Smoke, fire?Shares in AOL Time Warner plummeted 15 per cent yesterday as investors took stock of the latest developments in the growing accounting scandal at the world's largest media company. The falls occurred despite assurances on Wednesday from CEO Dick Parsons that AOL had double checked all the deals that had been questioned by a string of articles in the Washington Post with its external auditor. AOL shares closed at $9.64, down 15.4 per cent on the day, after dropping as much as 23 per cent during trading. The firm's shares are now at their lowest level for four years - up until now they had been more resilient than most to the high-tech and media industry recession. Shares were hit additionally after financial analysts, including Salomon Smith Barney, downgraded the stock. Parsons admitted during a conference call on Wednesday that AOL was the subject of a "fact-finding inquiry" from the Securities and Exchange Commission (SEC). While Parsons insisted AOL had done nothing improper, fears were raised when he conceded that "we are living through a time when merely complying with GAAP [Generally Accepted Accounting Principles] may not be enough". However, he assured investors that AOL Time Warner was going out of its way to help the SEC, and was encouraging investor transparency by giving out corporate information "way beyond legal requirements". The Washington Post reports that one of the firms being investigated in relation to suspect AOL deals is a British betting company called Wembley plc. AOL booked a £14.4m legal settlement with the company as advertising revenue according to the report.