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Posted 8.15.13

Gary Previts, Arnold Hirshon and Jill Tatem with Ernst & Young Founders' ArchiveAlthough Arthur Young, a Scottish-born resident of Chicago, and Alwyn C. Ernst, a native Clevelander, never met, the companies they founded at the start of the 20th century became forever linked in 1989 when they merged to form Ernst & Young, today one of the “Big Four” accountancy firms.

In June 2013, the Cleveland branch of Ernst & Young (which for decades anchored the Huntington Building on the corner of East Ninth Street and Euclid Avenue downtown) completed its move into the brand-new E&Y Tower on the Flats East Bank of the Cuyahoga River. As so often happens, preparations for the move a few years back turned up several all-but-forgotten items.

One of them is an accounting ledger dating from 1906 that belonged to none other than Arthur Young.

Donning white gloves to handle the fragile book, Distinguished University Professor Gary Previts, PhD, joked, “What could top that but the ledger of A.C. Ernst?”

Sure enough, Ernst’s ledger had turned up, too.

Henry “Hank” Kohout, associate director of communications and marketing for the Americas division of Ernst & Young, contacted Previts and offered to give the company’s historically significant archives, including the founders’ ledgers, to CWRU. The university’s connection to Ernst & Young extends to the new global chairman and CEO, Mark Weinberger, JD/MBA ’87. Previts put Kohout in touch with Arnold Hirshon, associate provost and university librarian at Kelvin Smith Library, who gratefully accepted the important gift. The materials will be placed in the university’s Special Collections.

Previts, who is Weatherhead’s E. Mandell de Windt Professor of Leadership and Enterprise Development, recently met with Hirshon and Jill Tatem, university archivist at CWRU, to transfer the documents.

“It doesn’t get any more original than this unless we had A.C. Ernst standing here,” he said, turning the yellowed pages of Ernst’s ledger.

The ledgers will help students and historians “get a sense of the business that both began, and what their customer base and scope of services were like,” says Previts. Other archival materials, including internal legal documents never before publicly available, may also help shed light on the origins of the two firms and on key episodes in their early history.

One such episode relates to the passage of the U.S. Securities Acts of 1933 and 1934 and the subsequent mandate for audits of publicly traded companies.

“There was a very different system before that time,” says Previts. 

Tatem adds, “In the university archives we have information on how accounting was taught. This provides information on how it was practiced. So who led? Teachers or practitioners? This will provide an interesting [chance to] compare and contrast.”

Previts is himself a renowned historian of accountancy whose accomplishments include editing a major series of books exploring how accountancy developed around the world. He also collaborated with Dale Flesher, currently a member of the board of directors of the American Accounting Association, on a manuscript history of Deloitte (another of the Big Four accountancy firms). So far, however, no one has written a comprehensive history of Ernst & Young. The Ernst & Young Founders’ Archive, as the collection will be known, may make that possible.

“Jill and Arnold moved with lightning speed on the agreement” to establish the archive, Previts said. “What a great feeling to get this in the right hands.”

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