appropriate tribute:

Feel free to leave other well wishes below.

Interns, Here’s the Lowdown on Ernst & Young’s FSO Assurance Practice in NYC

Ed. note: Have a question for the career advice brain trust? Email us at advice@goingconcern.com with your problem(s) but only if you’re comfortable being mocked in an older sibling kind of way.

GC,

I know my question is somewhat specific but I just accepted an Internship offer for E&Y FSO Assurance in NYC and was interested in gaining some insight into the 3 divisions within FSO Assurance. First, I would love to hear your opinion on the pros and cons of each of the three sectors (Asset Management, Banking, & Insurance) including which EY is best known for. I was also wondering if there was a clear leader in each of those sectors in NYC and was wondering which of the Big Four was bestnks so much for your help. I know I am still a year away from having to actually select one of those options but gaining people’s opinions never hurt. Thanks so much.


Congratulations on landing a sweet summer gig with Uncle Ernie. You’ll be working for a great firm in a great city making a great salary while fetching great coffee for your superiors. Cheers!

But really, welcome to New York. You’re smart in thinking ahead to the fact that where you start with your internship will lead to a fulltime offer with the same group. This is because internships are essentially training camp for your first year – make it through the summer successfully and you’re in the club. I did a little digging within my professional circle to uncover some of the EY clients that you’d have the potential of working on, as well as my own two Lincolns.

Insurance – Let’s start with this one because I have a feeling that the group consensus will be unanimous: DO NOT JOIN THIS GROUP. Sure, it is a small, “family-like” practice in the financial services industry, but you’re not coming to work for the warm and fuzzies (if you are, avoid public accounting altogether). You’re coming to make yourself a valuable asset to future employers – one, three, or ten years from now. Can you receive accelerated responsibilities and extensive interaction with your clients? Yeah, but that’s because your co-workers are jumping ship and no one within the firm wants to transfer to the Insurance group. Unless you have an absolute passion for the industry (which you don’t, since you emailed us), I would avoid this group. Stay in this group for five years (you know, to make the dream promo to manager) and you’re setting yourself up for a career working for an insurance (or re-insurance) firm.

Banking and Capital Markets – This group is bigger and more prominent than the Insurance group. It’s taken its hit in recent years because…ummm…the banking industry is in turmoil, but some of the pain has been buoyed by their growing Broker Dealer client base (also falls into this group). Potential clients include Bank of America (*gulp*), UBS Wealth Management (the shining star in the UBS sky), Icahn Securities, JG Wentworth, ING Financial Holdings, and Cantor “run for the hills” Fitzgerald. Sources tell me audit staff are constantly trying to take rotations to the asset management group, so take that for what it’s worth. Career advancement outside of public can take you to either a banking or hedge fund depending on your client exposure, but have you read the papers recently? Banking ain’t the hottest date to the prom to these days.

Asset Management – this is EY’s money train in New York when it comes to audit (and even tax) services. EY and PwC dominate this market in New York, and depending on whom you ask EY has a more rounded client base (blue chip and start ups). Premier clients include Eton Park, Reservoir Capital, Anchorage Capital, and Och Ziff Capital (do some Googling to get an idea about these firms). The exposure to different investment strategies and financial products you will see will be second to none. Don’t forget that you can count the relevant investment banks left standing on two hands, whereas there are thousands of hedge funds and private equity firms in the country (most of which are in the greater NYC area, too). Your easiest and most lucrative path out of audit and into the private sector will be with a background in asset management. Absolutely, positively, 100%.

So there you have it. As always, GC’er please chime in below with your comments.

Your Ernst & Young Entrepreneurs Of The Year Include the Dude From Groupon, Patrick Byrne

We really don’t pay much attention to the E&Y Entrepreneur thingamajigs because, well, it’s boring. Sure, we like entrepreneurs just fine but c’mon. These guys are filthy rich and successful and E&Y gives them trophies? Is this sort of commercial circle jerk really necessary? Regardless of our personal feelings, the awards are a big deal – Jay Leno hosted this year’s event for crissakes – and the Google News feed for E&Y is constantly clogged with stories about people advancing to the next round of voting like some sort of capitalist March Madness.

Anyway, Casa de Turley officially announced this year’s winners over the weekend and Reid Hoffman and Jeff Weiner, founders of Facebook for Suits LinkedIn, are your entrepreneuriest entrepreneurs.


In addition to the dynamic duo there are quite a few guys you’ve never heard of that are doing well for themselves including Roger Linquist and Jose R. Mas. See? Never heard of them, have you?

There are also some winners that you have heard of including Andrew Mason, one of the co-founders of virtual clipfest and increasingly looking insolvent Groupon. As well as Patrick Byrne, the founder of Overstock.com. You know, the guy on the Segway. The guy who Sam Antar can’t help to poke and prod every chance he gets. The guy whose company is being sued by seven California counties thanks to a Walmart sticker. The guy who may have had some weirdo trolling a bunch of bloggers’ Facebook friends. Yes, that Patrick Byrne.

But HEY! not every entrepreneur can be squeaky clean. It’s not like he’s Pete Rose or anything. Unless you count this.

[via E&Y]

Hiring Watch ’11/’12: Ernst & Young Chicago Taking Applications

They’re looking to fill 500 JITs with new Black and Yellows by June of next year.

Chicago Mayor Rahm Emanuel announced the jobs on Tuesday, saying the firm will start hiring immediately and hopes to have all the positions filled by June. Ernst and Young currently employs about 2,000 people in Chicago. The hires will be diverse across experience levels and include support workers.

Just remember that E&Y seems to be upgrading the gene pool, so uglies need not apply.

Ernst & Young to add 500 jobs in Chicago [CT]

The Fall Busy Season Has One Ernst & Young Team in Danger of Going into Diabetic Shock

By way of the Ernst & Young Staff Twitter account, we learn that the young associates are quite fond of the snack drawer:

While I’m not one to condone such unhealthy life choices, I am not lost on the fact that these drawers of death are not uncommon. That said, if all of you out there in E&Y land insist on this type of sustenance, I suggest you get a pair and put down the whole drawer in a prescribed amount of time. The bankers and hedgies have been doing this for years and since many of you think yourselves worthy of their ilk, you should be able to hold your own in the mass consumption of factory produced crap. Anyone up for the challenge should provide a full inventory of the items to be consumed as well as the time limit and the prize to the winner should they emerge victorious. Additionally, I would need to be given a play by play in order to appropriately report the progress and results to the world at large.

We’re waiting. The gauntlet has been thrown.