California Board Of Accountancy

State regulators have begun investigating major accounting firm KPMG Peat Marwick LLP, the target of a $3-billion lawsuit by bankrupt Orange County, sources said Tuesday. Last month, Orange County filed a 78-page lawsuit against KPMG, alleging that one of the nation's largest accounting firms failed to warn county leaders about the risks in its ill-fated investment pool. KPMG, which performed annual audits for the county from 1992 to 1994, denies any wrongdoing.

In 1994, California regulators began investigating the accounting firm that had audited Orange County as it slid into the largest municipal bankruptcy in U.S. history. It took eight years and $9 million for the state Board of Accountancy to discipline KPMG. The board has an annual budget of $10 million and 56 employees; the accounting giant earned $12 billion last year and employs nearly 90,000 people.

Federal thrift regulators first notified the Securities and Exchange Commission in late 1986 that they thought something was fishy with the financial statements of American Continental Corp., the parent of Lincoln Savings & Loan. The regulators told the SEC they uncovered evidence during an audit of the Irvine-based thrift that American Continental was selling securities based on "false and misleading" financial information.

State regulators have begun investigating major accounting firm KPMG Peat Marwick LLP, the target of a $3-billion lawsuit by bankrupt Orange County, sources said Tuesday. Last month, Orange County filed a 78-page lawsuit against KPMG, alleging that one of the nation's largest accounting firms failed to warn county leaders about the risks in its ill-fated investment pool. KPMG, which performed annual audits for the county from 1992 to 1994, denies any wrongdoing.

The Ernst & Young accounting firm will pay the state $1.5 million to settle charges that it was grossly negligent in 1987 audits of Lincoln Savings & Loan in Irvine and its parent firm. The settlement with the state Board of Accountancy also bars one of the accounting firm's Los Angeles partners from performing audits for a year as part of a three-year probation. In the settlement, Ernst & Young admitted no wrongdoing.

The state Board of Accountancy is seeking to revoke or suspend the California license of Ernst & Young, one of the nation's largest accounting firms, for alleged "gross negligence" in audits of Lincoln Savings & Loan in Irvine and its parent company. The administrative action, brought by the board's staff, charges that Ernst & Young failed to follow proper accounting procedures in audits of the 1987 financial statements of Lincoln and its parent firm, American Continental Corp. in Phoenix.

The move by California officials to seek a revocation of the accounting license of Ernst & Young may further tarnish the firm's reputation but is unlikely to result in major damage to the firm's operations in the long run, industry officials said Wednesday.

In 1994, California regulators began investigating the accounting firm that had audited Orange County as it slid into the largest municipal bankruptcy in U.S. history. It took eight years and $9 million for the state Board of Accountancy to discipline KPMG. The board has an annual budget of $10 million and 56 employees; the accounting giant earned $12 billion last year and employs nearly 90,000 people.

Sam Yellen has been elected president of the California State Board of Accountancy. He is partner-in-charge of professional practice for Peat Marwick's Los Angeles office and also is a member of the firm's board of directors.

* Holiday season sales are expected to increase 4.5% this year, less than their 5.1% gain in 2003, as higher energy costs, rising interest rates, anemic wage gains and geopolitical threats continue to curb spending, the National Retail Federation said. * The California Board of Accountancy put Ernst & Young on three years' probation and required it to pay as much as $100,000 in investigation costs stemming from violations of independence rules in audits of PeopleSoft Inc.

The Ernst & Young accounting firm will pay the state $1.5 million to settle charges that it was grossly negligent in 1987 audits of Lincoln Savings & Loan in Irvine and its parent firm. The settlement with the state Board of Accountancy also bars one of the accounting firm's Los Angeles partners from performing audits for a year as part of a three-year probation. In the settlement, Ernst & Young admitted no wrongdoing.

Federal thrift regulators first notified the Securities and Exchange Commission in late 1986 that they thought something was fishy with the financial statements of American Continental Corp., the parent of Lincoln Savings & Loan. The regulators told the SEC they uncovered evidence during an audit of the Irvine-based thrift that American Continental was selling securities based on "false and misleading" financial information.

The move by California officials to seek a revocation of the accounting license of Ernst & Young may further tarnish the firm's reputation but is unlikely to result in major damage to the firm's operations in the long run, industry officials said Wednesday.

The state Board of Accountancy is seeking to revoke or suspend the California license of Ernst & Young, one of the nation's largest accounting firms, for alleged "gross negligence" in audits of Lincoln Savings & Loan in Irvine and its parent company. The administrative action, brought by the board's staff, charges that Ernst & Young failed to follow proper accounting procedures in audits of the 1987 financial statements of Lincoln and its parent firm, American Continental Corp. in Phoenix.

A state panel that oversees and licenses the accounting industry is debating new rules to limit outside consulting and require accounting firms to keep more records of their work. The California Board of Accountancy proposed the rule changes in the wake of Enron Corp.'s record bankruptcy and questions about whether its accountant, Andersen, properly certified its financial statements. The Board of Accountancy licenses more than 62,000 accountants and can investigate and discipline them.

Andersen Disciplined for S&L Flop: Arthur Andersen & Co. was ordered to pay $1.7 million, perform 10,000 hours of community service and train its auditing staff better after settling charges that the giant accounting firm was grossly negligent in its audit of Lincoln Savings & Loan Assn., the California Board of Accountancy said. Lincoln failed in April, 1989, at what federal officials said at the time was a cost to taxpayers of $2.6 billion.