AOL said that the investigation has come following articles in The Washington Post last week, which suggested that America Online might have inflated revenues during the past two years.
The SEC inquiry comes on the heels of the last week's departure of Bob Pittman, the CEO of the company's troubled AOL internet division, in a reshuffle that saw former old-media Time Warner executives strengthen their grip on the company.
The company has been the subject of intense speculation as the collapse in the advertising market has hit it hard, particularly its advertising-reliant internet division. Since the merger, in which AOL leveraged its dotcom boom wealth to acquire Time Warner, the company has seen its share price fall by 75%.
In a conference call, CEO Richard Parsons defended the company's accounting practices saying AOL was informed by the SEC of the inquiry after the articles were published. The SEC has so far declined to comment on the inquiry.
In the conference call, chief financial officer Wayne Pace, said: "We are comfortable with the accounting practices and policies in place at our company. Our accounting is appropriate for the businesses in which we operate."
There is concern that AOL's results, despite beating analysts' estimates could force Wall Street down after it bounced back yesterday.
While the results are positive, there is still concern that promised benefits of the merger, which created the world's largest media company bringing together new and old media, have failed to materialise. It is this that has helped to drive break-up speculation.
The news pushed AOL shares down 6% last night to $10.55. AOL reported a second-quarter net profit of $394m (£250m), compared with a net loss of $734m last time.
Revenue rose 10% to $10.6bn in the quarter and the results included a $1.7bn charge related to goodwill and amortisation. Analysts had been predicting that AOL would post revenues of around $10.02bn.
The results were driven by the powerhouse of its old-media assets with strong performances from its cable TV operations and Warner Brothers studios. The film unit was helped by the US release of 'Harry Potter and the Sorcerer's Stone' on video.
The online unit failed to meet expectations and is a major concern for analysts watching the firm. It had been hoped that it would attract as many as 1m new subscribers, but the service only managed to attract 492,000 new subscribers in the quarter. The online unit also saw ad revenue fall by 42% in the quarter as the unit's earnings before tax, depreciation and amortisation, and revenue fell.
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