Irvine, California-based New Century Financial Corp. says a probe of its financial statements recently uncovered errors that were probably made in the lender’s 2005 financial statements.

In a filing with the Securities and Exchange Commission, New Century said the 2005 reporting errors were related to the company’s accounting and reporting on loan repurchases. The errors were revealed after an independent investigation into the company’s 2006 earnings initiated further questions about internal controls for the year prior.
“Based upon the work performed by the Investigative Team, the Audit Committee, and management believe that it is more likely than not that these errors in the aggregate resulted in material overstatement of pretax earnings in the 2005 Financial statements,” New Century said in a SEC filing. “Accordingly, on May 23, 2007, the company’s Board of Directors concluded, based upon the recommendation of the Audit Committee, that the 2005 Financial Statements should no longer be relied upon.”