Fee income of CHF 510.3 million in the 2010/2011 financial year puts Ernst & Young back on course for growth
As of 30 June 2011, the audit and advisory firm Ernst & Young Switzerland had increased its fee income for the 2010/11 financial year by 0.6 percent to CHF 510.3 million. To ensure that it remains on course for growth, Ernst & Young invests about 10 percent of its fee income in education and training for its staff every year. Ernst & Young welcomes global efforts to enhance the importance accorded to financial statement auditing. However, Ernst & Young considers that some of the regulatory proposals tabled by the EU in this context are not conducive to this aim.
ZURICH, 24 NOVEMBER, 2011 – Ernst & Young Switzerland closed the 2010/11 financial year on 30 June 2011 with fee income of CHF 510.3 million (+0.6 percent), putting the firm back on course for growth. “Given that market conditions remain difficult, this achievement should be rated as an exceptional success. And it shows that we are well placed – as regards both strategy and organization – to continue to build on our already strong market position,” says Bruno Chiomento, Chief Executive Officer of Ernst & Young Switzerland.
Fee income of CHF 267.7 million (-2.2 percent) was earned in Audit and Assurance Services. “Thanks to its market share of 40 percent, Ernst & Young continues to occupy first place as auditor of SMI companies. We are also firmly established in the market for midsize companies. Our numerous initiatives in the SME sector play their part here. We were able to hold on to almost all of our existing engagements in the reporting year, and also acquired a number of new ones. We achieved these successful results despite major price pressure and an increase in regulatory requirements,” says Thomas Stenz, Chairman of the Board of Directors of Ernst & Young Switzerland.
Advisory services in demand
Fee income of CHF 155.0 million (-2.6 percent) was earned in Tax and Legal Services. “Thanks to our international network, we can defend our position as competition becomes fiercer, with more and more law firms entering the market. In Switzerland alone, we have about 500 employees to assist our clients. The global Ernst & Young network comprises over 29,000 tax professionals and, in the person of Stephan Kuhn, Switzerland is home to the Tax Leader for the EMEIA Area, which includes Europe, the Middle East, India and Africa,” says Dominik Bürgy, Leader Tax and Legal Services in Switzerland.
Advisory Services and Transaction Advisory Services saw fee income soar by 17.5 percent to CHF 87.5 million. As an integrated unit, the internationally-oriented Financial Services Organization (FSO) played a major part in this strong growth. “One of the key reasons for this development is the increase in regulatory requirements, especially in the cross-border banking business, not to mention new statutory regulations for insurance companies. Thanks to our highly specialized advisors, we are able to offer sustainable solutions to our clients,” Bruno Chiomento notes.
EU regulatory proposals not conducive to the aims
Ernst & Young takes a skeptical view of the EU's new proposals on audit regulation. “All over the world, we actively endeavor to enhance the importance and quality of financial statement auditing. However, some of the EU's proposals – such as mandatory rotation of companies for audit engagements or a total ban on advisory business for audit firms – do not promote this objective. Such moves do nothing to increase the quality or independence of auditing work,” Thomas Stenz points out.
Education is the basis for success
Ernst & Young invests about 10 percent of its fee income in education and training for its employees each year. Commitments to various universities and colleges are a key factor in these initiatives. Since August 2011, Ernst & Young has supported the newly-founded Chair in Family Business at the University of St. Gallen, which engages in research as well as teaching and practical knowledge transfer. “Education is the foundation for successful development, in society as a whole and in the business world. Our resources and our vast practical experience give us the ability to continue advancing this process,” Bruno Chiomento comments.
Ernst & Young Switzerland: Fee income by service line (in CHF millions)
| | 2010/11 | 2009/10 | Change in % |
Audit und Assurance Services | 267.7 | 273.7 | -2.2 |
Tax und Legal Services | 155.0 | 159.1 | -2.6 |
Advisory Services | 87.6 | 74.5 | +17.5 |
| Total | 510.3 | 507.3 | +0.6 |
Ernst & Young Switzerland: Employees (FTEs)
| | 2010/11 | 2009/10 |
| Employees (FTEs) | 1'820 | 1'840 |
Brief portrait of Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 152,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. In Switzerland, Ernst & Young Ltd is a leading audit and advisory company offering services with about 2,000 employees at 10 locations also in the area of tax and legal, as well as in transactions and accounting. For more information about our organization, please visit www.ey.com/ch
Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited (EYG), each of which is a separate legal entity. EYG, a UK company limited by guarantee, does not provide services to clients.
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