Dell has been forced to delay filing its latest quarterly report and to suspend a share buy-back after an expanded probe into its accounts by the Wall Street watchdog.

The world’s largest PC maker said it would be forced to delay its second-quarter figures because of "questions raised" after an informal Securities and Exchange Commission investigation into accounting issues and a subsequent internal probe.

The investigations suggested Dell may have misstated prior financial reports, including issues relating to accruals, reserves and other balance sheet items, Dell said in a statement. These could affect previously reported financial results, it added.

The latest set-back for the group comes only weeks after Dell was forced to recall more than 4 million computer batteries after pictures of one of its laptop machines exploding in flames were posted on the internet.

It also comes after Lenovo, Dell's Chinese rival, announced it would cut prices in China, in an effort to take market share from the American group.

The SEC investigation was launched in August 2005 though Dell only admitted the probe a year later, claiming it was under no obligation to make it public. The company has also received a subpoena from the US Attorney for the Southern District of New York, who requested documents related to the company’s financial reporting dating back four years.

Shares in the troubled computer maker fell more than 4 per cent to $20.75 in trading ahead of the bell in New York. In July the shares plummeted to their lowest level in almost five years as Dell gave warning that second-quarter profits would fall short of Wall Street expectations.

At the height of the dotcom boom in 2000 the shares soared close to $60 but have since slumped amid falling prices and intensifying pressure on profit margins with increasing competition from manufacturers in the far east.

The company has also postponed a meeting with financial analysts planned for Wednesday.

Chairman and company founder Michael Dell said: "We are fully cooperating with the investigations and working to resolve any and all issues raised in connection with those investigations as quickly as possible, and we will take any appropriate remedial or corrective actions to address any problems,".

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