The company made the disclosure in a filing with securities regulators, saying it learned of the investigation in August. IBM said in the filing that it is cooperating with the probe, which is focused on the way the commercial technology giant reported revenue for certain transactions.
IBM declined to provide further details, but issued a statement that said it "has a rigorous and disciplined process for the preparation of its financial statements and the reporting of revenue."
Shares in the Armonk, New York, company were down almost 4 percent in trading after the disclosure.
IBM has been struggling with an extended sales decline in some of its core business segments. CEO Virginia Rometty is attempting to shift the company's focus to newer areas such as cloud computing, data analytics and cyber-security.
International Business Machines Corp. announced separately Tuesday that it will increase its share buyback program by $4 billion (roughly Rs. 26,032 crores).
There was about $2.4 billion (roughly Rs. 15,619 crores) remaining from a prior authorization as of the end of September.
When companies buy back shares, the value of the remaining shares on the market increases. Each remaining share represents a larger slice of the company's profits.
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