The mortgage mess and KPMG

We've noted that a damning report by an independent Justice Department had little good to say about KPMG's roles in the meltdown of New Century, which in many ways ignited the mortgage meltdown. But it is important to note that nowhere does the report indicate that KPMG helped manipulate earnings. Nor was was it accused of fraud. So what did it do? One issue, as the New York Times notes, is whether you can really fault the firm for work based on information available at the time. KPMG did flag some issues, like the use of simple spreadsheets to calculate securities holdings and the lack of a policy to calculate reserves. But these were deemed inconsequential. Some executives and directors were growing very uncomfortable. Still, this is another demerit for KPMG, if only from a PR perspective.  

For more:
- here's the New York Times article

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