-         AIG said that they have decided to restate financials from several previous years and that preliminary results of its internal audit show its 2004 results should be reduced by $2.7 billion, or 3.3 percent of its shareholders’ equity of $82.87 billion.

-         AIG also said that the internal review determined that AIG’s accounting for certain derivatives under the Financial Accounting Standards Board’s Statement of Financial Accounting Standards No. 133 — Accounting for Derivatives and Hedging Activities was incorrect and needs to be adjusted.

+ The company has carefully studied the use of finite reinsurance to polish financial results. Inaddition, the company also admitted the lack of risk transfer transactions and that may become mispresentation. According to AIG, the restatement will correct errors in accounting for transactions which may relate to documentation that did not accurately reflect the nature of the arrangements. In certain cases, the transactions may also be related to false for managing members, regulators and independent auditors of AIG, according to AIG’s statement.

+ AIG expects to receive unqualified audit opnion from PwC which related to the consolidated financial statements and the internal control assessment. However, AIG management has identified control deficiencies, including the ability of certain former members of senior management to circumvent internal controls in financial reporting in some cases, ineffective control in accounting for certain structured transactions and transactions involving complex accounting standards and ineffective balance sheet reconciliation process.

-         In the early 2000s, AIG was renowned for poor ethics and lack of internal controls. Company accused of reinsurance transactions with a number of companies, which was created and designed to inflate loss reserves up to $ 500 million. The aim is to deceive investors and the public.

-          Fines and investigation on AIG pile up until 2007 when authorities discovered the company of sinners and in many states for skewed data and federal responsible for fraudulent accounting practices. This occurs when replacing Martin Sullivan then CEO Hank Greenberg. Greenberg has finally been released by the company in a trial for a previous accounting scandal that led to the $ 1.8 billion fine for AIG.

-         Sullivan realized that AIG was in serious trouble and continued to make risky investermennt  in order to rise short-term growth. The company promised to buyers of swaps if the debt securities defaulted, the company will pay the losses. The company also added that if the price of the securities collapsed, AIG will reacpuire them again. The majority of the securities referred to the CDO, securities backed by such mortgage bonds.

-         A close look at AIG's risk-management operations, demonstrates that the firm should have been aware of these risks. The firm's executives had been using a computer model to gauge risk that had been designed by Yale professor Gary Gorton. But AIG didn't anticipate how market forces and contract terms not weighed by the models would turn the swaps, over the short term, into huge financial liabilities. AIG didn't assign Mr. Gorton to assess those threats, and knew that his models didn't consider them. Sullivan told investors concerned about exposure to credit-default swaps that models helped give AIG "a very high level of comfort" (Mollenkamp, 2008). Those so-called comfortable risks have cost AIG tens of billions of dollars and pushed the federal government to rescue the company in late 2008 when it announced a loss of $61.7 billion dollars in the fourth quarter of 2008.