As the Teachers Insurance and Annuity Association of America and the College Retirement Equities Fund deals with the backlash over the conflict of interest that led to the resignation of two of its trustees, the controversy could cost Big Four firm Ernst & Young its gig as TIAA-CREF's auditor.

The fallout stems from a conflict revealed last week that led to the resignations of Professor Stephen A. Ross, a trustee of the College Retirement Equities Fund, and William H. Waltrip, a trustee of the Teachers Insurance and Annuity Association of America. In announcing the resignations, TIAA-CREF said that it would "immediately begin to develop a request for proposals from accounting firms that have the requisite capacity and expertise to perform audit services of TIAA-CREF for their respective 2005 audits," and that it has also taken steps to ensure that their respective trustees will identify promptly any business relationships that may bring the independence of the outside auditors into question.

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