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More accounting problems seen at AIG

American International Group Inc., the insurer under scrutiny for possibly using transactions to artificially improve its financial condition, has uncovered at least $1 billion more in accounting problems, The New York Times reported on Tuesday.
/ Source: Reuters

American International Group Inc., the insurer under scrutiny for possibly using transactions to artificially improve its financial condition, has uncovered at least $1 billion more in accounting problems, The New York Times reported on Tuesday.

The insurer said late last month that its accounting for a number of transactions was improper, estimating at the time that its net worth would have to be lowered by $1.7 billion, or about 2 percent.

The impact could be greater, The New York Times reported, citing people briefed on an investigation ordered by the insurer into its accounting.

The report on the investigation, carried out by a law firm, also raises serious questions about the integrity of AIG’s financial-reporting systems, The Wall Street Journal reported.

The report indicates that recently retired Chief Executive Maurice Greenberg and dismissed Chief Financial Officer Howard Smith oversaw critical aspects of the company without certain financial and accounting controls in place to oversee their work, the Journal said, citing people with knowledge of the report.

AIG declined to comment.