According to James R. Doty, PCAOB Chairman's Commentary (Washington, 2012) on the case of E&Y and its partners "These audit partners and Ernst & Young - the external auditor of the company for more than twenty years - have failed to fulfill their fundamental responsibility,” said James R. Doty, Chairman of the PCAOB (Washington, 2012). receive reliable information, which was not the case in this case” (Washington, 2012). In the audits of Medicis' financial statements as of December 31, 2005, 2006, and 2007 as part of the 2008 Medicis E&Y Audit Inspection (Washington 2012), staff of the PCAOB's Registration and Inspection Division found that E&Y had accepted the business. The accounting for its reserve of sales returns is questionable. E& Y indicated that Medicis' reporting of its sales returns did not comply with U.S. generally accepted accounting principles, that the sales returns reserve was not measured accordingly, instead of being measured at gross selling price, returns were at replacement cost (Washington 2012 ). The Board also found that E&Y accepted the company's replacement cost reserve without supporting evidence (Washington