Federal investigators looking into possible accounting violations at Freddie Mac ( FRE) are raising questions about whether the company improperly delayed the recognition of billions of dollars of losses, the Wall Street Journal reports, citing people familiar with the matter. The Journal says a confidential report in February 2008 by investigative firm Kroll concluded that "inappropriate application" of accounting rules "enabled Freddie to defer billions of dollars of losses incurred from 2001 through 2004" on derivative contracts whose value depends on fluctuations in interest rates. The losses, currently about $3.7 billion, are due to be gradually recognized in quarterly earnings statements over the next several years, the Journal notes. Investigators from the FBI obtained a copy of that report, which was never publicly released, and recently sought more information on the issue, the Journal reports. The accounting practices at Freddie Mac, the government-backed mortgage company, and its rival Fannie Mae ( FNM) have been the focus of investigations by the Justice Department and the Securities and Exchange Commission for at least six months. The firms have disclosed the investigations but haven't provided details on the questions being raised. A spokeswoman for Freddie told the Journal: "We are confident that our accounting treatment was appropriate and consistent with all applicable accounting guidance."