Inquiry Assails Accounting Firm In Mortgage Lender's Fall

04/03/2008 05:12 am ET | Updated May 25, 2011

A sweeping five-month investigation into the collapse of one of the nation's largest subprime lenders points a finger at a possible new culprit in the mortgage mess: the accountants.

New Century Financial, whose failure just a year ago came at the start of the credit crisis, engaged in "significant improper and imprudent practices" that were condoned and enabled by auditors at the accounting firm KPMG, according to an independent report commissioned by the Justice Department.

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