U.S. regulators are scrutinizing the books of some top Wall Street brokers and investment banks for subprime-mortgage losses, according to a report in the online version of the Wall Street Journal.

Under review by the U.S. Securities and Exchange Commission is whether the firms are calculating the value of subprime-mortgage assets in a consistent way, as well as customer assets, such as those held for hedge funds, according to the report, which cited people familiar with the inquiry.

The regulatory checks, which are expected to include Wall Street's five biggest investment banks including Goldman Sachs Group

Neither Goldman Sachs nor Merrill Lynch could immediately be reached for comment.

The added scrutiny comes amid some subprime-mortgage cracks surfacing at some large investment firms. Swiss bank UBS AG was forced to shut down Dillon Read Capital Management less than two years after its launch following losses on mortgage markets. And Bear Stearns Cos shares, and its reputation, were slammed as two of its mortgage funds suffered losses, outflows and then filed for bankruptcy.

Both analysts and investors have raised questions over whether there are unreported subprime-mortgage and collateralized-debt obligation losses lurking on firms' books. Added scrutiny may also help pinpoint whether hedge funds have accurately reported their results to investors, the Journal said, citing one person knowledgeable with the inquiry.

Regulatory cross-checks of how firms calculate subprime-mortgage assets could boost the accuracy of reports to investors, according to the report.

Marking subprime assets to market is troublesome since they aren't easily bought or sold, making it tricky to put an accurate price on them, the Journal reported.

Ann Rutledge, a principal with R&R Consulting, a structured finance consultancy in New York, told the Journal: No one really knows how to price asset-backed securities and CDOs and that's a real problem in the market now.

In late June, the SEC said it was probing about a dozen CDOs, which are secured by mortgage bonds and other forms of debt.

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