The Public Company Accounting Oversight Board found problems with four audits conducted by Ernst & Young in its latest inspection report.
With one client, an unidentified company that originates, acquires and sells mortgage loans, the PCAOB noted that during the year under audit, the company had repurchased 600 percent more whole pool mortgage loans than in the previous year. But the PCAOB said Ernst & Young failed to perform substantive procedures to test whether the repurchases of whole pool mortgage loans had been made in accordance with the terms of the related mortgage loan sales agreements, in order to determine whether the accounting treatment was appropriate.
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