AOL Time Warner confirms accounting probe

The US Department of Justice has begun investigating AOL Time Warner's accounting practices, the company confirmed Wednesday,...

The US Department of Justice has begun investigating AOL Time Warner's accounting practices, the company confirmed Wednesday, joining the US Securities and Exchange Commission (SEC) in its recently announced probe.

The DOJ inquiry comes just one week after AOL Time Warner chief executive officer Richard Parsons revealed that the SEC had initiated a "fact-finding" inquiry into AOL Time Warner's accounting practices.

In a statement released yesterday, AOL Time Warner said that it was co-operating 100% with the SEC and would also co-operate with the DOJ.

"Most importantly, as we have consistently said, our accounting is appropriate and in accordance with Generally Accepted Accounting Principles [GAAP], and our outside auditor, Ernst & Young, has, repeatedly, confirmed that, " the company said.

AOL Time Warner's financial practices have been in question since the Washington Post ran a series of articles earlier this month saying that the Internet and media company shifted revenues from one division to another in an effort to prop up its troubled AOL Internet unit.

The accusations come at a particularly bad time for the company, which is busy trying to shake off a dramatic stock slump and an executive reshuffling. A series of high-profile corporate accounting scandals has put the squeeze on companies to assure their financial transparency. On Tuesday, US president George Bush signed a law that placed greater penalties on companies that cooked the books.

"When anyone raises a question about accounting, it's not surprising that the relevant government agencies will want to look into the facts," AOL Time Warner's statement said.

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