KPMG is to Foreclosure Crisis as Arthur Anderson was to Enron

A 581 page report by a court examiner in the New Century bankruptcy matter details the role that KPMG, New Century's accounting firm, had in facilitating the mortgage bubble and delaying its bust. The report is certain to provide a new target for investor lawsuits with far deeper pockets than the defunct mortgage company.

Here is a link to the New York Times story (click). Here is an excerpt:

KPMG contributed to some of these accounting and financial errors "by enabling them to persist and, in some instances, precipitating the company's departures from applicable accounting standards," Missal concluded.

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More than 450 companies and individuals who have filed claims against the Irvine, California-based New Century may be able to sue KPMG for professional negligence based on KPMG's breach of its professional standard of care, Missal wrote.

"In the post-Enron era, one of the lessons should have been that accountants need to be skeptical, strong, and independent," Missal told Reuters in a phone interview. "You didn't have any of those attributes here."