Fannie Mae has filed a lawsuit against former auditor KPMG, accusing the Big Four firm of 17 counts of negligence and breach of contract.
In the suit, the home mortgage giant alleges that KPMG applied more than 30 flawed accounting principles, costing its business more than $2 billion in damages -- including $1 billion in costs to restate earnings. Last week, Fannie Mae announced that it would reduce its earnings by $6.3 billion to correct accounting problems stretching back to 2001. The company’s financial statements are still not up to date.
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