American International Group Chief Financial Officer Steven Bensinger told an analysts' conference call today that he could not rule out further financial restatements this year.
Yesterday AIG filed a third restatement of earnings back to 2000, which followed internal accounting probes after investigators uncovered what they said was fraudulent accounting. The company reported fourth-quarter net down 72.5 percent and profit for full-year 2005 at 6.5 percent.
Mr. Bensinger said only when the company has fully remediated its five listed material weaknesses could there be assurances that there will be no more restatements.
"We did a lot of additional work because of the existence of those material weaknesses," Mr. Bensinger said. "We have had teams of people working on them, but we are not going to declare victory until it is all completed."
According to the 10K report filed yesterday, AIG has remediated accounting weaknesses related to controls over risk transfer evaluations.
Federal and state investigators have charged that past finite reinsurance transactions by the company did not shift risk.
The company report said that those weaknesses allowed the company's then Chief Executive Officer Maurice Greenberg to override certain controls in some financial transactions.
Last year the board ended Mr. Greenberg's decades of tenure after revelations about finite insurance deals. But the company has yet to complete remediation relating to controls over certain balance sheet reconciliations, derivatives and tax accounting, it said.
Mr. Bensinger said the insurer will soon return to hedge accounting regarding derivatives once it has fully tested the platform it had developed to make sure it is fully operational.
"We just can't give you any assurances that there won't be more adjustments. There is still more work to do," he said.
The company's fourth-quarter earnings release reported profits decreased due to a $1.15 billion charge for a settlement with authorities over accounting infractions and $1.82 billion to strengthen reserves.
Bank of America securities analyst Brian Meredith said the company's $444 million in fourth-quarter earnings was roughly what he expected, once the one-time charges were factored out.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.