UK probes E&Y on Lehman audit

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As the FT notes:

A British investigation has been launched into whether Ernst & Young properly audited Lehman Brothers’ accounts in the months preceding the US investment bank’s collapse in September 2008, reports the FT. The Accountancy and Actuarial Disciplinary Board has launched a probe into E&Y’s accounting treatment of controversial transactions known as “Repo 105s” and “Repo 108s”, which Lehman regularly used in its quarter-end balance sheets.

It’s inevitable the Big 4 will become 3 one day.

And that at that point the whole edifice of auditing – with its current ludicrous state of claimed independence – will collapse with it.

The odds must be on E & Y being the one to create the tipping point now. How many more audit fiascos can it be involved in?