BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Thursday, 15 August, 2002, 06:39 GMT 07:39 UK
America Online finds audit problem
AOL's different business interests
AOL Time Warner, the giant US media and entertainment firm, has said it may have overstated the revenues of its America Online internet business by $49m (32m).

The group's accounting practices are already being investigated by the US stock market regulator and the US Justice Department.

In a filing to the stock market regulator, AOL Time Warner said it may have "improperly recognised" three payments to America Online as advertising revenue.

Separately, the firm said David Colburn, a senior executive who negotiated advertising deals for AOL, no longer works there.

Top executive leaves

The company has refused to comment on the circumstances of Mr Colburn's departure, saying only that he left last week. He was an executive vice president and head of business development.

Nonetheless, the firm's shares ended the day higher on Wednesday as it joined the list of companies whose chief executives met the regulators' deadline to sign a pledge that their accounts were in order.

AOL Time Warner said the suspect transactions had come to light in the past 10 days as a result of a company investigation.

The three transactions were spread over a year and a half, between October 2000 and 31 March this year.

The group's chief executive, Richard Parsons, said he hoped the company's internal inquiry would be completed by the end of September.

Better than feared?

Meanwhile, he said, "we are moving forward to implement additional internal controls at AOL".

The SEC inquiry focuses on allegations that the company inflated America Online's advertising sales by as much as $270m over the last two years.

Some observers thought the media giant's statement might lower the pressure on it over its accounting practices.

"Now that the numbers have been disclosed and they're not that big, it could actually be reassuring because there's been such a witch hunt on this issue," said Ajay Mehra, fund manager at Columbia Management Group.

AOL Time Warner is also being sued by a group of shareholders, who have accused the media giant of fraud, alleging it had sought to hide a fall in advertising revenues at America Online.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Duncan Bartlett
"Not a major mistake but we are still talking about $49m."

Politics of regulation

Worldcom goes bust

Enron fall-out

Andersen laid low

FORUM
See also:

15 Aug 02 | Business
14 Aug 02 | Business
15 Aug 02 | Business
11 Aug 02 | Business
06 Aug 02 | Business
31 Jul 02 | Business
30 Jul 02 | Business
24 Jul 02 | Business
18 Jul 02 | Business
19 Jul 02 | Business
11 Jul 02 | Business
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes