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'Accounting games have been played'

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US investment bank Lehman Brothers disguised its true financial position, failing to disclose its insolvency before later filing for bankruptcy, according to a report by a US court examiner.

The report also criticises the investment bank's auditor Ernst and Young for failing to question and challenge improper or inadequate disclosures, which the firm denies.

Prem Sikka, professor of accounting at the University of Essex, analyses external auditor's role in the workings of investment banks.

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