New York ? AOL Time Warner Inc. said Wednesday that the Justice Department is looking into its accounting practices, raising the possibility of a criminal case against the world’s largest media company.

AOL Time Warner did not detail the Justice Department probe and agency officials declined comment. Securities regulators are already investigating the company’s bookkeeping.

The inquiry comes amid a backdrop of deepening mistrust of corporate accounting as scandal after scandal has shaken investors’ confidence. President Bush, whose own actions as a corporate executive have been questioned, signed a bill cracking down on corporate fraud into law Tuesday but was immediately criticized for interpreting the law in a way that appeared to weaken it.

Justice Department involvement in the AOL Time Warner probe raises the possibility that the investigation could move beyond a civil securities case and into a criminal proceeding, which would be far more serious for company.

“In the current environment, when anyone raises a question about accounting, it’s not surprising that the relevant government agencies will want to look into the facts,” the company said in the statement.

Even if AOL Time Warner isn’t charged, the mere fact that its accounting is being scrutinized is hurting its already battered stock. AOL Time Warner’s shares fell sharply last week after it disclosed that the Securities and Exchange Commission was investigating how it accounted for several transactions at its America Online unit.

AOL Time Warner stock, which is down sharply this year, on Wednesday closed at $11.50, down from $12.40.

The accounting probes come at an especially difficult time for AOL Time Warner.

The company, created in a blockbuster merger announced in early 2000, ousted its No. 2 executive Robert Pittman last month and badly needs to restore its reputation with investors.

Pittman, chief of America Online before the merger, announced his resignation on the same day that the Washington Post began publishing a series of articles detailing what the newspaper called “unconventional” ways of increasing revenues at AOL.