SAVINGS AND LOANS: Audit at Your Peril

SAVINGS AND LOANS: Audit at Your Peril

It was another nail-biting week for the number crunchers at Ernst & Young. America's biggest accounting firm tentatively agreed to pay some $40 million to the Federal Government for faulty work done by a predecessor firm, Arthur Young & Co., on behalf of Charles Keating's failed Lincoln Savings. The settlement could be a bargain: it should keep Ernst from being named in a $2 billion government fraud-and-racketeering suit stemming from Lincoln's collapse.

But the accounting firm barely has time to celebrate. The SEC is investigating whether 36 Young partners improperly borrowed money from Republicbank of Dallas. Some of them had audited...

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