After years of rapid growth and stock appreciation, New Century Financial Corporation, one of the largest mortgage originators in the U.S., reported accounting problems at the beginning of 2007. As a result of the liquidity crisis forced the company to file for Chapter 11 bankruptcy. On Bankruptcy Examiner assigned to investigate the new century, the company's problems "were the early translator for the mortgage crisis" that fueled the financial crisis in the U.S. and abroad. This study examines the business model of the new century and accounting practices, and focuses on the role of management, the audit committee and external auditors in the problems of the new century based on the findings of the Bankruptcy Examiner. "Hide
by Krishna G. Palepu, Suraj Srinivasan, Aldo Sesia Source: Harvard Business School 28 pages. Publication Date: October 14, 2008. Prod. #: 109034-PDF-ENG
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