Jim Turley's balancing act

Interview by Geoff Colvin, senior editor at large

Accounting -- exciting? After a global financial crisis that hinged on the misvaluation of assets, it's a lot more interesting than it used to be, and even more interesting if you're running one of the Big Four accounting firms. Talk about juggling constituencies: Ernst & Young CEO James Turley must respond to newly skittish clients, to recession victims who think accountants failed at their job, and to regulators worldwide who are certain that accounting rules must be changed -- they're just not sure how.

Turley, 55, who grew up in St. Louis and has both bachelor's and master's degrees in accounting from Rice University, is an E&Y lifer. He has run the partnership since 2001, when Enron's collapse began a wave of accounting scandals that reshaped the industry. After Arthur Andersen failed in 2002, many of its offices around the world joined E&Y intact, expanding the firm significantly. Today E&Y has about 144,000 employees in 140 countries; though Turley has homes in London and suburban New York, he spends 75% of his nights elsewhere. He talked recently with Fortune's Geoff Colvin about being the CEO of Lehman Brothers' auditing firm, why America's tax policy is globally uncompetitive, and much else.

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