AOL: three more deals under scrutiny

By Jim Hu and Margaret Kane

AOL Time Warner has identified three previous deals conducted in its America Online unit that may have been accounted for improperly in its financial statements.

The three unnamed transactions, totalling $49m over six quarters, may have been inappropriately accounted as advertising and commerce revenue. The company said it plans to further review these deals among others at its internet division, but added that it has not determined whether the accounting was inappropriate or if it will take any action to address any financial improprieties that may be found.

AOL Time Warner chief executive Richard Parsons said in a statement that he plans to "implement additional internal controls at AOL" once the company's own investigation is completed.

Notice of this discovery was released in conjunction with AOL Time Warner's decision to certify its financial statements following the Sarbanes-Oxley Act of 2002. The new federal law requires top executives publicly traded companies to certify the accuracy of their latest financial statements.

For most companies, the deadline to certify financial statements was set for the close of business on Wednesday. A few companies, including Applied Materials, Dell Computer, Hewlett-Packard and Microsoft have deadlines in September to reflect their fiscal years.

As of Wednesday morning, CEOs and CFOs of most tech companies, including Oracle and Siebel Systems, had met their August deadline, according to the SEC.

There are a few stragglers, however. Before the market opened, Comdisco, Compuware, EarthLink, EMC, Level 3 Communications, Nextel Communications, PeopleSoft, Quantum, Qwest Communications, Sabre Holdings, USA Interactive and XO Communications were among the companies that hadn't yet filed to meet Wednesday's deadline.

Under the Sarbanes-Oxley Act, a CEO or CFO who certifies false financial reports could get up to 20 years in prison and be fined $5m.

Jim Hu and Margaret Kane write for News.com