Israeli spyware firm NSO Group was given a $2.3bn (£1.9bn) valuation by EY just months before requiring a $10m emergency bailout.
The hefty valuation was given without the accounting giant visiting the company or verifying information given to the analysts, the Financial Times reported.
It is understood that in the 132-page report EY called NSO a “market leader”, despite revenues falling 17 per cent in 2020. It received an emergency loan in October last year.
The EY report not only stood in contrast to the the Berkeley Research Group’ position, which previously called the company “valueless” to private equiry backers, but it also came as the firm came under fire for using its Pegasus software against activists and journalists.
The fallout from Pegasus sparked the surveillance company to be banned by Joe Biden’s administration.
Meanwhile, the Big Four titan EY is currently facing a multi-billion dollar lawsuit over its audits of Abu Dhabi healthcare provider NMC Health and German payments processor Wirecard.
EY declined to comment.