The US Justice Department is investigating accounting practices at AOL Time Warner, according to a report in a US newspaper.
Federal prosecutors in Virginia, where the company's America Online unit is headquartered, were working in tandem with the US Securities and Exchange Commission, according to USA Today, which cited a source with knowledge of the probe.
The SEC opened a fact-finding inquiry into AOL's accounting practices after a recent Washington Postarticle raised the possibility that AOL may have inflated revenues in 2000 and 2001. AOL Time Warner disclosed the SEC inquiry last week.
USA Todayreported that an AOL spokesman would not say whether the company was aware of the new probe, but did say it was "not under any subpoena from the Justice Department".
"If the Justice Department wants to look at the facts, of course we will co-operate with them too, as we would with any other appropriate government agency," AOL said in a written statement given to the newspaper.
"Our accounting is appropriate and in accordance with generally accepted accounting principles and our auditors, Ernst & Young, have repeatedly confirmed that," the statement said.
Spokesmen for AOL and the Justice Department were not immediately available for comment