American International Group (AIG) has acknowledged accounting errors that could stretch back 14 years.
These include its treatment of a deal with Berkshire Hathaway that is at the centre of US federal and state investigations.
AIG's sweeping disclosures - including the possibility it may be forced to reduce the book value of the company by $1.7 billion or 2 per cent - were part of an effort to regain investor confidence.
They came just days after chairman Maurice "Hank" Greenberg said he would retire after almost 40 years of leading the insurance powerhouse.
AIG, which has lost more than $40 billion in stock market value since mid-February, saw its shares sink 1.8 per cent to $57.16 in heavy trade on the New York Stock Exchange yesterday.
Standard & Poor's cut AIG's "AAA" debt rating, potentially making it more costly for the insurer to borrow money.
AIG's disclosures follow a meeting earlier this week between its attorneys and representatives from the US Justice Department, the US Securities and Exchange Commission and New York Attorney General Eliot Spitzer's office.
The company now plans to delay filing its 2004 annual financial report - its second delay - until late April while it continues the review.