updated 5/10/2005 9:25:19 AM ET 2005-05-10T13:25:19

Those involved in American International Group Inc. accounting probes believe knowledge of and participation in questionable adjustments extend beyond two of the insurance giant’s former senior executives, the Wall Street Journal reported on Tuesday.

The world’s largest insurer by market value is under investigation by the U.S. Securities and Exchange Commission, the New York state attorney general’s office and the state insurance department.

AIG has sought to distance current management from the growing accounting scandal. But authorities believe the extensive nature of the problems may make it less likely that a tiny number of departed executives were solely responsible, the report said, citing people familiar with the probes.

AIG last week admitted to misleading accounting and said it would restate more than four years of financial reports, slashing $2.7 billion from its net worth.

In its extensive memo on its internal findings, AIG said reserve adjustments, which had the effect of increasing reported earnings, “appear to have been made at the direction of certain former members of senior management without appropriate support.”

Published reports since then have pointed to ousted Chief Executive Maurice “Hank” Greenberg and former Chief Financial Officer Howard Smith as being among the unnamed members of senior management cited in the AIG memo.

Lawyers for both former executives have said the improper accounting was not solely the responsibility of former management but included current senior management, directors and auditors. The newspaper’s report appears to confirm that.

AIG spokesman Chris Winans told the Journal: “Nothing has changed since our last press release, which refers to these top-level adjustments being taken at the behest of certain former members of senior management.

“If we become aware of a significant change, we will fulfill our obligation to disclose it,” Winans said.

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