AIG Plans Another Restatement

It will revise earnings from 2002 to 2004.
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American International Group

(AIG) - Get Report

expects to report earnings of about $1.7 billion for the third quarter, and said it will further restate earnings from 2002 to 2004.

The big insurance company expects to report adjusted income of $1.8 billion for the quarter ended Sept. 30, including about $1.6 billion of losses related to Hurricanes Katrina and Rita.

The restatement follows a probe by the company's auditors, PriceWaterhouseCoopers. AIG said it understated its earnings in 2002 through 2004 by about $500 million. Earlier this year, the company restated five years' of results following allegations that its past management, led by former CEO Maurice Greenberg, had cooked its books.

"The most significant errors identified relate to the previously disclosed material weaknesses in internal controls surrounding accounting for derivatives and related assets and liabilities under FAS 133, reconciliation of certain balance sheet accounts and income tax accounting," the company said Wednesday.

"AIG continues to believe its hedging activities have been and remain economically effective, but do not qualify for hedge accounting treatment."