AIG Shares Fall as Insurer Reports Internal Audit Weakness
Giant international insurer American International Group Inc. saw its shares fall 11 percent today on its acknowledgement that it may have incorrectly valued the effect of the ongoing credit crisis in previous reporting.
In a Feb. 11 filing with the Securities and Exchange Commission, AIG said it has been advised by its auditors, PricewaterhouseCoopers LLC, that it had a "material weakness in its internal control over financial reporting and oversight relating to the fair value valuation of the AIG Financial Products super senior credit default swap portfolio."
The insurer said it concluded that it should "clarify and expand its prior disclosures" relating to the portfolio.
AIG said it is still working to determine the amount of the increase in the cumulative decline in fair value of AIGFP's super senior credit default swap portfolio to be included in its Dec. 31, 2007 financial statements.
AIG said that its assessment of its internal controls relating to the fair value valuation of the credit default swap portfolio is ongoing, but it believes that it currently has in place the necessary procedures to "appropriately determine the fair value of AIGFP's super senior credit default swap portfolio for purposes of AIG's year-end financial statements."
Source: AIG
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