US can inspect Ernst & Young

US regulators have struck a deal that allows them to continue inspecting UK accounting firms including Ernst & Young, which is currently under fire for its role in the collapse of Lehman Brothers in 2008. The US accounting watchdog has agreed with the UK’s Professional Oversight Board that it can examine UK firms that audit US-traded companies, getting round an EU ruling in 2008 that prevented such US scrutiny. The US opened up its accounting firms in the recent Dodd-Frank Act, which overhauls parts of its financial system, and is negotiating agreements with several other countries. Last month the New York attorney general brought a civil action against Ernst & Young for allegedly failing to flag up failures at Lehman Brothers ahead of its collapse.