US media and entertainment giant AOL Time Warner yesterday admitted that three previous deals conducted in its America Online unit may have been improperly accounted in its financial statements, overstating advertising revenues by $49 million.

The company’s accounting practices are already being investigated by the US Securities and Exchange Commission and the Department of Justice. AOL Time Warner was also sued recently by a group of shareholders for alleged fraud regarding the advertising revenues at AOL.

AOL Time Warner has not named the companies involved in the transactions in question, but it said that three payments to AOL may have been “improperly recognised” as advertising revenue. It also said that it plans to further investigate deals at its internet division.

The information was disclosed hours before the Securities and Exchange Commission’s deadline for US companies to certify the accuracy of their latest financial statements, as required by a new federal law.

In a separate statement AOL Time Warner announced that David Colburn, an executive vice president and president of business development no longer works for the company. It did not comment on the circumstances of his departure. Mr Colburn had negotiated advertising deals and overseen the AOL division.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.