From Enron to Lehman, corporate financial reporting, accounting, and auditing has suffered what can only be called a lost decade in which the industry learned nothing from its own mistakes.
Real Time Economics is featuring excerpts of the report:
"Colorable claims exist that Ernst & Young did not meet professional standards, both in investigating Lee's allegations and in connection with its audit and review of Lehman's financial statements."
--From the report, executive summary, page 21
"[W]e are also dealing with a whistleblower letter, that is on its face pretty ugly and will take us a significant amount of time to get through. I am confident from what I have seen it shouldn't result in any significant issues around financial reporting, but again there is a lot of work to do yet. This combined with some very difficult accounting issues around off balance sheet items is adding stress to everyone." (From a June 8, 2008, email from William Schlich, a former lead partner on Ernst & Young's Lehman team)
--From the report: Volume 3, page 961