America Online

(AOL)

might have improperly boosted its revenues from 2000 to 2002 through unconventional accounting methods, according to a report in the

Washington Post

.

In a statement to the Post, AOL maintained that its accounting was "appropriate and in accordance with GAAP standards," and that the revenue in question was a miniscule part of its overall results.

The Post claimed the questionable bookkeeping could have been used to maintain its growth in the face of slowing advertising revenue as its merger with Time Warner loomed.

According to the story, AOL converted legal disputes into ad deals, negotiated a shift in revenue from one division to another to boost online business, sold ads on behalf of

eBay

(EBAY) - Get Report

and booked the sale as AOL revenue, booked stock rights as advertising revenue, and bartered ads for computer equipment with

Sun Microsystems

(SUNW) - Get Report

.

The report said that Robert O'Connor, former vice president of finance for AOL's advertising segment, warned AOL executives of the questionable nature of the bookings. "Clearly, a lot of what they were living on was revenue that was not of the highest quality," O'Connor told the Post.

In its response to the paper, AOL argued that it has "maintained a strict and effective system of controls" that has been confirmed in writing by Ernst & Young, the company's independent auditor. AOL also claims the revenue in question is "truly microscopic," totaling less than 2% of the company's overall revenue, and "therefore immaterial to the company's business."

Shares of AOL were falling about 9% on the news to $12 in early trading.